Table of Contents
Executive Summary
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- The market
- Value growth slowed by price competition
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- Figure 1: Grocery retailers: Sector size and forecast (incl VAT), 2009-19
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- Figure 2: Grocery retailers: Sector size and forecast (incl VAT), by segment, 2009-19
- Companies, brands and innovations
- Market shares
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- Figure 3: Leading grocers: Market shares, 2013
- Figure 4: The Big Four grocers: Market shares, 2009-14
- Brand research
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- Figure 5: Brand research: Levels of trust and differentiation, September 2014
- The consumer
- Where they shop
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- Figure 6: The consumer: Retailers used for main and top-up shops, September 2014
- Types of store used
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- Figure 7: The consumer: Type of store used for main shops and top-up shops, September 2014
- Attitudes to the discounters
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- Figure 8: The consumer: Attitudes to Aldi/Lidl – Agreement with statements, September 2014
- Why they do not shop (or shop more) at Aldi/Lidl
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- Figure 9: The consumer: Why they do not do any/more of their grocery shopping at Aldi or Lidl, September 2014
- Non-groceries purchased from supermarkets
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- Figure 10: The consumer: Non-grocery items bought from grocery retailers, whether online or in-store, September 2014
- What we think
Issues and Insights
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- Aldi and Lidl – How big will they get?
- The facts
- The implications
- Is the hypermarket dead?
- The facts
- The implications
- But shopper trends are hitting grocery retailers
- The facts
- The implications
- So should retailers be expanding their convenience formats?
- The facts
- The implications
Trend Application
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- Accentuate the Negative
- Life Hacking
- Mintel Futures
The Market Environment
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- Key points
- Inflation dwindles
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- Figure 11: Consumer prices: Annual % change, January 2012-September 2013
- Real-terms growth likely to return
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- Figure 12: Annual consumer prices inflation (food, beverages, tobacco) versus annual growth in grocers’ sector sales, 2009-14
- Consumers feeling better off
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- Figure 13: The consumer: Trends in current financial situation compared a year ago, July 2011-September 2014
- But they are not losing frugal habits
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- Figure 14: The consumer: Those saying they “do more”, selected attitudes, December 2013-September 2014
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- Figure 15: The consumer: Those saying they “do more”, average age and affluence, September 2014
- Ageing population
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- Figure 16: Projected age structure of the UK population, 2013 and 2018
- Young people living with parents for longer
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- Figure 17: UK: Percentage of young adults aged 20-34 living with their parents, by age group, 2004-13
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- Figure 18: UK: Number of households, by occupancy, 2004 and 2013
Consumer Spending and Channels of Distribution
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- Key points
- Low inflation to impact on spending growth in 2014
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- Figure 19: Consumer spending on food, beverages and tobacco (incl VAT), 2009-13
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- Figure 20: Estimated distribution of spending on food, beverages and tobacco, by type of retailer, 2013
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- Figure 21: Food specialists sub-sector breakdown, 2013
- Spending on non-food grocery categories
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- Figure 22: Consumer spending on non-food grocery categories (incl VAT), 2009-13
Sector Size and Forecast
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- Key points
- Value growth slowed by price competition
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- Figure 23: Grocery retailers: Sector size and forecast (incl VAT), 2009-19
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- Figure 24: Grocery retailers: Sector size and forecast (incl VAT), at current and constant prices, 2009-19
- Segment forecasts: Supermarkets stagnate, online surges, convenience grows
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- Figure 25: Grocery retailers: Sector size and forecast (incl VAT), by segment, 2009-19
- Supermarkets segment: Stagnating in 2014
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- Figure 26: Supermarkets: Segment size and forecast (incl VAT), 2009-19
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- Figure 27: Supermarkets: Segment size and forecast (incl VAT), at current and constant prices, 2009-19
- Convenience stores segment: Outperforming
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- Figure 28: Convenience stores: Segment size and forecast (incl VAT), 2009-19
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- Figure 29: Convenience stores: Segment size and forecast (incl VAT), 2009-19
- Online: Strong growth from a small base
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- Figure 30: Online sales by grocers: Segment size and forecast (incl VAT), 2009-19
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- Figure 31: Online sales by grocers: Segment size and forecast (incl VAT), at current and constant prices, 2009-19
