Supermarkets: More Than Just Food Retailing - UK - November 2012

INTRODUCTION
Report change
ONS data and definitions
Financial definitions
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Grocers’ retail sales (incl. VAT), 2007-17
Market factors
Companies, brands and innovation
Figure 2: Leading ten grocers’ shares of grocers’ sector sales, 2010 and 2011
Price and competition
The consumer
Figure 3: Usage of the Big Four supermarkets for the main weekly shop, 2008-12
Figure 4: Customer base of main shoppers, by age and socio-economic group, August 2012
Figure 5: Big Four supermarkets, customer profile, 1996, 2006 and 2012
Online
Non-foods
Figure 6: Most frequently bought non-food items bought from a supermarket or grocery store, September 2012
Attitudes to buying non-foods
Figure 7: Attitudes to buying non-foods in the supermarket used for the main shop, September 2012
Services
Figure 8: Services bought or would consider buying from a supermarket, September 2012
Figure 9: Leading food retailers: Major services offered, November 2012
Brands
Figure 10: Attitudes towards and usage of brands in the food retail sector, August 2012
What we think
ISSUES IN THE MARKET
Non-foods – once the driver, now where?
Food – Are C-stores the future?
Problem businesses – what are the lessons?
Price – is it being taken out of the equation?
Where next for food retailers?
TREND APPLICATION
Trend: Home of the Sense
Trend: Carnivore, Herbivore, Locavore
2015 trend: Access Anything, Anywhere
THE MARKET ENVIRONMENT
Key points
Inflation
Figure 11: Consumer prices indices: annual percentage changes, Sep 2011-Sep 2012
Figure 12: Year-on-year change in CPI for food, beverages and tobacco, and year-on-year change in grocers’ sector sales, 2007-11
Figure 13: Consumer prices indices: annual percentage changes, selected categories, Sep 2011-Sep 2012
Figure 14: Annual % change in CPI versus annual % change in average weekly earnings, Sep 2011-Aug/Sep 2012
Consumer confidence
Figure 15: Consumer confidence levels, Nov 2011-Oct 2012
Figure 16: Gross domestic product: Annual % change, Q1 2010-Q2 2012
CONSUMER SPENDING
Key points
Consumer spending on food, beverages, and tobacco
Figure 17: Consumer spending on in-home food, beverages, and tobacco, (inc vat), 2007-12
Consumer spending on non-food FMCGs
Figure 18: Consumer spending on personal care, household, and over-the-counter pharmaceutical products, 2007-12
Total potential grocery market
Consumer spending on general merchandise
Figure 19: Consumer spending on general merchandise categories, 2007-12
SECTOR SIZE AND FORECAST
Key points
Growth lags inflation
Forecasting to 2017
Figure 20: Grocers’ retail sales (incl. VAT), 2007-17
Figure 21: Grocers’ retail sales, at current and constant prices, 2007-17
Technical note
The Mintel forecast
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Virtual airport supermarket
Asda identifies ‘hot’ areas for students
Personalised pricing in-store
In-store scan and shop
Enhancing the in-store experience
Tesco’s prestige beauty halls
Drive-through grocery stores
‘Food deserts’ create an opportunity for innovation
NFC-enabled grocery shop and order wall
Sainsbury’s opens in-hospital pharmacies
That’s entertainment
CHANNELS OF DISTRIBUTION
Key points
Distribution of spending on food, beverages, and tobacco
Figure 22: Distribution of consumer spending on food, beverages, and tobacco by retail channel/outlet type, 2010-11
Figure 23: Distribution of consumer spending on food, beverages, and tobacco by retail channel, 2007-11
SPACE ALLOCATION SUMMARY
Key points
Figure 24: Space allocation of food and non-foods, October 2012
Figure 25: Asda, Tesco space allocation estimates, October 2012
Figure 26: Sainsbury’s, Morrisons, Waitrose, Co-op, Aldi, Lidl, space allocation estimates, October 2012
Figure 27: Asda, Sainsbury, Tesco: Sales area by format, 2012
Figure 28: Major food retailers: Total sales area estimates, 2012
Figure 29: Major food retailers: product mix (inc vat), 2011/12
Figure 30: Major food retailers sales density by broad product area**, 2011/12
Figure 31: Major category market sizes, 2011
Figure 32: Major food retailers, market shares, by category, 2011
THE RETAILERS – FINANCIALS AND OUTLETS
Key points
The Big Four
Some retailers soar
…while others face difficulties
Revenues
Figure 33: Leading 25 grocers, by revenues (excl vat), 2007-11
