Table of Contents
Issues in the Market
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- Definitions
- Abbreviations
Future Opportunities
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- Trend: Affection
- Trend: Diversity Is All
Market in Brief
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- The market
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- Figure 1: Food retailers’ sales forecast confidence range, 2011-15
- “Retail is detail”
- Tesco dominant
- Formats
- Self scanning – immediately popular
- BOGOFs much more popular than EDLP
- Macro economic outlook poor
- Online growing, but Morrisons standing aloof
- Spending on food has gained share of spending through the recession
- Building on the brand
- A concentrated sector
Internal Market Environment
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- Key points
- Competitive environment
- What do consumers want?
- Store formats
- Primary shopping destinations
- Car ownership
- Secondary shopping destination
- Hard discounters and Iceland
- Online
- Who shops online?
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- Figure 2: Internet users who buy food online, 2003-10
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- Figure 3: Profile of online food shoppers, Dec 2006, Sept 2010
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- Figure 4: UK: Internet access, 2001-10
- Social needs
- Major players
- Market size
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- Figure 5: UK: Food retailers’ Online sales, 2009 and 2010
- Figure 6: Online sales as % all food retailers’ sales, 2006-10 (e)
Broader Market Environment
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- Key points
- The ageing population is bad news.
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- Figure 7: UK: Over 65s as % total UK population, 1991-2020
- Implications for retailers
- The economy
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- Figure 8: UK: Quarterly GDP growth, 1989-2010 (Q2)
- Can the recovery continue?
- Implications for food retailers
Competitive Context
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- Key points
- Food retailers – Key markets
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- Figure 9: UK: Consumer spending on selected major goods categories, 2005-10 (H1)
- Food – the basis for the success of the food retailers
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- Figure 10: Spending on food and drink as % all consumer spending, 2004-10 (H1)
- Inflation
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- Figure 11: Food inflation, 2004-10 (Sept)
- Product mix
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- Figure 12: UK: Food retailers, estimated product mix, 2009
- Eating out
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- Figure 13: Spending on food relative to spending on eating out, 2004-09
Who’s Innovating
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- Asda – chosen by you
- Home delivery – the drive through supermarket
- Green issues – traceability
- Tesco produces grocery shopping app for the iphone
- Vending machines – an idea that won’t go away
- Taking Local to the limit
- Tesco and Clubcard
Strengths and Weaknesses
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- Strengths – Driving growth
- Weaknesses – reducing growth
Sector Size and Forecast
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- Key points
- Uncertainty
- Implications for the food retailers
- How will they respond?
- Forecast
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- Figure 14: Food retailers’ sales, 2005-15
- Figure 15: Food retailers’ sales forecast confidence range, 2011-15
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- Figure 16: Food retailers’ sales forecast, best and worst case data, 2005-15
Channels of Distribution
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- Figure 17: Food, drink and tobacco – estimated channels of distribution, 2009
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Retailer Competitive Analysis
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- Key points
- Leading retailers
- The Market leaders
- Hard discounters and Iceland
- Convenience stores
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- Figure 18: UK: Leading Food Retailers, 2009/10
- Market shares
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- Figure 19: Leading UK food retailers, estimated non-retail share of sales, 2009
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- Figure 20: Leading UK food retailers’ market shares, 2009
Retail Advertising and Promotion
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- Key points
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- Figure 21: Food Retailers advertising spend, 2006-10
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- Figure 22: Advertising expenditure by retailers, Sep 2009-Aug 2010
Brand Elements
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- Key points
- Brand map
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- Figure 23: Attitudes towards and visitation of various food retail stores, August 2010
- Brand qualities of food retail stores
- Tesco leads in key attributes
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- Figure 24: Personalities of various food retail stores, August 2010
- Experience of food retail stores
- Big four most visited
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- Figure 25: Consumer visitation of various food retail stores
- Brand consideration for food retail stores
- M&S least considered
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- Figure 26: Consideration of various food retail stores, August 2010
- Brand satisfaction for food retail stores
- Premium brands most excellent
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- Figure 27: Satisfaction with various food retail stores, August 2010
- Brand commitment to food retail stores
- Tesco dominates in grocery sector
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- Figure 28: Commitment to various food retail stores, August 2010
- Brand intentions for food retail stores
- Tesco takes the lead, budget brands lack loyalty
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- Figure 29: Future visiting intentions for various food retail stores, August 2010
- Brand recommendation for food retail stores
- Big names, low prices support big four
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- Figure 30: Recommendation of various food retail stores, August 2010
- ‘Budget brands’ – Iceland, Aldi, Lidl
- What the consumer thinks
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- Figure 31: Attitudes towards the Aldi, Lidl and Iceland stores, August 2010
- Morrisons and ASDA
- What the consumer thinks
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- Figure 32: Attitudes towards the Morrisons and ASDA stores, August 2010
- Premium and added-value – M&S, Waitrose, The Co-operative
- What the consumer thinks
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- Figure 33: Attitudes towards the Marks & Spencer, Waitrose and The Co-operative stores, August 2010
- The top two – Sainsbury’s and Tesco
- What the consumer thinks
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- Figure 34: Attitudes towards the Sainsbury’s and Tesco stores, August 2010
What Do Consumers Look For in a Supermarket?
