Table of Contents
Executive Summary
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- The market
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- Figure 1: Consumers: State of finances, 2009-15
- Food retailers’ sales
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- Figure 2: Food retailers: Breakdown of Sector, 2015 (est)
- Figure 3: All food retailers: sales, 2010-20
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- Figure 4: Channels of distribution for food and drink, 2014
- Socio-economic changes
- Prices
- Online
- Leading retailers
- Market shares
- Space allocation and product mix
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- Figure 5: Leading food retailers: sales mix, 2014
- The consumer
- Tesco dominant
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- Figure 6: Retailer most money spent in during the last month, August 2015
- Main shop vs convenience
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- Figure 7: Proportions of grocery shoppers who have changed the way they shop in the last year, August 2015
- What do people want from their supermarket?
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- Figure 8: Most important factor in choosing where to shop, August 2015
- Key factors by supermarket used
- Satisfaction
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- Figure 9: Overall net satisfaction with main retailer by criteria, August 2015
- Opening hours
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- Figure 10: Attitudes towards Sunday opening, August 2015
- Pricing
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- Figure 11: Attitudes towards grocers’ pricing, August 2015
- Non-foods
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- Figure 12: Attitudes towards buying non-foods and services from grocery retailers, August 2015
- What we think
Issues and Insights
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- Why are the superstores losing market share?
- The facts
- The implications
- Should the superstores be cutting prices?
- The facts
- The implications
- Is this the end of the superstore?
- The facts
- The implications
- Online – A threat?
- The facts
- The implications
The Market – What You Need to Know
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- Consumer confidence
- Inflation
- Consumer spending
- Non-retail and services
- Sales mix
- Channels of distribution
- Sector prospects
- Socio-economic changes
- Prices
Market Drivers
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- Consumer confidence
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- Figure 13: Consumers: state of finances, 2009-2015
- Food tracker
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- Figure 14: People who look out for special offers, Dec 2013 – Aug 2015
- Aldi, Lidl
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- Figure 15: People who shop more or the same at Aldi and Lidl, Dec 2013 – Aug 2015
- Inflation
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- Figure 16: Food and drink inflation, 2010-15
Consumer Spending on Food and Drink
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- Food and drink
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- Figure 17: Spending on food drink and tobacco, 2010-14
- Non-foods
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- Figure 18: Spending on key non-food categories, 2010-14
- Non-retail and services
- Fuel
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- Figure 19: Leading food retailers: Share of fuel sales, 2011-14
- Banking and financial services
- Other non-retail
- Food retailers sales mix
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- Figure 20: Food retailers: Sales by product, 2014
Channels of Distribution
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- Figure 21: Channels of distribution for food and drink, 2014
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Sector Size and Forecast
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- Figure 22: All food retailers, year-on-year growth 2010-15
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- Figure 23: Food retailers market size (including VAT), 2010-14
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- Figure 24: Food retailers: Breakdown of Sector, 2015 (est)
- Forecast
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- Figure 25: All food retailers: sales, 2010-20
- Figure 26: All food retailers: Sales 2010-2020
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- Figure 27: Food superstores: Sales 2010-20
- Figure 28: Food superstores: Sales 2010-20
- Figure 29: Convenience stores: Sales value, 2010-20
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- Figure 30: Convenience stores: Sales value, 2010-20
- Figure 31: Discounters and other value retailers: Sales value, 2010-20
- Figure 32: Discounters and other value retailers: Sales value, 2010-20
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- Figure 33: Food and drink specialists: Sales, 2010-20
- Figure 34: Food and drink specialists: sales 2010-2020
- Where people live
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- Figure 35: Proportion of people renting their homes, 2001-14
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- Figure 36: Profile of population by nature of home tenure, 2014
- Pricing and the CMA report
- Which?’s complaints
- The CMA response
- Where next?