Figure 34: Leading grocers: CAGR in revenues, 2007-11
Outlet numbers
Figure 35: Leading retailers: Outlet numbers, 2007-11
Sales per outlet
Figure 36: Leading retailers Average annual sales per outlet (excl vat), 2007-11
Figure 37: Leading retailers: CAGR in average annual sales per outlet, 2007-11
Sales area and average store sizes
Figure 38: Selected leading retailers: Total sales area and average store size, 2007-11
Figure 39: Selected leading retailers: CAGR in total sales area, 2007-11
Sales densities
Figure 40: Selected leading retailers: Average annual sales per sq m, 2007-11
Figure 41: Selected leading retailers: CAGR in sales per sq m, 2007-11
Operating profits and margins
Figure 42: Selected leading retailers: Operating profits, 2007-11
Figure 43: Selected leading retailers: operating margins, 2007-11
MARKET SHARES
Key points
In brief: The top ten
Figure 44: Leading ten grocers’ shares of grocers’ sector sales, 2010 and 2011
In detail: The top 20
Figure 45: Leading 20 grocers’ shares of grocers’ sector sales, 2007-11
Technical note: Non-retail revenues
Figure 46: Leading grocers’ estimated percentage of turnover deriving from non-retail revenues, 2007-11
Figure 47: Leading grocers’ revenues, adjusted for estimated non-retail income, (excl. VAT), 2007-11
ONLINE AND SOCIAL MEDIA
Key points
 THE ONLINE MARKET
Online grocery sales
Figure 48: Online grocery sales, 2007-12
Leading online grocers
Figure 49: Leading online grocers’ estimated revenues (excl. VAT) and shares of the online grocery sector, 2010 and 2011
Online general merchandise
Figure 50: Leading grocers’ online general merchandise ranges, major categories, November 2012
Profiling online visitors
Figure 51: Profile of visitors to leading grocery retailers’ websites, by age group, three month average to August 2012
Figure 52: Profile of visitors to leading grocery retailers’ websites, by socio-economic group, three month average to August 2012
Figure 53: Profile of visitors to leading grocery retailers’ websites, by sex, three month average to August 2012
Leading sites by visitor numbers
Figure 54: Leading food retail websites, by total unique visitors, three-month average to August 2012
The consumer: Shopping online by category
Figure 55: UK: What has been bought online in the last 12 months, leading categories, May 2012
The consumer: shopping online by device
Figure 56: UK: Percentage of consumers having shopped online (for any goods) in the last three months, July 2012
 SOCIAL MEDIA
Figure 57: UK: Social media websites visited, April 2012
Figure 58: Ways in which people have made contact with or share thoughts about new food products or brands, April 2012
Figure 59: Reasons for online engagement with food brands, April 2012
Figure 60: Ways in which people have made contact with or share thoughts about new food products or brands, by demographics, April 2012
Social media follower numbers
Figure 61: Leading retailers’ follower numbers on selected social media, October 2012
THE CONSUMER – RETAIL CUSTOMER PROFILE COMPARISON
Key points
Figure 62: Age profile of main customers of leading food retailers, September 2012
Figure 63: Socio-economic profile of main customers of leading food retailers, September 2012
Figure 64: Lifestage profile of main customers of leading food retailers, September 2012
Figure 65: Regional profile of main customers of leading food retailers, September 2012
Figure 66: ACORN  special group profile of main customers of leading food retailers, September 2012
THE CONSUMER – WHO SHOPS WHERE
Key points
Main shop
Figure 67: Retailers used for main weekly shop, August 2012
Figure 68: Usage of the Big Four supermarkets for the main weekly shop, 2018-2012
Customer profile by main shoppers
Figure 69: Customer base of main shoppers, by age and socio-economic group, September 2012
Changes in customer profile, 1996-2012
Figure 70: Big Four Supermarkets, customer profile, 1996, 2006 and 2012
Top-up shopping
Figure 71: Usage of outlets for top-up shopping, September 2012
Profile of top-up customers
Figure 72: Customer profile of Top-up shoppers, September 2012
THE CONSUMER – GROCERY SHOPPING: FREQUENCY, LOCATION AND TRANSPORT
Key points
Frequency
Figure 73: Frequency of buying food, drink and household products, 2004-12
Figure 74: Average number of shopping trips PA, 2004-12
Figure 75: Frequency of buying food, drink and household products, 2004-12