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- Key points
- Consumers and the recession
- Bargain hunting
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- Figure 35: Bargain hunters, 2008-10
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- Figure 36: Hard discounters, 2008-10
- What consumers look for in a supermarket
- Mintel survey, May 2010
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- Figure 37: Factors considered for choice of a particular supermarket for main weekly shopping, May 2010
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- Figure 38: Key factors in choosing a supermarket by age and affluence, May 2010
- TGI survey, 2005-09
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- Figure 39: Deciding factors in shopping for food, drink and household products, GB, 2005-09
- A more sophisticated approach
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- Figure 40: Key factors in choosing a supermarket, September 2010
- Who rates what?
- Best value
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- Figure 41: Ranking of best value, September 2010
- Lowest prices
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- Figure 42: Ranking of lowest prices, September 2010
- Product quality
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- Figure 43: Ranking of product quality, September 2010
- Convenience and range
- ‘Retail is detail’
- Loyalty cards
Where Do Consumers Shop by Type of Outlet?
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- Key points
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- Figure 44: Shops used regularly/occasionally, GB, 2008-09
- Who shops where?
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- Figure 45: Usage of supermarkets for main shop, September 2010
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- Figure 46: Primary shopping destinations, customer profile, September 2010
- Secondary shopping destinations
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- Figure 47: Secondary shopping destinations, September 2010
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- Figure 48: UK food retailers: Profile of secondary shopping customers, September 2010
- Customer loyalty – how many shops are used?
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- Figure 49: Numbers of outlets used for top-up shopping, September 2010
Consumer Attitudes Towards Self-scanning
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- Key points
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- Figure 50: Use of traditional staffed checkouts and self scan checkouts, September 2010
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- Figure 51: Profile of Self-scanning users and non-users, September 2010
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- Figure 52: Places used for main grocery shopping, by use of traditional staffed checkouts and self scan checkouts, September 2010
- Attitudes to self-scanning
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- Figure 53: Attitudes towards self-scanning terminals, September 2010
- Attitudes to self-scanning by retailer used
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- Figure 54: Attitudes towards self-scanning terminals, by places used for main grocery shopping, September 2010
Price Promotions
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- Key points
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- Figure 55: Preference for price promotions, September, 2010
- Demographic analysis
Aldi Stores Ltd (UK)
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- Figure 56: Aldi (Europe): Sales as share of all food retailers' sales in Europe, 2005-09
- Figure 57: Aldi: Sales as share of all food retailers' sales in various European countries, 2005-09
- Strategic evaluation
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- Figure 58: Aldi: Stores per million capita in selected European countries, 2009
- Recent history
- Sales performance
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- Figure 59: Aldi: Group sales performance, 2005-09
- Store portfolio
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- Figure 60: Aldi: Outlet data, 2005-09
- Retail offering
- e-commerce and home shopping
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Asda Group
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- Figure 61: Asda Group Ltd: Sales as share of all food retailers’ sales in UK, 2005-09
- Strategic evaluation
- New formats
- Margins vs prices
- Prospects
- Recent history
- Financial performance
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- Figure 62: Asda Group Ltd: Group financial performance, 2005-09
- Store portfolio
- Smaller stores
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- Figure 63: Asda Group Ltd: Outlet data, 2005-09
- Retail offering
- Promotions
- Own brands
- e-commerce and home shopping
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Co-operative Group (Food)
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- Figure 64: Co-operative Group (Food): Sales as share of all food retailers’/grocers’ sales in the UK, 2005-09
- Strategic evaluation
- Recent history
- Financial performance
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- Figure 65: The Co-operative Group (Food): Like-for-like sales growth, 2005-09
- Figure 66: Co-operative Group (Food): Group financial performance, 2005/06-2009/10
- Somerfield
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- Figure 67: Somerfield: Group financial performance, 2004/05-2008/09
