How Britain Shops for Food & Grocery 2012 | Verdict Consumer Report
Report description
As shoppers budgets are increasingly restricted and spend declines in other sectors, food & grocery share is up. Market polarisation has seen shoppers trading up to indulge at Waitrose but also down to shop with Aldi, Lidl and Iceland. Price has an important role to play in loyalty dynamics as both inflationary pressures and retailer price comparison campaigns drive up awareness and sensitivity.
- Identify how main players in food & grocery drive loyalty and which stores are favoured by disloyal customers to improve your own shopper penetration
- Understand which strategies are most effective at driving customer loyalty in food & grocery and justify your own business investments
- Data is segmented regionally and by demographic and socio-economic group to enable you to identify which customer groups offer the most opportunities
In the current difficult economic climate shopper share has grown for food & grocery. This occurs naturally as shoppers cut back on discretionary spending in other sectors and food & grocery gains importance and share of wallet. Trading down from eating out and the increased importance of entertaining at home has boosted the food & grocery sector.
Trends towards shopping around to seek out the best bargains in food & grocery have increased year-on-year with shoppers visiting an average of 2.3 stores in addition to their own main store. This is up from 2.1 the year before, driven by the rise in popularity of discounters.Visitors to discounters are rising and more likely to visit other stores.
Price is the single most important factor for food & grocery shoppers in store choice, its loyalty score increasing by 7.8 percentage points to 49.9% over 2008–12. This puts price ahead of convenience and range as the principle driver of loyalty. Ongoing inflation in fuel and commodity costs is driving up food prices, increasing sensitivity.
- How has the profile of the consumers shopping at the main food & grocery players changed over the past year and what has caused this?
- What drives consumers to shop for food & grocery at both you and your competitors? What makes them disloyal?
- How many other stores do your shoppers use for food & grocery and what stores are these? Will these be a threat going forward?
Table of contents
•Verdict view
•Key findings
(Untitled sub-section)
•Main conclusions
Austerity drives up food & grocery share of retail
Mixed fortunes for Big Four as market polarises
More bargain hunters shop around
Inflation and price-focused marketing drive up price-sensitivity
And while Asda, Aldi, Lidl and Iceland impress …
… weaknesses are exposed at the Co-op and Tesco
•Retailer highlights
Loyalty shrinks at Aldi as new shoppers consider whether to commit
Asda's firm stance on price impresses core shoppers
Loyalty to the Co-op remains linked solely to convenience and is lowest in sector
Impressive loyalty boost brings Iceland to sector second as service and quality impressions improve
Austere climate increases appeal of Lidl
At Sainsbury's, more price sensitive shoppers are switching away
Tesco's loyalty remains second lowest in sector
Loyalty growth keeps Waitrose top of ranking
SECTOR SUMMARY
•Share of shoppers
Rises due to focus on essentials
•Penetration of food & grocery shoppers
Less dining out raises penetration of less affluent
•Retailer usage
Discounters among best performers in Top Nine
Main user share by region
•Conversion rates
Conversion down as choice tempts shoppers to stray
•Shopping around
Savvy shoppers hunt for bargains
•Loyalty
Iceland's bumper loyalty drives average up
•Drivers of loyalty/ disloyalty
Price is paramount as marketing and inflation drive sensitivity
ALDI
•Gains new, but not loyal, shoppers
Gains new visitors of all ages and classes
Loyalty shrinks as new shoppers consider whether to commit …
… but remains above average
•Visitors
Recover across all demographics
•Main users
Trading down turns younger and mid-income shoppers into main users
•Conversion rates
Hit record level
•Loyalty
Loyalty slips as new shoppers consider whether to commit
•Competitors
Savvy shoppers seek bargains elsewhere
ASDA
•Price guarantee builds loyalty – but not main user share
Visitor share revitalised as price guarantee tempts budget conscious shoppers
Firm stance on price impresses core shoppers
However, expansion and price matching provide reasons to stray
•Visitors
Tempted back by price guarantee
•Main users
Some shoppers on tight budgets trade down to discounters
•Conversion rates
Return to lower level
•Loyalty
Price guarantee impresses core shoppers
•Competitors
Price matching and expansion of competitors tempts shoppers away
CO-OP
•Convenience drives up shopper share but cannot create loyalty
More young and AB shoppers top-up shop with Co-op
Co-op still depends on older shoppers but spreads reach
Loyalty remains linked solely to convenience and lowest in sector
•Visitors
More young and AB shoppers top up at the Co-op
•Main users
Still depends on older shoppers but reach spreads
•Conversion rates
Wins over more family shoppers
•Loyalty
Loyalty driven up by convenience but other measures weaken
•Competitors
Co-op keeps customers on tight leash – shopping around steady
ICELAND
•Bumper year for loyalty as service and quality improve
Still skewed to young bargain hunter but sociodemographic appeal widens
Impressive loyalty boost brings Iceland to sector second …
… as service and quality impressions improve
Savvy shoppers continue to look elsewhere for bargains
•Visitors
Slight drop as competition for footfall increases
•Main users
Still skewed to young bargain hunter but appeal spreads
•Conversion rates
Converts higher proportion of C1C2s and 25–54s
•Loyalty
Iceland improves to second in sector
•Competitors
Savvy shoppers continue to look elsewhere for bargains
LIDL
•Increasing appeal but challenges lie ahead
Austere climate increases appeal
Increasing loyalty brings Lidl above average
Lidl attracts customers who shop around
Future focus should be on retaining new visitors by impressing them on attributes other than price
•Visitors
Austere climate increases appeal
•Main users
Grows share to become increasing threat
•Conversion rates
Convinces visitors as offer impresses
•Loyalty
Lidl pushes above average
•Competitors
Lidl's proposition designed to pull in customers who shop around more than average
MORRISONS
•Younger more affluent and, importantly, loyal customer emerges
Attracts more shoppers with expansion and refurbishments
Younger and more affluent shoppers tempted instore
Family shoppers up loyalty as they warm to improved offer
Lower conversion as older shoppers adverse to changes instore
Price perception exposed as risk in new strategy
•Visitors
Attracts more shoppers with new store rollout
•Main users
Steady as profile changes
•Conversion rates
Lower conversion reaction of older shoppers to changes instore
•Loyalty
Rises among the more affluent and the young
•Competitors
Tesco and Asda continue to tempt customers away
SAINSBURY'S
•As value hunters stray loyalty increases in remaining core
Younger shoppers trade down as budgets tighten
Rejuvenated loyalty in less affluent shoppers …
… But more price sensitive shoppers are switching away
•Visitors
Disappointing drop in visitors despite expansion
•Main users
Fall in younger shoppers brings down main user share
•Conversion rates
Dip in conversion as younger shoppers prove elusive
•Loyalty
Rejuvenated loyalty in less affluent shoppers
•Competitors
Competitors innovation and expansion provides temptation
TESCO
•More shoppers doesn't translate to sales growth as loyalty remains low
Coverage in every postcode brings Tesco to everyone's doorstep
Growth in main users doesn't salvage like-for-like sales
Price perception falters …
Related market research by sector
Multiple retailers (in Retail), Consumer trends (in Trends)
Related market research by market
United Kingdom (in Europe)
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