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Leading Retailers – What You Need to Know
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- Online
- Leading retailers
- Market shares
- Space allocation and product mix
Innovation and Launch Activity
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- Enhanced in-store experience
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- Figure 37: Asda in-store virtual reality Halloween experience, Watford
- Making shopping trips easier
- Transumers
- New not-for-profit grocery store concept
- ‘App-less’ shopping platform
- 24/7 click-and-collect
- Amazon ups the ante with one-hour grocery service
- Speciality supermarket
- Discount grocery chain targeting value-conscious shoppers
Leading Grocery Retailers: Key Metrics
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- 2014: A year to forget for the major operators
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- Figure 38: Leading grocery retailers: Net sales, 2010-14
- The market remains tough but there are signs of improvement for the majors
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- Figure 39: Like-for-like sales performance, Exc. VAT and Fuel, Q1 2014 – Q2 2015
- Store numbers and sales per outlet
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- Figure 40: Leading grocery retailers: Store numbers, 2010-14
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- Figure 41: Leading grocery retailers: Annual sales per outlet, 2010-14
- Sales area and sales densities
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- Figure 42: Leading grocery retailers: Total sales area, 2010-14
- Figure 43: Leading grocery retailers: Annual sales per sq m, 2010-14
- Operating profits and margins
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- Figure 44: Leading grocery retailers: Operating profits, 2010-14
- Figure 45: Leading grocery retailers: Operating margins, 2010-14
Market Shares
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- Figure 46: Leading grocery retailers: Share of sector sales, 2014
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- Figure 47: Leading grocery retailers: Share of sector sales, 2010-15
- Figure 48: Market shares: The Big Four grocery multiples, 2010-15
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- Figure 49: Market Shares: Aldi and Lidl, 2010-15
- A note on our market shares
- Space allocation and retail product mix
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Online
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- Figure 50: Online sales by grocers as a % of all grocery sector sales, 2010-15
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- Figure 51: Online sales by grocers, (including VAT), 2010-15
- Figure 52: Online sales by grocers, (including VAT), 2010-15
- Market shares
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- Figure 53: Leading online grocery retailers market shares, 2014
- Figure 54: Leading online grocery retailers market shares, 2010-14
- Coverage and fulfilment
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- Figure 55: Major grocery retailers offering grocery click-and-collect services, 2015
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Space Allocation Summary
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- Summary data and classifications
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- Figure 56: Food, non-food standard classifications, 2015
- Convenience – Comparison goods
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- Figure 57: UK leading food retailers: Convenience comparison overview split, October 2015
- Figure 58: UK leading food retailers: Detailed convenience comparison split, October 2015
- Fresh food focus
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- Figure 59: UK leading food retailers: food and drink categories as a percentage of total space allocated to food and drink, October 2015
- Detailed space allocation data
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- Figure 60: UK leading food retailers: overview percentage linear shelf space split in front of the checkout area by Food and Non-alcoholic drinks, Alcohol, Grocery non-foods, and General merchandise, October 2015
- Figure 61: UK hypermarkets: Estimated space allocations, October 2015
- Figure 62: UK hypermarkets: Estimated space allocations, October 2015 (continued)
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- Figure 63: UK hypermarkets: Estimated space allocations, October 2015 (continued)
- Figure 64: UK hypermarkets: Estimated space allocations, October 2015 (continued)
- Figure 65: UK leading superstores: Estimated space allocations, October 2015
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- Figure 66: UK leading superstores: Estimated space allocations, October 2015 (continued)
- Figure 67: UK leading superstores: Estimated space allocations, October 2015 (continued)
- Figure 68: UK leading superstores: Estimated space allocations, October 2015 (continued)
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- Figure 69: UK smaller stores and hard discounters: Estimated space allocations, October 2015
- Figure 15: UK smaller stores and hard discounters: Estimated space allocations, October 2015 (continued)
- Figure 70: UK smaller stores and hard discounters: Estimated space allocations, October 2015 (continued)
- Figure 71: UK smaller stores and hard discounters: Estimated space allocations, October 2015 (continued)
Retail Product Mix
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- Figure 72: Leading food retailers: Estimated sales mix, 2014
