specialists in understanding supermarket shoppers
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Shopper Trend Report Shopper Insights | Reports | Consultancy | Strategy
Asda to expand online business and launch click & collect pods
Tesco in crisis
Morrisons chief feels the pressure
Waitrose half-year profits fall
Sports Direct takes put option on Tesco
Bulletin Board Focus Groups
Issue 25 | October 2014
Coming soon On-the-go 2014 The on-the-go mission is defined as food/and or drinks purchased and consumed outside of the home, on the same day, this includes quick service restaurants but excludes items brought from home. The food service sector has seen an increase in consumer spending regarding convenience foods; this is a direct consequence of consumer lifestyles becoming busier in recent years. Retailers are adapting their product offering in a bid to increase market share in the lucrative convenience sector. Not only are the ranges available to shoppers becoming more varied and extensive the number of c-stores is rising too with many retailers increasing their presence on high streets, and other shopper hubs such as train stations. This research will be an extensive study on UK shoppers ranging from attitudes to behaviour to consumption.
This report will:
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Investigate the breakfast, lunch and snacking on-the-go missions looking into the key characteristics of each Provide detailed insight into shopper motivation, behaviour and attitude with regards to each mission Identify shopper circumstances and barriers to purchase such as cost and calories Uncover the importance of factors such as health, price, taste, ‘fill factor’, and quality to different segments
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For further information contact… Dale Henry t. 0113 394 4671 e. dale.henry@evolution-insights.com
Greetings…
Michael Symonds
Research Manager, Evolution Insights
Welcome to Issue 24 of our Shopper Trend Report According to the latest grocery share figures for the 12 weeks to 14 September, grocery market growth slowed to a record low of 0.3% as price inflation fell to zero. Among the ‘big four’ grocers, Asda was the only supermarket to see market share increase (to 17.4%), while sales grew 0.8% on last year. Tesco sales fell 4.5% over the period, with market share down to 28.8%. Morrisons’ market share also remained under pressure, with sales sliding 1.3%. The rate of decline had slowed, following its fresh food promotional voucher scheme which has given them a little optimism. Discounters Aldi and Lidl performed well in the period, with sales increasing 29.1% and 17.7% respectively on last year. In other news Tesco’s problem’s continue; new chief financial officer, Alan Stewart, had to take up his role three months earlier than planned in light of the on-going investigation into the retailer’s profit forecast.
Michael
In this month’s issue... FOOD & GROCERY NEWS
Asda to launch click & collect pods Ocado to trial shopping centre click & collect TfL says 42 London Underground stations to offer click and collect
CASE STUDY: Understand Shopper preferences to soft drink product on-trade
EVOLUTION REPORT: Recently released CSR
PRIMARY RESEARCH: Evolution report CSR - Fairtrade
EVOLUTION REPORT CATALOGUE
FOOD & GROCERY NEWS
2 3 4 5 6
Morrisons chief feels the pressure Waitrose half-year profits fall Sports Direct takes put option on Tesco
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INNOVATION IN RESEARCH: Bulletin Board Focus Groups
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IN FOCUS: Tesco in Crisis
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Please note No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Evolution Insights Ltd. © Evolution Insights Ltd 2014
Issue 24 | October 2014
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CLICK & COLLECT
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Asda to expand online business and launch click & collect pods Asda has unveiled plans to grow its online business by expanding its home shopping and click and collect service over the next four years. The plans include the acquisition of a fully automated ‘click and collect’ pod technology concept that will see orders delivered to a temperature controlled unit from where customers can collect their goods at their convenience. Developed in Holland and a first for the UK, the new pods will be trialled in early 2015. Asda is also planning to increase the number of Click and Collect points from 400 to 600, expand its Drive-Thru Click and Collect points to 200 and expand same day Click and Collect services to 100 new sites to bring the total up to 350. As well as investing in expanding its physical presence, the supermarket is also refining its online offer to make shopping easier for customers. Currently, Asda operates three online stores: Grocery Home Shopping, George.com for fashion and home, and Asda Direct for everything from books to garden furniture to kettles. However, from February 2015 80% of Asda Direct ranges will be merged into Asda’s Grocery Home Shopping and George.com online stores.