Figure 76: Frequency of buying food, drink and household products, 2004-12
Figure 77: Regular and top-up grocery shopping trips, 2004-12
Mode of transport
Figure 78: Mode of transportation used, 2004-12
Types of outlets used
Figure 79: Type of outlets visited, 2008-12
Figure 80: Type of outlets visited regularly, 2008-12
Figure 81: Type of outlets visited occasionally, 2008-12
Money spent
Figure 82: Average spend on grocery shopping, 2010 and 2012
Figure 83: Money spent on food and drink, and household products in the last 12 months, 2010-12
Figure 84: Money spent on food and drink, and household products in the last 12 months, 2010-12
Figure 85: Money spent on food and drink, and household products in the last 12 months, 2010-12
Key factors in choosing a supermarket
Figure 86: Most important factors in choosing a supermarket, 2012
Figure 87: Important factors while shopping for groceries, 2004-12
Figure 88: Important factors while shopping for groceries, 2004-12
Attitudes to grocery shopping
Figure 89: Attitudes towards shopping, 2004-12
GROCERY BUYING HABITS – RECENT TRENDS
Key points
Figure 90: I look out for more bargains (eg buy one get one free), March-September, 2012
Figure 91: I have switched from branded to cheaper own-label groceries, March-September 2012
Figure 92: I plan my shopping more carefully to avoid food waste, March-September 2012
And September?
THE CONSUMER AND GROCERS’ NON-FOODS
Key points
Figure 93: Non-food items bought from a supermarket or grocery store, September 2012
Who buys what
Figure 94: Profile of purchasers of non-foods, September 2012
Numbers of items bought
Figure 95: Non-food items bought from a supermarket or grocery store, September 2012
Figure 96: Non-food items bought from a supermarket or grocery store, by repertoire of non-food items bought from a supermarket or grocery store, September 2012
Products bought and shops used
Figure 97: Non-food items bought from a supermarket or grocery store, by usage of outlets for most of the households food and grocery shopping, September 2012
CONSUMERS AND SUPERMARKET SERVICES
Key points
Figure 98: Services bought or would consider buying from a supermarket, September 2012
Figure 99: Leading food retailers: Major services offered, November 2012
Figure 100: Principal supermarkets services bought or would be considered, September 2012
Who uses them?
Figure 101: Profile of those who use, or would use, supermarket services, September 2012
Services and retailers
Figure 102: Services bought or would consider buying from a supermarket, by usage of outlets for most of the households food and grocery shopping, September 2012
Figure 103: Services bought or would consider buying from a supermarket, by most popular usage of outlets for top-up shopping, September 2012
Figure 104: Services bought or would consider buying from a supermarket, by next most popular usage of outlets for top-up shopping, September 2012
CONSUMER ATTITUDES TO BUYING NON-FOODS
Key points
Figure 105: Attitudes towards buying non-food items in supermarkets or grocery stores, September 2012
Figure 106: Profile of consumers attitudes, September 2012
Figure 107: Attitudes towards buying non-food items in supermarkets or grocery stores, by usage of outlets for most of the households food and grocery shopping, September 2012
ADVERTISING AND PROMOTION
Key points
Growth in ad spend slows
Figure 108: Main media advertising spend, by leading grocery retailers, 2008-11
Spending relative to turnover
Figure 109: Leading grocers’ advertising spend as % of turnover, 2008-11
Spending by media type
Figure 110: Leading grocers’ main media advertising distribution, by media, 2011
Advertising content
BRAND RESEARCH
Brand map
Figure 111: Attitudes towards and usage of brands in the food retail sector, August 2012
Correspondence analysis
Brand attitudes
Figure 112: Attitudes by food retail brand, August 2012
Brand personality
Figure 113: Food retail brand personality – macro image, August 2012
Figure 114: Food retail brand personality – micro image, August 2012
Brand experience
Figure 115: Food retail brand usage, August 2012
Figure 116: Satisfaction with various food retail brands, August 2012
Figure 117: Consideration of food retail brands, August 2012
Figure 118: Consumer perceptions of current food retail brand performance, August 2012
Figure 119: Food retail brand recommendation – Net Promoter Score, August 2012