- Figure 73: Leading food retailers: sales as % all retail sales, 2014
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- Figure 74: Sales density by broad product category, 2014
- Figure 75: Major food retailers: Estimated market share of key categories, 2014
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Brand Research – Supermarkets
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- What you need to know
- Brand map
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- Figure 76: Attitudes towards and usage of selected supermarket brands, August 2015
- Key brand metrics
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- Figure 77: Key metrics for selected supermarket brands, August 2015
- Brand attitudes: Established supermarkets defined by wide presence
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- Figure 78: Attitudes, by supermarket brand, August 2015
- Brand personality: M&S Simply Food and Waitrose have exclusive images, while The Co-operative is seen as boring or tired
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- Figure 79: Brand personality – macro image, August 2015
- Aldi, Lidl and Iceland still seen as somewhat basic by many
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- Figure 80: Brand personality – micro image, August 2015
- Brand analysis
- The Big Four remain largely dominant
- Customer service and wide availability likely to influence usage
- Aldi overtakes Morrisons on trust
- Aldi and Lidl continue to build trust
- Both brands cause consumers to redefine what counts as value
- Iceland’s prospects improve
- M&S Simply Food and Waitrose still noted for quality and being expensive
- Differentiation from other supermarkets protects M&S Simply Food and Waitrose image and position
- The Co-operative has an ethical image but also seen in more negative terms than other brands
- Negative perceptions do not appear to influence a drop in usage however
Advertising and Marketing Activity
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- Sector advertising spend up 6.2% in 2014
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- Figure 81: Recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarket and online grocers, 2011-14
- Asda is the biggest spender
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- Figure 82: Recorded above-the-line, online display and direct mail total advertising expenditure by leading UK grocery retailers, 2011-14
- Share of advertising spend
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- Figure 83: Percentage media type split of recorded above-the-line, online display and direct mail total advertising expenditure by UK supermarkets and online grocers, 2011-14
- Figure 84: Percentage of recorded above-the-line, online display and direct mail total advertising expenditure by the UK’s leading grocery retailers, by media type, 2014
- A note on adspend
Aldi
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- What we think
- Aldi Sud still the innovator
- The UK
- Costs
- Online
- Everywhere else
- Company background
- Company performance
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- Figure 85: Aldi: Group financial performance, 2010-14
- Figure 86: Aldi: Outlet data, 2010-14
- Retail offering
Asda Group
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- What we think
- Poor performance
- Cost cutting
- Quality
- The customer point of view
- Black Friday
- Where next
- Company background
- Company performance
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- Figure 87: Asda Group Ltd: Group financial performance, 2010-14
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- Figure 88: Asda Group Ltd: Outlet data, 2010-14
- Retail offering
The Co-operative Food
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- What we think
- Bringing down the price of fresh food
- Local and to-go
- No plans to launch into online grocery
- Large stores strategy
- Meeting demand for little, but often grocery shopping
- Company background
- Company performance
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- Figure 89: The Co-operative Food: Group financial performance, 2010/11-2014/15
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- Figure 90: The Co-operative Food: Outlet data, 2010/11-2014/15
- Retail offering
Iceland Foods
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- What we think
- New store format offers more reasons to visit
- Online operation worth £100m a year in sales
- Frozen food credentials
- Company background
- Company performance
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- Figure 91: Iceland Foods Ltd: Group financial performance, 2010/11-2014/15
- Figure 92: Iceland Foods Ltd: Outlet data, 2010/11-2014/15
- Retail offering
Marks & Spencer (UK food)
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- What we think
- Differentiation through product offering
- Well positioned to capitalise on the demand for little, but often grocery shopping
- More stores carrying the full food product range
- Tapping into wearable technology to make food shopping easier
- Click-and-collect service gives consumers another reason to visit M&S Simply Food stores
- Enhanced in-store food experiences
- Overseas store expansion
- M&S Sparks
- Limited online grocery service, which is sufficient for its positioning
- Company background
- Company performance
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- Figure 93: Marks & Spencer (UK food): Group financial performance, 2010/11-2014/15
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- Figure 94: Marks & Spencer (UK food): Food outlets by format, 2010/11-2014/15