Ocado to trial shopping centre click and collect
Ocado is set to begin a 6-month click and collect trial at The Galleria shopping centre in Hatfield. Hosted by commercial property company Land Securities, the scheme allows shoppers to collect online food orders by driving into a car park zone at the shopping centre and having their shopping order loaded into the boot of their car. The initiative marks the first time that Ocado has trialled such a scheme in a shopping centre. Scott Parsons, managing director of retail at Land Securities, said: “This new trial with Ocado demonstrates Land Securities’ dedication to evolving our assets to meet continually changing consumer demands. “The Galleria provides the perfect location to trial the initiative as it has a high-spending customer base, located in the midst of one of the busiest transport networks in the region.” Source: Talking Retail
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Issue 24 | October 2014
Asda president and chief executive Andy Clarke said: “In 2013 we set out a five year strategy to redefine value retailing – with a clear ambition to lead online. We’ve already made significant progress in this area and today’s announcement clearly demonstrates our commitment to step up our game even further. “In what is still a challenging market, I am delighted that we are able to make an investment that will not only step on delivery of our strategy, but also bring new and convenient ways for our customers to shop with us. “We’re also creating an online experience that logically fits with how our customers want to shop and focuses on the areas that our customers love. Ultimately, we want to give more people access to the price, quality and style that we are famous for.” Source: The Retail Bulletin
TfL says 42 London Underground stations to offer click and collect
Transport for London (TfL) has announced that following successful trials of supermarket click and collect services at station car parks, the scheme is now being extended to an additional 17 Tube stations – taking the total number of locations to 42. The initiative means customers can place grocery orders online, before picking them up from the car park of their chosen station. Tesco said it will expand its click and collect services to an additional eight stations, taking its total number to 14, while Ocado will be introducing services to four station car parks on a trial basis from September. Waitrose has said it will launch temperature controlled click and collect lockers in three station car parks from October. Source: Talking Retail
CASE STUDYŠ
Client
FMCG (Soft Drinks)
Brief
Create a better understanding of shopper preferences, competitor set and category/brand drivers with-in soft drinks (on-trade)
Methodologies used‌
Mobile Diary study for a duration of 6 weeks
Mobile Phone Survey
In-pub intercept interviews
Intercept Interviews
Staff & Management Interviews
Face to Face Interviews
Online survey including CBC Conjoint analysis
Online Survey
Issue 24 | October 2014
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Recently released Corporate Social Responsibility 2014 Corporate social responsibility (CSR) is a term used for business activities that address goals that are not purely commercial. Almost all food and grocery manufacturers and retailers incorporate a CSR dimension into their operations. CSR has become an increasingly important part of business for the food and grocery sector. This has resulted in the publication of corporate reports relating to their sustainability agenda. While the term CSR is relatively new, the principles it describes are not. Some of the UK’s largest FMCG brands have had CSR programmes in place for many decades, but do shoppers really care?
This report will tell you:
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The importance for a brand to have a CSR policy from a shoppers’ perspective The importance for brands to support local communities If CSR really affects a shoppers’ purchasing decisions If CSR changes shoppers perceptions of a brand If shoppers are willing to pay more for ethically sourced products
If shoppers are familiar with ethically sourced logos (e.g. Fair-trade) The FMCG brands that are deemed to have a good/poor CSR reputation
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For further information contact… Dale Henry t. 0113 394 4671 e. dale.henry@evolution-insights.com
PRIMARY RESEARCH Š
Corporate Social Responsibility (CSR)
The Fairtrade logo is the most recognisable logo found on Food and grocery products with
81% recognising it
51% of shoppers would pay more for Fairtrade
Issue 24 | October 2014
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REPORT CATALOGUE 2014 Retailer drivers
In-store retailer choice Store & Channel repertoire
Shopper Typologies 2014
Different attitudes amongst key drivers Detailed shopper demographics
Promotions and the Impact on Brand Equity New Product Launches Over Promoted Categories In Relation to Own Label
Multi-channel shopping
Shopper Missions v’s Channels Role of channels Overview of shopper habits cross-channel
Health
Is it important for a shopper to know How influential on decision making
CSR - What impact on a shopper’s perception of brand? Do shoppers recognise any work done by brands What is the impact
Digital Vouchers & Coupons
How new technology is affecting coupons and vouchers Smartphone penetration of UK shoppers and use n relation to digital vouchers Who do shoppers trust with personal information in order to receive offers
Own Label vs. Brands
Proxy categories tested Where do brands fit in the eyes of the shopper
On-the-go Series (Breakfast, Snacking & Lunch) What, when, why, who & how