- Co-op: Interim report 2010
- Store portfolio
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- Figure 68: Co-operative Group (Food): Outlet data, 2005/06-2009/10
- Retail offering
- e-commerce and home shopping
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Iceland Foods
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- Figure 69: Iceland Foods Ltd: Sales as share of all food retailers’ sales in the UK, 2005-09
- Recent history
- Financial performance
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- Figure 70: Iceland Foods Ltd: Group financial performance, 2005/06-2009/10
- Store portfolio
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- Figure 71: Iceland Foods Ltd: Outlet data, 2005/06-2009/10
- Retail offering
- e-commerce and home shopping
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J Sainsbury
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- Figure 72: J Sainsbury: Sales as share of all food and fuel retailers in UK, 2005-09
- Strategic evaluation
- Recent history
- Financial performance
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- Figure 73: Sainsbury’s Supermarkets, 2005/06-2009/10
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- Figure 74: Sainsbury’s Supermarkets: Sales trends, 2005/06-2009/10
- Store portfolio
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- Figure 75: Sainsbury’s Supermarkets: Outlet data, 2005/06-2009/10
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- Figure 76: Sainsbury’s Supermarkets: Outlets by size, 2005/06-2009/10
- Retail offering
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- Figure 77: Sainsbury’s Supermarkets: Own brand portfolio, 2010
- e-commerce and home shopping
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Marks & Spencer (Food)
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- Figure 78: M&S Food: Sales as share of all food retailers’ sales in the UK, 2005-09
- Recent history
- Financial performance
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- Figure 79: M&S Food: Financial performance, 2005/06-2009/10
- First half 2010/11
- Store portfolio
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- Figure 80: M&S Food: Outlet data, 2005/06-2009/10
- Retail offering
- e-commerce and home shopping
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Schwarz Group (UK)
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- Figure 81: Schwarz Group: Sales as share of all food retailers in UK, 2005-09
- Strategic evaluation
- Limitations at home
- But further opportunities abroad
- Losing shoppers in the UK
- Smaller format
- Short term turbulence but longer term staying power
- Recent history
- Financial performance
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- Figure 82: Schwarz Group: Estimated Group sales performance, 2066-10
- Store portfolio
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- Figure 83: Schwarz Group: Estimated outlet numbers, 2006-10
- Retail offering
- e-commerce
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SPAR International
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- Figure 84: SPAR (Europe): Sales as share of all European food retailers’ sales, 2005-09
- Figure 85: SPAR (UK): Sales as share of all UK food retailers’ sales, 2005-09
- Strategic evaluation
- History
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- Figure 86: SPAR International: Year of entry, by country
- Financial performance
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- Figure 87: SPAR International: Retail sales, by country, 2005-09
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- Figure 88: SPAR International: Estimated European sales exclusive of sales tax, 2009
- Store portfolio
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- Figure 89: SPAR International: Outlet data, 2005-09
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- Figure 90: SPAR International: Sales per m², by country (Europe), 2009
- Figure 91: SPAR International: Store formats, 2009
- Retail offering
- e-commerce and home shopping
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Tesco
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- Figure 92: Tesco (UK): Sales as share of all food retailers’/grocers’ sales in the UK, 2005/06-09/10
- Strategic evaluation
- The price/quality balance
- A leader in online
- Ongoing cultivation of the international business
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- Figure 93: Tesco sales densities: GB£ store sales per m2, 2005/06-2009/10
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- Figure 94: Tesco: Geographic origin of turnover, 2005/06 and 2009/10
- Global expansion timeline
- Financial performance
- Group record
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- Figure 95: Tesco: Financial performance, 2005/06-2009/10
- UK sales breakdown
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- Figure 96: Tesco UK: Sales by product category, 2008/09 and 2009/10
- Non-UK performance
- UK retailing services
- 2010/11 interim results
- Store portfolio
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- Figure 97: Tesco: Outlet data, 2005/06-2009/10
- Figure 98: Tesco: UK store formats, 2009/10
- Retail offering
- e-commerce and home shopping
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Waitrose
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- Figure 99: Waitrose Ltd: Sales as share of all food retailers’ sales in the UK, 2005-09
- Recent history
- Financial performance