- Real-terms sector growth: 2014 will be better
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- Figure 32: Annual consumer prices inflation (food, beverages, tobacco) versus annual growth in grocers’ sector sales, 2009-14
- Forecast methodology
- The fan chart
Strengths and Weaknesses
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- Strengths
- Weaknesses
Non-grocery Retail
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- Key points
- Non-groceries declining as share of sector sales
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- Figure 33: Grocers sector: Estimated total general merchandise and clothing/footwear sales (incl VAT), 2011-13
- Non-grocery as a proportion of retailers’ sales
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- Figure 34: Leading grocers: Estimated general merchandise and clothing sales as % of total sales, 2013
- Non-grocery sales by major retailer
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- Figure 35: Leading grocers’ estimated sales of major non-food categories (excl VAT), 2011-13
Brand Perceptions and Social Media
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- Brand perceptions
- Key brand metrics
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- Figure 36: Key brand metrics, September 2014
- Brand map
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- Figure 37: Attitudes towards and usage of brands in the supermarket sector, September 2014
- Correspondence analysis
- Brand attitudes
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- Figure 38: Attitudes, by supermarket brand, September 2014
- Brand personality
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- Figure 39: Supermarket brand personality – Macro image, September 2014
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- Figure 40: Supermarket brand personality – Micro image, September 2014
- Brand usage
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- Figure 41: Supermarket brand usage, September 2014
- Brand experience
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- Figure 42: Supermarket brand experience, September 2014
- Social media and online buzz
- Social media metrics
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- Figure 43: Social media metrics of selected supermarket brands, October 2014
- Tesco leads in overall mentions
- Lidl adds Twitter to its online presence
- Brands often have multiple social media profiles
- Customers proud to associate themselves with Marks and Spencer
- Online mentions
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- Figure 44: Share of conversation of top five selected supermarket brands, by week, 27 October 2013-25 October 2014
- Figure 45: Share of conversation of next selected supermarket brands, by week, 27 October 2013-25 October 2014
- Tesco announcements cause spike in mentions
- Asda outfits cause increase in conversation for second year in a row
- Morrisons criticised for advertising stunt but earns spike in mentions
- Topics of discussion
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- Figure 46: Topics of discussion around selected supermarket brands, 27 October 2013-25 October 2014
- Tesco’s dominance means it is most spoken about brand in all different contexts
- Financial results have particular importance in face of Tesco problems
- Price remains most spoken about topic
- Peter Andre helps to increase Iceland presence
- Freshness is not necessarily an online concern
- Where discussion is occurring
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- Figure 47: Conversation, by page type, by brand, 27 October 2013-25 October 2014
- Analysis by brand
- Tesco
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- Figure 48: Topic cloud around mentions of Tesco, 27 October 2013-25 October 2014
- Asda, Sainsbury’s and Morrisons
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- Figure 49: Topic cloud around mentions of Asda, 27 October 2013-25 October 2014
- Figure 50: Topic cloud around mentions of Sainsbury’s, 27 October 2013-25 October 2014
- Figure 51: Topic cloud around mentions of Morrisons, 27 October 2013-25 October 2014
- Aldi and Lidl
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- Figure 52: Topic cloud around mentions of Aldi, 27 October 2013-25 October 2014
- Figure 53: Topic cloud around mentions of Lidl, 27 October 2013-25 October 2014
- M&S Simply Food
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- Figure 54: Topic cloud around mentions of M&S Simply Food, 27 October 2013-25 October 2014
- Waitrose
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- Figure 55: Topic cloud around mentions of Waitrose, 27 October 2013-25 October 2014
- The Co-operative
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- Figure 56: Topic cloud around mentions of The Co-operative, 27 October 2013-25 October 2014
- Iceland
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- Figure 57: Topic cloud around mentions of Iceland, 27 October 2013-25 October 2014
Brand Communication and Promotion
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- Key points
- Total ad spend up
- The Big Four
- Discounters ramp up advertising spend
- Online grocery
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- Figure 58: Main media advertising spend, by leading grocery retailers, 2010-13
- The press accounts for the lion’s share of ad spend
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- Figure 59: Leading grocers’ main media advertising spend, by media type, 2013
- What we have seen in 2014
- Discounters pushing own brand product quality
- Premier Stores first ever TV advertising campaign
- Iceland’s ground-breaking commercial partnership with The Sun
- Price-matching gets fierce and ugly
The Consumer – Shopper Profiles by Retailer
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- Key points
- Main-shop customer breakdowns