March 2014
Published March 2014
Published April 2014
Published May 2014
Published May 2014
Published August 2014
Published August 2014
Published
September 2014
Not published Due October 2014
Digital – The Use of Digital Devices
Not published
Retailer Choice - How influenced are shoppers by the knowledge of a retailer’s price positioning
Not published
Online Shopping
Not published
How shoppers use different forms of digital devices for shopping related activities
Driver to store choice | Knowledge of retailer position | Impact of retailer position
What, when, why, who and how
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Published
Issue 24 | October 2014
Due November 2014
Due November 2014
Due December 2014
FOOD & GROCERY NEWS ©
Morrisons chief feels the pressure as IN BRIEF opens firstprofits slide amid grocers’ price war Sainsbury’s ever combined Morrisons’ chief executive, Dalton Philips, has defended his attempts to wrestle shoppers from the clutches of its rivals by slashing prices, even though the grocer’s first-half profits more than halved. Mr Philips admitted recently that he was “under pressure” amid a price war triggered by the German discounters Aldi and Lidl and ratcheted up by the supermarket heavyweights Tesco and Asda. First-half pre-tax profits slumped by 51 per cent to £181m, Morrisons announced – the lowest level since 2006 at the height of its
disastrous integration of Safeway. Sales at supermarkets open longer than a year plunged by 7.4 per cent over the six months and 7.6 per cent in the second quarter as the price war heated up. Mr Philips’ role is under increasing scrutiny, not least from bookmakers who are taking bets on whether he will be fired. “As a chief executive you always feel under pressure to execute a big plan,” he said. “You feel it acutely, but I’m confident in this plan.”
Waitrose half-year profits fall
Sports Direct takes put option on Tesco
Source: The Independent
pharmacy and convenience store
Sainsbury's has opened its first combined convenience shop and pharmacy on a hospital site. Open seven days a week from 7am to 11pm, the store at London’s Guy’s Hospital will offer a pharmacy service as well as a wide range of convenience goods for patients and visitors using the hospital.
Waitrose to open second cookery school
Waitrose is to open a cookery school at its supermarket in Salisbury following the success of its first school in London. The school will be situated inside the city’s Waitrose Food and Home shop from where it will provide a range of cookery courses, chef demonstrations and tastings
Organic market growing as retailers and brands gain confidence
Operating profit at Waitrose dipped 9.4% to £145.2m in the first half of the year to 26 July, as an escalating price war between the multiples intensified over the summer. The retailer said revenue was up 4.2% over the period to close to £3bn, while like-for-like sales were up 1.3%. In a statement, the company said: “The outlook in the grocery sector remains challenging and we expect that to continue to be the case for some time. “While we expect the grocery sector to remain challenging, we anticipate sales at both Waitrose and John Lewis will continue to outperform their respective markets in the second half, reflecting the strength of both brands.” Source: Talking Retail
Sports Direct has entered into a put option on a small stake in troubled supermarket Tesco. In a statement, the sporting goods retailer said the agreement with Goldman Sachs referenced 23 million Tesco shares, representing a 0.28% stake in the supermarket. The option is worth up to £43 million and follows recent news that Tesco had overstated its half year profit forecast by £250 million. Sports Direct said today: “This investment reflects Sports Direct's growing relationship with Tesco and belief in Tesco's long-term future.” Earlier this year, the retailer made a bet on the share price of department store Debenhams in a similar option agreement.
New figures announced by the Soil Association have revealed acceleration in the growth of the UK’s organic grocery market - outperforming non-organic sales in supermarkets
Tesco announces new price for its dairy farmers
Tesco has announced that Tesco Sustainable Dairy Group (TSDG) members will be paid an aboveaverage 32.01ppl for their milk for six months from the 1st November, following an independent cost tracker review by agriculture research consultancy Promar. Tesco said the new price follows four consecutive increases since 2012 and guarantees that TSDG famers receive a price that reflects the cost of production.
Source: The Retail Bulletin
Issue 24 | October 2014
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INNOVATION IN RESEARCH
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Bulletin Board Focus Groups (BBFG) Evolution have developed a highly effective, flexible and convenient qualitative research methodology. What makes this methodology unique from others is that the respondents don’t need to be present at the same time in the same location. Participants can "log-in" at times convenient to them to take part in the discussion. As a result participants often provide more in-depth feedback and well thought out responses. A BBFG is very similar to a message board or chat room. It is comprised of participants who have been recruited according to a screening criteria to participate in a discussion online. Respondents are recruited in the same way as for traditional focus groups. Discussions can be designed to last as long as needed to accomplish the research objectives. However, three days is the most common length. A minimum number of participants for an active group would be 10.
