Shopper trend report issue 30 march 2015 v2 by Michael Symonds

specialists in understanding supermarket shoppers

©©

Shopper Trend Report Shopper Insights | Reports | Consultancy | Strategy

Morrisons hires David Potts as its new CEO Dave Lewis refuses to announce strategy to get store out of crisis Tesco board loses two female directors

Family spending power rises in January

Asda plans £600m investment as sales fall

Aldi starts selling burgers made from wagyu beef

Issue 30 | March 2015

Coming soon Planning 2015- The use of lists and pre shop knowledge In our Planning 2015 report we will explore the extent that shoppers pre-plan before entering the store. We examine what characteristics shoppers know about the items they plan to buy and if those who use a shopping list will know more or less characteristics about the item they plan to buy than shoppers who don’t use a list. We will also give insight into how likely a shopper is to pick up an unplanned product on impulse from different locations in store.

“

This report will tell you: The use of shopping lists, by mission. Age differences in the type of shopping list used. Why shoppers do not use a shopping list. How much information shoppers know about the items they plan to buy before entering the store.

”

How likely shoppers are to pick up an item on impulse, by mission.

For further information contact… t. 0113 394 4670 e. craig.bradley@evolution-insights.com

Greetings…

Michael Symonds

Research Manager, Evolution Insights

Welcome to Issue 30 of our Shopper Trend Report Three former top Tesco executives are now running Morrisons after the struggling supermarket named David Potts as its new boss with a mandate to focus on its core supermarket business. Is Morrisons going to become the new Tesco? Asda revealed that the speed of its falling sales has increased, damaging its position as one of the only ‘Big Four’ to successfully compete against budget discounters Aldi and Lidl. Asda sales in the 12 weeks to 4 January sales dropped 2.6 per cent. It means sales for the whole year fell one per cent. There was more good news for the economic recovery as family spending power continued to rise in January according to Asda’s income tracker. This is mainly due to supermarket price cuts and lower prices at the pump. In other news we are pleased to announce the release of our ‘Decision Making Report 2015’. This report will help you understand what characteristic of a product shoppers would most like to be highlighted at the fixture to help them decide between products. Which characteristic is the key decision driver for each category (researched) and the framework for understanding the decision making hierarchy

In this month’s issue... EVO COMMENT: 9 things you need to know about Morrisons new CEO David Potts FOOD & GROCERY NEWS

Morrisons hires David Potts as its new CEO Dave Lewis refuses to announce strategy to get store out of crisis Tesco board loses two female directors

EVOLUTION REPORT: In-store Decision Making 2015

PRIMARY RESEARCH: In-store Decision Making 2015

EVOLUTION REPORT CATALOGUE 2015

FOOD & GROCERY NEWS

Family spending power rises in January Asda plans £600m investment as sales fall Aldi starts selling burgers made from wagyu beef

EVO COMMENT: Why I don’t understand the worry surrounding campylobacter 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.

INNOVATION IN RESEARCH: Online Packaging Testing

NEW IN 2015: Evolution Consumer

Issue 30 | March 2015

EVO COMMENT

9 things you need to know about Morrisons new CEO David Potts Here are 9 things you need to know about him: 1. Potts, 57, is an ex-director of Tesco. In fact, he began his career with Tesco in 1973 as a shelf stacker, became a store manager, and then regional director. He then went on to join Tesco’s board to become retail director in the UK and chief executive of its Irish businesses before he became chief executive of Tesco’s Asian business in 2010. 2. Potts left Tesco in 2011 after losing out to Philip Clarke as successor to the retail giant's long-time boss Sir Terry Leahy. 3. He then acted as a retail expert to several international advisory and private equity businesses. 4. In 2012, he was appointed a CBE for his services to employment, skills and apprenticeships in retail. 5. He has more than 40 years experience in grocery retailing. 6. Potts will join Morrisons on 16 March. 7. Potts’ salary will be £850,000 per annum, the same as his predecessor. 8. The arrival of Potts, means that Morrisons three most senior executives are former Tesco stalwarts. Higginson (Chairman), Strain (CFO) 9. Andrew Higginson, chairman of Morrisons said Potts is one of the best retail specialists in the industry. “I am delighted to welcome David as our new CEO. David is the best retailer I have worked with in 25 years in the industry. Having worked alongside him for 15 years, I know he will bring to Morrisons a focus on the customer, a track record of delivery, flair, talent, and immense energy to his new role. He will lead our colleagues in the business from the front, and with distinction.” Andrew Higginson – Morrisons Chairman