- Figure 95: Marks & Spencer (UK food): Outlet data, 2010/11-2014/15
- Retail offering
Ocado
J. Sainsbury
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- What we think
- Sainsbury’s stands out
- Doing it right
- Netto
- Where next
- Company background
- Company performance
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- Figure 97: J. Sainsbury: Group financial performance, 2010/11-2014/15
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- Figure 98: J. Sainsbury: Outlet data, 2010/11-2014/15
- Retail offering
Schwarz Group (Lidl, Kaufland)
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- What we think
- Cost
- Kaufland
- Expansion
- Where next
- Company background
- Company performance
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- Figure 99: Schwarz Group: Group financial performance, 2010/11-2014/15
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- Figure 100: Schwarz Group: Outlet data, 2010/11-2014/15
- Retail offering
Spar International
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- What we think
- Transit locations
- …airports
- …motorway service areas
- Pushing its health and wellness credentials
- Leading the contactless payment revolution
- Strengthening local ties
- New digital strategy to connect with Millennials
- An award winning brand
- Building on its foodservice offering
- Company background
- Company performance
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- Figure 101: Spar International: Retail sales by country, 2010-14
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- Figure 102: Spar International: Outlets, 2010-14
- Figure 103: Spar International: Retail sales area, 2010-14
- Figure 104: Spar International: Sales per sq m, by country, 2010-14
- Retail offering
Tesco
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- What we think
- Moving on
- Dave Lewis
- Reinvestment in stores
- Balance sheet
- The store portfolio
- International
- Cause for optimism
- Company background
- Company performance
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- Figure 105: Tesco store portfolio, 2014-15
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- Figure 106: Tesco Plc: Group financial performance, 2010/11-2014/15
- Figure 107: Tesco Plc: Outlet data, 2010/11-2014/15
- Retail offering
Waitrose
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- What we think
- Customised loyalty scheme deepening the brand’s value credentials
- Compelling in-store experiences to drive footfall and increase dwell time
- Building its online business
- Customer driven services differentiator
- Adapting to changing consumer shopping habits
- Company background
- Company performance
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- Figure 108: Waitrose Ltd: Group financial performance, 2010/11-2014/15
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- Figure 109: Waitrose Ltd: Outlet data, 2010/11-2014/15
- Retail offering
Wm Morrison Group
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- What we think
- Everyday low price positioning
- Contactless payment, express checkouts, extended opening hours
- Bespoke store format that resonates with local communities
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- Figure 110: Morrisons, Weybridge: Fresh vegetable product display, January 2015
- Online service lacks coverage and delivery options
- New convenience store format
- Geo-location advertising method boosts intent to buy
- Company background
- Company performance
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- Figure 111: Wm Morrison Group: Group financial performance, 2010/11-2014/15
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- Figure 112: Wm Morrison Group: Outlet data, 2010/11-2014/15
- Retail offering
The Consumer - What You Need to Know
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- Tesco dominant
- Main shop vs convenience
- What do people want from their supermarket?
- Key factors by supermarket used
- Satisfaction
- Opening hours
- Pricing
- Non-foods
Where They Shop
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- Who does the shopping
- Main shop vs convenience shop
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- Figure 113: Profile of grocery shoppers by how often they shop, August, 2015
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- Figure 114: Proportions of grocery shoppers who have changed the way they shop in the last year, August 2015
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- Figure 115: Profile of those who have changed their shopping habits, August 2015
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- Figure 116: Profile of those who have changed their shopping habits, August 2015
- Online vs in-store
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- Figure 117: Online and in-store shoppers, August 2015
- Figure 118: Profile of main shop and top-up shoppers by where they shop, August 2015
- Main shop
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- Figure 119: Retailer most money spent in during the last month, August 2015
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- Figure 120: Profile of main shoppers, August 2015
- 2015 vs 2013
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- Figure 121: Retailer most money spent with in last month, August 2013 and August 2015
- Also shop
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- Figure 122: Retailer also used in a typical month, August 2015
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- Figure 123: Profile of shoppers at “also used” shops, August 2015
- How many retailers used?