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- Figure 60: The consumer: Breakdown of main-shop customers at major grocers, by age group, September 2014
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- Figure 61: The consumer: Breakdown of main-shop customers at major grocers, by region, September 2014
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- Figure 62: The consumer: Breakdown of main-shop customers at major grocers, by social grade, September 2014
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- Figure 63: The consumer: Breakdown of main-shop customers at major grocers, by type of location, September 2014
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- Figure 64: The consumer: Breakdown of main-shop customers at major grocers, by parent/non-parent, September 2014
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- Figure 65: The consumer: Breakdown of main-shop customers at major grocers, by financial sentiment, September 2014
The Consumer – Where They Shop
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- Key points
- What we asked
- Main grocery shopping: Aldi nudging closer to Morrisons
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- Figure 66: The consumer: Retailer used for main grocery shop, September 2014
- Changes year-on-year
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- Figure 67: Retailer used for main shop/most grocery shopping, 2012, 2013 and 2014
- Top-up shopping: Aldi and Lidl rivalling the Co-op and Morrisons
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- Figure 68: The consumer: Retailers used for top-up grocery shop, September 2014
- Total usage: two thirds of all consumers use Tesco
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- Figure 69: The consumer: Retailers used for main and top-up shops, September 2014
- Demographics: typical Morrisons customer is now more affluent
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- Figure 70: The consumer: Retailers used for main grocery shop, September 2014
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- Figure 71: The consumer: Retailers used for top-up grocery shop, average age and affluence, September 2014
- Main shop, by region: Aldi under indexes in London
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- Figure 72: The consumer: Retailer used for main grocery shop, by region – Relative to national average for each retailer, September 2014
- Online focus group
The Consumer – Types of Stores Used
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- Key points
- What we asked
- Supermarkets continue to dominate main grocery shops
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- Figure 73: The consumer: Type of store used for main grocery shop, September 2014
- And supermarkets still lead for top-up shops
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- Figure 74: The consumer: Type of store used for top-up grocery shops, September 2014
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- Figure 75: The consumer: Type of store used for grocery shopping – Total of main and top-up shops, September 2014
- Frequency of usage
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- Figure 76: The consumer: Frequency of usage, by store type, September 2014
- Main shop demographics: Young turn to c-stores, older turn to out-of-town
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- Figure 77: The consumer: Type of store used for main grocery shop, by age group, September 2014
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- Figure 78: The consumer: Type of store used for main grocery shop, average age and affluence, September 2014
- Type of store, by retailer used for main shop
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- Figure 79: The consumer: Type of store used for main grocery shop, by retailer used for main grocery shop, September 2014
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- Figure 80: The consumer: Type of store used for main grocery shop, by retailer used for main grocery shop, September 2014 (continued)
- Repertoire of stores used for top-up shopping
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- Figure 81: The consumer: Repertoire analysis of type of store used for top-up grocery shops, September 2014
- Online focus group: Changing shopping habits
The Consumer – Attitudes Towards Aldi and Lidl
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- Key points
- What we asked
- Almost half of consumers now shop at Aldi/Lidl more
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- Figure 82: The consumer: Attitudes to Aldi/Lidl – Agreement with statements, September 2014
- Three quarters would stick with Aldi/Lidl even if they had more money
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- Figure 83: The consumer: Attitudes to Aldi/Lidl – Changing shopping habits, September 2014
- Focus group
- Shoppers think quality has improved in fresh foods
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- Figure 84: The consumer: Attitudes to Aldi/Lidl – Quality of products, September 2014
- Focus group
- Brand choice has improved but still cannot do all their shopping at Aldi/Lidl
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- Figure 85: The consumer: Attitudes to Aldi/Lidl – Choice of products, September 2014
- Focus group
- Non-grocery special deals are a key selling point
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- Figure 86: The consumer: Attitudes to Aldi/Lidl – Non-grocery products, September 2014
- Attitudes to discounters, among those who shop at the discounters
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- Figure 87: The consumer: Attitudes to Aldi/Lidl among Aldi/Lidl shoppers – Relative to total shopper average, September 2014
- By where they shop
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- Figure 88: The consumer: Attitudes to Aldi/Lidl, by where they do their main grocery shop, September 2014
- Focus group: What could prompt shopper migration to or from Aldi/Lidl?