Issue 30 | March 2015

FOOD & GROCERY NEWS ©

Morrisons hires David Potts as its new CEO Morrisons has appointed former Tesco director David Potts as its new chief executive. Potts will succeed Dalton Philips who stepped down in February after five years at the helm. Due to join Morrisons on 16 March, Potts has more than 40 years' experience in grocery retailing. He began his career with Tesco in 1973 and rose to become retail director in the UK, chief executive of its Irish businesses, and finally chief executive of its Asian business. Since leaving Tesco in 2011, he has acted as a retail expert to several international advisory and private equity businesses. In a statement, Morrisons said the appointment was the result of selection process that took place both in the UK and overseas. Andrew Higginson, chairman of Morrisons, said: "David is the best retailer I have worked with in 25 years in the industry. Having worked alongside him for 15 years, I know he will bring to Morrisons a focus on the customer, a track record of delivery,

Dave Lewis refuses to announce strategy to get store out of crisis Tesco's shares plunged again recently after its new boss refused to reveal how he would tackle the biggest crisis in its 95-year history. The supermarket giant has just revealed half-year profits slumped by 91.9 percent and its £263million accounting scandal was even worse than predicted. The news triggered another dramatic slump in Tesco shares, which closed down 12p at £1.71, and they have continued to dive-bomb today. This morning they were available for £1.65 but a year ago they were worth £3.70, meaning Tesco has had £4billion wiped off its stock market value in just 12 months. Millions of customers have switched to budget rivals like Aldi and Lidl or high-end Waitrose and Marks and Spencer because Tesco has failed to deliver on price, service or quality, But CEO Dave Lewis refused to be drawn on what he would do to win back shoppers. He said: 'Everybody's been saying to me, 'Dave, when are you going to reveal your strategy – when is there going to be an announcement about what you're going to do?' And I won't be doing that because strategies are constantly evolving.” Source: The Daily Mail

flair, talent, and immense energy to his new role. He will lead our colleagues in the business from the front, and with distinction.” "David's skills are complementary to those of our excellent CFO, Trevor Strain, and I believe we have the makings of a good team. I would like to thank Trevor for his support over the last few weeks." Potts added: "Customers and Morrisons are a great combination to serve. This is a great British business with real potential and it is an honour to have been selected." Source: The Retail Bulletin

Tesco board loses two female directors Tesco's board is to undergo another overhaul after Britain's biggest retailers announced Jacqueline Tammenoms Bakker and Liv Garfield will stand down as non-executive directors. The departure of Ms Tammenoms Bakker and Ms Garfield means that Tesco will be left with just one woman on its board, Deanna Oppenheimer. The latest changes to the board come after a period of unprecedented changed for Tesco's management team in the last six months. Dave Lewis has arrived as chief executive and Alan Stewart as finance director, while Sir Richard Broadbent is being replaced as chairman by John Allan. In addition, Mikael Ohlsson, the former boss of Ikea, and Richard Cousins, the chief executive of Compass, have been appointed as new non-executive directors. Ms Tammenoms Bakker has told the board she wants to retire from her position on February 28 after six years on the board, while Ms Garfield wants to focus on her work as chief executive of Severn Trent. Sir Richard said: "Tesco would like to put on record its appreciation for the dedicated and unstinting contribution of all its directors during a time of unprecedented challenge." Source: The Telegraph

Issue 30 | March 2015

Recently released In-store Decision Making 2015

The Decision Making 2015 report will provide a detailed look into the Shopper Decision Hierarchy, i.e. how shoppers make decisions when confronted with a number of products in-store. We will describe the types of planning that Shoppers will do prior to the shop, and how each of them will influence their decision making in-store – from being faced with a category selection, all the way down to the selection of a single product. Of course, the order of the hierarchy is not the same for every shopper in each category, but we have ascertained the most typical SDH in 11 different categories (Inc. Cereal, Crisps and yogurts). Beyond this, we explore Aisle Fixture Highlighting. Decision making can be made simpler for the shopper in a number of ways. One of these is by highlighting a particular characteristic of one item on the shelf, based on what shoppers find the most important for that category. The characteristics that can be highlighted at the category fixture are the Cheapest item, the Healthiest item, Shoppers Choice (best reviews/voted the favourite etc.), the Best Selling item or the item with the Biggest Discount. For each of the 11 categories we find out which of the characteristics shoppers’ would like to see highlighted in order to help them make a decision on which item to buy.