Brand index
Figure 120: Food retail brand index, August 2012
Figure 121: Food retail brand index vs. recommendation, August 2012
Target group analysis
Figure 122: Target groups, August 2012
Figure 123: Food retail brand usage, by target groups, August 2012
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists
ALDI
What we think
Background
Company performance
Figure 124: Aldi: Group financial performance, 2007-11
Figure 125: Aldi: Outlet data, 2007-11
Retail offering
ASDA
 WHAT WE THINK
Re-establishing its position at the lower end of the market
Driving home the price message
Building multi-channel capability
Sales growth likely to slow
Non-foods earmarked for further development
Background
Company performance
Figure 127: Asda Group Ltd: Group financial performance, 2007-11
Figure 128: Asda Group Ltd: Outlet data, 2007-11
Retail offering
CO-OPERATIVE GROUP (FOOD)
What we think
Share slipping
Facing increasing c-store competition
Greater emphasis on price
Non-food
Background
Company performance
Figure 130: The Co-operative Food: Group financial performance, 2007/08-2011/12
Figure 131: The Co-operative Food: Outlet data, 2007/08-2011/12
Retail offering
ICELAND FOODS LTD
What we think
The curse of the coupons
Online ahead
Clearly targeted marketing
International opportunities?
Non-food offer lacking
Background
Company performance
Figure 133: Iceland Foods Ltd: Group financial performance, 2007/08-2011/12
Figure 134: Iceland Foods Ltd: Outlet data, 2007/08-2011/12
Retail offering
LIDL/KAUFLAND (SCHWARZ GROUP)
What we think
Can Lidl’s online non-foods offer be exported?
Figure 135: Schwarz Group: Lidl stores per million capita, 2011
Prospects in Germany: Lidl
Prospects for Kaufland
Scaling back hard-discount in France
Outpaced by Aldi in the UK
Background
Company performance
Figure 136: Schwarz Group: Group financial performance, 2007/08-2011/12
Figure 137: Schwarz Group: Outlet data, 2007/08-2011/12
Retail offering
Schwarz Group
Lidl
Kaufland
MARKS & SPENCER (FOOD)
What we think
How high is too high?
Scope for Food On The Move?
Non-food offer
Background
Company performance
Figure 139: Marks & Spencer (food): Group sales performance, 2007/08-2011/12
Figure 140: Marks & Spencer (food): Outlet data, 2007/08-2011/12
Figure 141: Marks & Spencer (food): Food outlets by format, 2007/08-2011/12
Retail offering
OCADO LTD
What we think
Offer is as strong as ever
Losing share where it matters
A long time coming
New fulfilment centre facilitates push into general merchandise
Background
Company performance
Figure 142: Ocado Ltd: Group financial performance, 2006/07-2010/11
Retail offering
SAINSBURY’S
What we think
Gaining market share through the downturn
Driving general merchandise sales and space
And convenience stores
Online initiatives
Quality and enhanced value credentials are working
Background
Company performance
Figure 144: Sainsbury’s supermarkets: Financial performance, 2007/08-2011/12
Figure 145: Sainsbury’s supermarkets: Outlet data, 2007/08-2011/12
Store formats
Figure 146: Sainsbury’s supermarkets: Outlet numbers and space by store size, 2011/12
Retail offering
SPAR EUROPE
What we think
Background
Figure 148: Spar International: Year of entry, by country
Company performance
Figure 149: SPAR International: Retail sales by country, 2007-11
Figure 150: SPAR International: Outlet data, 2007-11
Retail offering
TESCO PLC
What we think
What went wrong
Recovery plans
Marketing
Price
Online
Stores
Non-foods
Banking
Mobile phones
Continental Europe
Reasons to be optimistic
Addendum
Background
Company performance
Figure 151: Tesco Plc: Group financial performance, 2007/08-2011/12
Figure 152: Tesco Plc: Outlet data, 2007/08-2011/12
Store formats
Figure 153: Tesco store portfolio by store size, Feb 2012 and Aug 2012
Retail offering
WAITROSE LTD
What we think
A deserving winner
Convenience and online
Non-food
Overseas expansion
Background
Company performance
Figure 155: Waitrose Ltd: Group financial performance, 2007/8-2011/12
Figure 156: Waitrose Ltd: Outlet data, 2007/08-2011/12
Retail offering
WM MORRISON GROUP
What we think
Bringing new life to stores
Non-food
Tentative steps into e-commerce
C-store push
Background
Company performance
Figure 158: Wm Morrison Group: Group financial performance, 2007/08-2011/12
Figure 159: Wm Morrison Group: Outlet data, 2007/8-2011/12
Retail offering
APPENDIX – CONSUMER – WHO SHOPS WHERE?