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- Figure 124: Number of different retailers “also used” in the last month, August 2015
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- Figure 125: Profile of shoppers by the number of other supermarkets used, August 2015
Factors Important in Choosing a Supermarket
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- Figure 126: Factors in choosing where to shop, August 2015
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- Figure 127: Most important factor in choosing where to shop, August 2015
- Who chooses which factors
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- Figure 128: Profile of people valuing key factors, August 2015
- Top rank
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- Figure 129: Profile of those who chose the factor first, August 2015
- Regional differences
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- Figure 130: Regional profile of factor preferences, August 2015
- Prices – a consumer perspective
- Key factors vs where people shop
- Tesco
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- Figure 131: Tesco shoppers: relative importance of Key factors, August 2015
- Sainsbury’s
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- Figure 132: Sainsbury’s shoppers: relative importance of Key factors, August 2015
- Asda
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- Figure 133: Asda shoppers: relative importance of Key factors, August 2015
- Morrisons
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- Figure 134: Morrisons shoppers: relative importance of Key factors, August 2015
- Aldi
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- Figure 135: Aldi shoppers: relative importance of Key factors, August 2015
- Most important factor
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- Figure 136: Most important factor by where people shop most, August 2015
- The CMA report
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Customer Satisfaction with Grocery Shopping
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- Figure 137: Overall net satisfaction with main retailer by criteria, August 2015
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- Figure 138: Key drivers of overall satisfaction with the main grocery retailer used, August 2015
- Figure 139: Overall satisfaction with the main grocery retailer used - key driver output, August 2015
- Quality of fresh foods
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- Figure 140: Satisfaction with fresh food quality by most used retailer, August 2015
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- Figure 141: Satisfaction with ready meal quality by most used retailer, August 2015
- Service
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- Figure 142: Satisfaction with customer service by most used retailer, August 2015
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- Figure 143: Satisfaction with décor and cleanliness by most used retailer, August 2015
- Checkouts
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- Figure 144: Satisfaction with waiting time at checkout by most used retailer, August 2015
- Availability
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- Figure 145: Satisfaction with availability by most used retailer, August 2015
- Satisfaction by retailer
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Attitudes Towards Opening Hours
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- Figure 146: Attitudes towards Sunday opening, August 2015
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- Figure 147: Profile of those who agree/disagree with longer opening hours, August 2015
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- Figure 148: Customers of major supermarkets who would like longer opening hours, August 2015
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Attitudes Towards Grocery Pricing
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- Figure 149: Attitudes towards grocers’ pricing, August 2015
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- Figure 150: Attitudes towards supermarket promotion by where people do their main shop, August 2015
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- Figure 151: Trust in supermarket price matching promises by where people do their main shop, August 2015
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- Figure 152: People thinking that supermarkets raise prices ahead of promotions by where they do their main shop, August 2015
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Grocers and Non-foods
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- Figure 153: Attitudes towards buying non-foods and services from grocery retailers, August 2015
- Non-foods and retailers used
- Impulse buys
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- Figure 154: Impulse buyers by where they do their main shop, August 2015
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- Figure 155: Buyers of non-foods as part of regular shop, August 2015
- Services
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- Figure 156: Users of supermarket financial services by where they do their main shop, August 2015
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Appendix – Data Sources, Abbreviations and Support Information
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- Key driver analysis
- Methodology
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- Figure 157: Overall satisfaction with the main grocery retailer used - key driver output, August 2015
- Figure 158: Satisfaction with the main grocery retailer used, August 2015
- Data sources
- Financial definitions
- VAT
- Forecast methodology
- Abbreviations
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