The Consumer – Why They Do not Shop at Aldi/Lidl
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- Key points
- What we asked
- Limited ranges and few stores limit shopper numbers
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- Figure 89: The consumer: Why they do not do any/more of their grocery shopping at Aldi or Lidl, September 2014
- By region: too few stores in London and the south east?
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- Figure 90: The consumer: Why they do not do any/more of their grocery shopping at Aldi or Lidl – “There is not one in a location that is convenient for me”, September 2014
- By social grade: ABs more concerned with brand choice
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- Figure 91: The consumer: Why they do not do any/more of their grocery shopping at Aldi or Lidl, September 2014
- Why they do not shop there, crossed by where they do shop
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- Figure 92: The consumer: Why they do not do any/more of their grocery shopping at Aldi or Lidl, by where they do their main grocery shop, September 2014
- Online focus group
The Consumer – Buying Non-grocery Items from Supermarkets
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- Key points
- Fully 86% buy non-groceries from supermarkets
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- Figure 93: The consumer: Non-grocery items bought from grocery retailers, September 2014
- And 49% are buying non-groceries from supermarkets online
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- Figure 94: The consumer: Non-grocery items bought from grocery retailers, by in-store/online, September 2014
- Supermarkets lose non-grocery shoppers in 2014
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- Figure 95: The consumer: Non-grocery items bought from grocery retailers, September 2013 and September 2014
- 2014 vs 2013: In-store
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- Figure 96: The consumer: Non-grocery items bought from grocery retailers – In-store, September 2013 and September 2014
- 2014 vs 2013: Online
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- Figure 97: The consumer: Non-grocery items bought from grocery retailers – Online, September 2013 and September 2014
- By main-shop retailer: Aldi shoppers over-index on DIY
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- Figure 98: Non-grocery purchases (whether online or in-store), by Retailers used for main and top-up shops, September 2014
- Online focus group
Who’s Innovating?
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- Key points
- Pioneering independent ethical supermarket
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- Figure 99: hiSbe, Brighton
- Zero-waste supermarket
- Click-and-Collect
- Improving the checkout process for in-store shoppers
- Unique DIY mental health screening kiosk
- Car-like GPS in-store sales navigation system
- Smart trolley
- App for cash-back on groceries
- iBeacon technology changing the shopping experience at Waitrose
- Home scanning
Space Allocation Summary
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- Key points
- Summary data and classifications
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- Figure 100: Food, non-food standard classifications, 2014
- Convenience – Comparison goods
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- Figure 101: Leading food retailers: Convenience comparison split, October 2014
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- Figure 102: Leading food retailers, pattern of space allocation to foods, October 2014
- Detailed space allocation data
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- Figure 103: UK hypermarkets: Estimated space allocations, October 2014
- Figure 104: UK hypermarkets: Estimated space allocations, October 2014 (continued)
- Figure 105: UK hypermarkets: Estimated space allocations, October 2014 (continued)
- Figure 106: UK hypermarkets: Estimated space allocations, October 2014 (continued)
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- Figure 107: Leading superstores: Estimated space allocations, October 2014
- Figure 108: Leading superstores: Estimated space allocations, October 2014 (continued)
- Figure 109: Leading superstores: Estimated space allocations, October 2014 (continued)
- Figure 110: Leading superstores: Estimated space allocations, October 2014 (continued)
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- Figure 111: Smaller stores and hard discounters: Estimated space allocations, October 2014
- Figure 112: Smaller stores and hard discounters: Estimated space allocations, October 2014 (continued)
- Figure 113: Smaller stores and hard discounters: Estimated space allocations, October 2014 (continued)