Figure 161: Usage of outlets for most of the households food and grocery shopping, by demographics, July/Aug 2012
Figure 162: Most popular usage of outlets for top-up shopping, by demographics, September 2012
Figure 163: Next most popular usage of outlets for top-up shopping, by demographics, September 2012
APPENDIX – CONSUMERS AND SUPERMARKETS SERVICES
Figure 164: Most popular services bought or would consider buying from a supermarket, by demographics, September 2012
Figure 165: Next most popular services bought or would consider buying from a supermarket, by demographics, September 2012
APPENDIX – CONSUMERS AND GROCERS’ NON-FOODS
Figure 166: Most popular non-food items bought from a supermarket or grocery store, by demographics, September 2012
Figure 167: Next most popular non-food items bought from a supermarket or grocery store, by demographics, September 2012
Figure 168: Other non-food items bought from a supermarket or grocery store, by demographics, September 2012
Figure 169: Least popular non-food items bought from a supermarket or grocery store, by demographics, September 2012
APPENDIX – CONSUMER ATTITUDES TO BUYING NON-FOODS
Figure 170: Most popular attitudes towards buying non-food items in supermarkets or grocery stores, by demographics, September 2012
Figure 171: Next most popular attitudes towards buying non-food items in supermarkets or grocery stores, by demographics, September 2012
APPENDIX – THE CONSUMER – GROCERY SHOPPING: FREQUENCY, LOCATION AND TRANSPORT
Figure 172: Frequency of buying food, drink and household products, by demographics, 2012
Figure 173: Frequency of buying food, drink and household products, by demographics, 2008
Figure 174: Mode of transportation used, by demographics, 2012
Figure 175: Mode of transportation used, by demographics, 2008
APPENDIX – FURTHER ANALYSIS
Figure 176: Repertoire of non-food items bought from a supermarket or grocery store, by demographics, September 2012
APPENDIX – BRAND RESEARCH
Figure 177: Brand usage, August 2012
Figure 178: Brand usage, August 2012 (continued)
Figure 179: Brand commitment, August 2012
Figure 180: Brand commitment, August 2012 (continued)
Figure 181: Brand momentum, August 2012
Figure 182: Brand momentum, August 2012 (continued)
Figure 183: Brand diversity, August 2012
Figure 184: Brand diversity, August 2012 (continued)
Figure 185: Brand satisfaction, August 2012
Figure 186: Brand satisfaction, August 2012 (continued)
Figure 187: Brand recommendation, August 2012
Figure 188: Brand recommendation, August 2012 (continued)
Figure 189: Brand attitude, August 2012
Figure 190: Brand attitude, August 2012 (continued)
Figure 191: Brand image – Macro image, August 2012
Figure 192: Brand image – Macro image, August 2012 (continued)
Figure 193: Brand image – Micro Image, August 2012
Figure 194: Brand image – Micro image, August 2012 (continued)
Figure 195: Profile of target groups, by demographics, August 2012
Figure 196: Psychographic segmentation, by target group, August 2012
Figure 197: Brand usage, by target groups, August 2012
Brand index
Figure 198: Brand index, August 2012