Some major advantages of BBFG’s over
The panel is continuously traditional-type focus groups include: recruited into and micro-managed to provide data. Dueremain to current, Grouprelevant members can anonymous to all but the moderator and client, so they this in-depth information that is collected, tend to candid in their comments all of the above canbe bemore cross-referenced For further Transcripts are available immediately with a range of profiling statistics suchalmost as information in textincome format, costly transcription. SEG, household oravoiding marital status. contact… With participant approval, quotes can be used for referrals and endorsements The panel can also be used for joint completion questionnaires Michael Symonds Instead of the for research time being Whatever divided and targeted recruitment qualitative projects. t. 0113 394 4672 Michael by Symonds the number ofyou participants, your objective is we can help understand each what families are e. michael.symonds@evolution-insights.com t. 0113thinking 336 6000 participant if fully active for over 1.5 hours currently across the UK. e. michael.symonds@evolution-insights.com
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Issue 24 | October 2014
IN FOCUS
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Tesco in crisis: UK managing director among four executives suspended after exposure of accounting scandal Tesco is facing the worst crisis in its 95-year history after an accounting bungle led to Britain’s biggest retailer overstating its expected profits by £250m – prompting the suspension of four senior executives. The shock announcement wiped more than £2bn off the value of the supermarket behemoth on Monday, bringing its share price to an 11-year low as regulators with the power to impose unlimited fines hovered and City analysts called for the chain to be broken up. Tesco’s new chief executive, Dave Lewis, who only joined the company three weeks ago, promised the “fullest and deepest investigation possible” after admitting that the disappearance of almost a quarter of its expected £1.1bn profit for the first half of 2014 was a “serious issue”. As the company resorted to seizing the laptops of its suspended executives, Mr Lewis acknowledged that he could not even be sure that the £250m was the full extent of any income shortfall. “Disappointment would be an understatement,” he said. After three decades of rising profits and pre-eminence among Britain’s food retailers, Tesco has been battling falling sales and a decline in its market share as it is squeezed by the success of more fleet-food competitors such as the discount chains Aldi and Lidl. Last year its revenues fell by 4 per cent and its market share slipped by nearly 1.5 per cent to 28.8 per cent. While its travails disappointed shareholders, including the famously astute Warren Buffett, investors had until today assumed its financial statements – including the latest profit warning issued last month – were at least accurate. One senior City figure said he was “flabbergasted” by the announcement. The retailer said it had suspended the managing director of its UK business, Chris Bush, along with its UK finance director Carl Rogberg and two food directors John Scouler and Matt Simister. The men were put on notice that data on their computers and phones, including emails and messages, will be examined. Mr Lewis promised that “integrity and transparency” would be at the heart of the company’s response to the crisis. But amid suggestions that its problems may be more historically rooted, its internal investigation – which is being carried out by the law firm Freshfields and the accounting giant Deloitte
– will also talk to former executives, including the former boss Phil Clarke, who was ousted in July. The former chief financial officer Laurie McIlwee, who left the company only days ago with a near £1m severance package is also likely to be approached. Tesco shares closed down 11.5 per cent at 203p, wiping £2.1bn off its market capitalisation to £16.5bn. The company’s shares have now halved in value since 2012. Investors and retail experts will be concerned about whether any malpractice may be more widespread among other retailers. The focus of the investigation is likely to be the ecosystem of discounts and promotional deals that is horse traded between Tesco and its suppliers. The supermarket told the City last month that it expected its profits for the first half of 2014 to be £1.1bn, in itself already below investors’ expectations. The loss of £250m from that figure means Tesco’s income is set to fall by nearly 50 per cent compared with its £1.6bn profit for the first half of 2013. Investigators will focus on whether the company had succumbed to the temptation to adjust its figures to soften the picture of falling sales by claiming income such as promotional rebates in the wrong financial period. Source: The Independent
Issue 24 | October 2014
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CONTACT USŠ
We are specialists in understanding supermarket shoppers Evolution Insights delivers off-the-shelf, tailored and bespoke research for manufacturers, retailers and agencies. Our research and analysis helps clients develop targeted shopper marketing initiatives designed to influence shoppers at the point of purchase. As a leading publisher of shopper research, we are ideally placed to offer your business actionable shopper insight.
Get in touch and find out more:
The Round Foundry Media Centre Foundry Street Leeds LS11 5QP
info@evolution-insights.com
0113 394 4670 www.evolution-insights.com
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