- Figure 114: Smaller stores and hard discounters: Estimated space allocations, October 2014 (continued)
Retail Product Mix
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- Key points
- Sales
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- Figure 115: Leading food retailers: Estimated sales breakdown, 2013/14
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- Figure 116: Leading food retailers: Estimated sales breakdown, 2013
- Sales densities
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- Figure 117: Leading retailers, Estimated sales density by product, 2013/14
- Market shares of spending on food
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- Figure 118: Leading food retailers: Estimated share of all spending on food and drink, 2013
Leading Grocery Retailers
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- Key points
- Sales: Tesco’s first slippage in memory
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- Figure 119: Leading grocery retailers: Net sales, 2009-13
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- Figure 120: Leading 10 grocery retailers: Compound annual growth rates in net sales, 2009-13
- Store numbers and sales per outlet
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- Figure 121: Leading grocery retailers: Store numbers, 2009-13
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- Figure 122: Leading 10 grocery retailers: Compound annual growth rates in sales per outlet, 2009-13
- Figure 123: Leading grocery retailers: Annual sales per outlet, 2009-13
- Sales area and sales densities
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- Figure 124: Leading grocery retailers: Total sales area, 2009-13
- Figure 125: Leading grocery retailers: Annual sales per sq m, 2009-13
- Operating profits and operating margins
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- Figure 126: Leading grocery retailers: Operating profits, 2009-13
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- Figure 127: Leading grocery retailers: Operating margins, 2009-13
Market Shares
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- Key points
- Three of the Big Four are expected to lose share in 2014
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- Figure 128: Leading grocery retailers: Share of sector sales, 2009-14
- The Big Four fall below two-thirds share
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- Figure 129: Market shares: The Big Four and Tesco, 2009-14
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- Figure 130: Market shares: Aldi and Lidl, 2009-14
- How we calculate our market shares
Online
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- Key points
- Online sales by grocery retailers
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- Figure 131: Online sales by grocers as % of grocers’ sector sales, 2009-19
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- Figure 132: Online sales by grocers: Segment size and forecast (incl VAT), 2009-19
- Market shares
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- Figure 133: Estimated market shares of online sales by grocers, 2013
- UK coverage
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- Figure 134: Coverage: Selected leading online grocers, February/March 2014
- Online sales of grocery products
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- Figure 135: Online sales of grocery products (incl VAT), 2008-18
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- Figure 136: Online grocery sales (incl VAT), at current and constant prices, 2008-18
- The consumer
- Nearly one quarter now buy online
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- Figure 137: The consumer: Type of store used for grocery shopping – Online, September 2014
- Where they shop online
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- Figure 138: The consumer: Retailers used for majority of grocery shopping, online, December 2013
- Why they do not shop online
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- Figure 139: The consumer: Reasons for not shopping for groceries online, November 2012
- Website visitor data
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- Figure 140: Leading food retail websites, by unique visitor numbers, September 2014
Aldi
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- What we think
- Germany
- Elsewhere
- Where next?
- Company background
- Company performance
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- Figure 141: Aldi: Group financial performance, 2008/9-2012/13
- Figure 142: Aldi: Outlet data, 2008/9-2012/13
- Figure 143: Aldi: Outlet data, 2008/9-2012/13 (continued)
- Retail offering
Asda Group Ltd
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- What we think
- Price
- Aldi and Lidl
- Stores
- Online
- Where next?