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- Figure 100: Waitrose Ltd: Group financial performance, 2005/06-2009/10
- Store portfolio
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- Figure 101: Waitrose Ltd: Outlet data, 2005/06-2009/10
- Retail offering
- e-commerce and home shopping
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Wm Morrison Group
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- Figure 102: Wm Morrison Group: Sales as share of all food retail & fuel sales in the UK, 2005-09
- Strategic evaluation
- Recent history
- Financial performance
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- Figure 103: Wm Morrison Group: Group financial performance, 2005/06-2009/10
- Figure 104: Sales densities for Morrisons, Tesco UK, J. Sainsbury and Asda, 2008/09 and 2009/10
- Sales trends
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- Figure 105: Wm Morrison Group: Sales performance, 2005/06-2009/10
- First-half results 2010/11
- Store portfolio
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- Figure 106: Wm Morrison Group: Outlet data, 2005/06-2009/10
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- Figure 107: Wm Morrison Supermarkets: Store portfolio, by size, 2006-10
- Retail offering
- e-commerce and home shopping
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Appendix – Broader Market Environment
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- Population
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- Figure 108: Europe Top 5: Population breakdown, by age group, 2005
- Figure 109: Europe Top 5: Population breakdown, by age group, 2010
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- Figure 110: Europe Top 5: Population breakdown, by age group, 2015
- Figure 111: Europe Top 5: Population breakdown, by age group, 2020
- GDP
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- Figure 112: Europe Top 5: GDP (in current prices) 2000-Q2 2010
- Figure 113: Europe top 5: GDP growth rates (in constant prices), 2000-Q2 2010
- Consumer spending
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- Figure 114: Europe top 5: Consumer spending (in current prices), 2001-09
- Figure 115: Europe Top 5: Consumer spending growth rates (in constant prices), 2001-09
- Consumer prices
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- Figure 116: Europe Top 5: Consumer prices, 2001-Q3 2010
- Food consumer prices
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- Figure 117: Europe Top 5: Consumer prices for food, 2001-October 2010
- Unemployment
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- Figure 118: Europe Top 5: Average rate of unemployment, 2001-Q2 2010
- Interest rates
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- Figure 119: UK and Eurozone: Interest rates, 2004-Q1 2010
- Consumer confidence
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- Figure 120: Europe top 5: Consumer confidence, January 2009-June 2010
Appendix – What Do Consumers Look For in a Supermarket?
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- Figure 121: Most popular factors considered for choice of a particular super market for main weekly shopping, by demographics, May 2010
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- Figure 122: Next most popular factors considered for choice of a particular super market for main weekly shopping, by demographics, May 2010
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Appendix – Where Consumers Shop by Type of Outlet?
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- Figure 123: Shops used regularly/occasionally, by demographics, GB, 2009
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- Figure 124: Shops used regularly/occasionally, by demographics, GB, 2009
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Appendix – Where Consumers Shop by Retailer?
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- Figure 125: Where people do their primary shop, detailed demographics, September 2010
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- Figure 126: Places used for main grocery shopping, by places used for top-up grocery shopping, September 2010
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- Figure 127: Places used for top-up grocery shopping, by places used for main grocery shopping, Sep 2010
- Places used for top up shopping – detailed demographics
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- Figure 128: Places used for top-up grocery shopping, by demographics, September 2010
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- Figure 129: Places used for top-up grocery shopping, by demographics, September 2010 (continued)
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Appendix – Attitudes towards Self-scanning
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- Figure 130: Use of traditional staffed checkouts and self scan checkouts, by demographics, September 2010
- Figure 131: Attitudes to self-scanning terminals, detailed demographics, September 2010
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- Figure 132: Attitudes to self-scanning terminals, detailed demographics, September 2010 (continued)
- Figure 133: Attitudes to self-scanning terminals, detailed demographics, September 2010 (continued)
- Figure 134: Attitudes to self-scanning terminals, detailed demographics, September 2010 (continued)
- Figure 135: Attitudes towards self-scanning terminals, by places used for main grocery shopping, Sep 2010
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