- Company background
- Company performance
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- Figure 144: Asda Group Ltd: Group financial performance, 2009-13
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- Figure 145: Asda Group Ltd: Outlet data, 2009-13
- Retail offering
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- Figure 146: Asda: Sales mix, 2013
The Co-operative Food
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- What we think
- Members vote in favour of changes to governance
- Clear focus on c-stores
- Marston’s deal brings over 60 new stores
- Improving the c-store offer
- Company background
- Company performance
- Interim results reflect a company in transition
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- Figure 147: The Co-operative Food: Group financial performance, 2009/10-2013/14
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- Figure 148: The Co-operative Food: Outlet data, 2009/10-2013/14
- Retail offering
Iceland Foods
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- What we think
- Riding the discounter wave
- Online: Gaining coverage
- Remains more popular as a top-up shop destination
- Company background
- Company performance
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- Figure 149: Iceland Foods Ltd: Group financial performance, 2009/10-2013/14
- Figure 150: Iceland Foods Ltd: Outlet data, 2009/10-2013/14
- Retail offering
Lidl/Kaufland (Schwarz Group)
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- What we think
- Online
- Where next
- Company background
- Company performance
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- Figure 151: Schwarz Group: Group financial performance, 2009/10-2013/14
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- Figure 152: Schwarz Group: Outlet data, 2009/10-2013/14
- Figure 153: Schwarz Group: Outlet data, 2009/10-2013/14 (continued)
- Figure 154: Schwarz Group: Outlet data, 2009/10-2013/14 (continued)
- Figure 155: Schwarz Group: Outlet data, 2009/10-2013/14 (continued)
- Retail offering
Marks & Spencer (UK food)
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- What we think
- Product differentiation
- ‘Shop for today’ M&S Simply Food store expansion
- Developing the in-store experience
- Limited click-and-collect service
- Company background
- Company performance
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- Figure 156: Marks & Spencer (UK food): Group financial performance, 2009/10-2013/14
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- Figure 157: Marks & Spencer (UK food): Food outlets by format, 2009/10-2013/14
- Figure 158: Marks & Spencer (UK food): Outlet data, 2009/10-2013/14
- Retail offering
Wm Morrison Group
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- What we think
- What went wrong?
- But decline of superstores
- Match and More
- Cutting SKUs
- Online
- Going forward
- Company background
- Company performance
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- Figure 159: Wm Morrison Group: Group financial performance, 2009/10-2013/14
- Figure 160: Wm Morrison Group: Outlet data, 2009/10-2013/14
- Retail offering
Ocado
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- What we think
- Morrisons partnership gets off to a good start
- Potential for similar tie-ups?
- New Sizzle “destination site” joins Fetch
- Company background
- Company performance
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- Figure 161: Ocado Ltd: Group financial performance, 2008/9-2012/13
- Retail offering
J. Sainsbury
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- What we think
- Write downs
- Promotions
- Launch of Netto
- Change of CEO
- Where next?
- Company background
- Company performance
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- Figure 162: J. Sainsbury: Group financial performance, 2009/10-2013/14
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- Figure 163: J. Sainsbury: Outlet data, 2009/10-2013/14
- Retail offering
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- Figure 164: Sainsbury’s: Estimated sales mix, 2013/14
Spar Europe
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- What we think
- Enhanced own-label offering targeting meal-times
- Pushing its convenient shopping destination credentials
- Limited online grocery shopping option
- Positioning itself as a healthy food retailer
- Improving the in-store checkout experience for its customers
- Tailored formats offering additional sales growth opportunities
- Expanded everyday general merchandise range
- Company background
- Company performance
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- Figure 165: SPAR International: Retail sales by country, 2009-13
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- Figure 166: SPAR International: Outlets, 2009-13
- Figure 167: SPAR International: Retail sales area, 2009-13
- Figure 168: SPAR International: Sales per sq m, by country, 2009-13
- Retail offering
Tesco Plc
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- What we think
- Profits overstatement
- Unintended consequences
- UK stores all important
- Where next?
- Longer term
- Company background
- Company performance
- Recent trading
- Profits overstatement
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- Figure 169: Tesco Plc: Group financial performance, 2009/10-2013/14
- Figure 170: Tesco Plc: Outlet data, 2009/10-2013/14
- Retail offering
Waitrose Ltd
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- What we think
- Creating additional reasons to visit its stores
- Establishing itself in the potentially lucrative commuter market
- Online grocery delivery enhancements
- Specialist online product offering boosting sales
- myWaitrose driving incremental sales
- Company background
- Company performance
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- Figure 172: Waitrose Ltd: Group financial performance, 2009/10-2013/14
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- Figure 173: Waitrose Ltd: Outlet data, 2009/10-2013/14
- Retail offering
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