This report will help you understand…

“

What characteristic of a product shoppers would most like to be highlighted at the fixture to help them decide between products Which characteristic is the key decision driver for each category researched

”

The framework for understanding the decision making hierarchy

For further information contact… t. 0113 394 4670 e. craig.bradley@evolution-insights.com

PRIMARY RESEARCH ÂŠ

In-store Decision Making 2015

Brand was cited as the key decision driver for of shoppers think that it is important to collect loyalty points/rewards at their primary store

was cited as the key decision driver by QUALITY

20%

of shoppers

PRICE

41% of shoppers

was cited as the key decision driver across

21%

of shoppers

was cited as the key decision driver by HEALTH

of shoppers

10%

For further information about this report contactâ&#x20AC;Ś

of shoppers cited price as the key decision driver across the categories researched

t. 0113 394 4670 e. craig.bradley@evolutioninsights.com

Issue 30 | March 2015

REPORT CATALOGUE 2015 Health & Product Information

Explores shoppers’ attitudes to health and healthy eating, nutrition labels and how healthy shoppers are in their own opinion. We will also provide an overview of the drivers associated with buying healthy products

Published

Loyalty Cards & Price Matching

This is a new report that will look into the main retailers offering of loyalty cards in terms of what they offer and how they work, who used them and if they are redeemed. Brand match is a concept that has been taken up by most of the large retailers, so we will look at how individual retailers define their brand match, what they offer in return, and what shoppers think of it. We will also see how many people are using vouchers in Food & Grocery.

Published

In-store Decision Making 2015

The Decision Making 2015 report will provide a detailed look into the Shopper Decision Hierarchy, i.e. how shoppers make decisions when confronted with a number of products instore. We will describe the types of planning that Shoppers will do prior to the shop, and how each of them will influence their decision making in-store – from being faced with a category selection, all the way down to the selection of a single product. Of course, the order of the hierarchy is not the same for every shopper in each category, but we have ascertained the most typical SDH in 11 different categories (Inc. Cereal, Crisps and yogurts).

Published

Planning 2015- The use of lists and pre shop knowledge In our Planning 2015 report we will explore the extent that shoppers pre-plan before entering the store. We examine what characteristics shoppers know about the items they plan to buy and if those who use a shopping list will know more or less characteristics about the item they plan to buy than shoppers who don’t use a list. We will also give insight into how likely a shopper is to pick up an unplanned product on impulse from different locations in store.

Channels (7 Individual Reports)

These reports will give a holistic view on where shoppers go, how frequently and most importantly why they choose the different channels to fulfil their shopping needs. This collection will be comprised of the seven following reports:

Not published Due March 2015

Not published Due – Phased between AprilNovember 2015

Shopper Missions (6 Individual Report)

These reports takes an in-depth look at Shopper Missions and examines shoppers’ behaviour across all missions in relation to frequency, patterns, channel, planning, spend and more. The Mission reports are made up of four separate reports, of which one will be split into three occasions:

Not published Due – Phased between AugustOctober 2015

The Use of Digital Devices for Food & Grocery Shopping

The Digital Shopping report looks at how these technologies are being adopted by shoppers. Specifically, we will look at technology penetration and usage, apps, contactless payment and social media – all in relation to the Food & Grocery sector.

Issue 30 | March 2015

Not published Due November 2015

FOOD & GROCERY NEWS ©

Family spending power rises in January According to the latest Asda Income Tracker for January, discretionary incomes – the income left after taxes and essentials like rent, utilities and bills have been deducted – increased £16 on the same period the previous year. Asda said that average family spending power has now risen year-on-year for sixteen months, the most sustained recovery since the Bank of England sharply cut the base rate in 2009. The data showed that the average UK household had £185 a week of discretionary income in January, while the cost of food and drink was down 2.5% on the previous

Asda plans £600m investment as sales fall

Asda has announced plans to invest £600m in “expanding and improving the Asda store estate” as the retailer posted a 1% decline in like-for-like sales for the year to 31 December 2014. Asda president and chief executive Andy Clarke warned that the retail market remained “in one of its most challenging and changeable periods in history” as sales also fell 2.6% in the 12-week period to 4 January, a quarter when the retail market as a whole slowed significantly. Commenting on Asda’s performance during the year, Clarke said: “2014 saw an acceleration in the structural shift in the market and whilst we saw it brewing and put the right plan in place to address it – delivering solid wins for our business and keeping the ship steady in a turbulent market, the pace and scale of change has exceeded all expectations.” Source: Retail Bulletin

year. Commenting on the figures, Sam Alderson, economist at Cebr said: “With such strong increases in household spending power, it is perhaps unsurprising that retailers are beginning to report better than expected sales during the first few weeks of this year.” “With wages rising and inflation likely to remain subdued for much of the year, households are likely to provide a key driver of growth for the UK economy in 2015.” Source: Talking Retail

Aldi starts selling burgers made from wagyu beef Aldi is to offer a limited stock of Wagyu burgers made with beef imported from New Zealand as it steps up its chase for middle and high income shoppers. Normally, luxury restaurants, stores and gourmet butchers sell the beef for the equivalent of an eye-watering £100 per kilo – so putting it out of reach for most families. However, Aldi is bringing the beef, which originated with pampered cattle in Japan, to the masses. Last year the company sold Wagyu sirloin and rib-eye steaks at £6.99 each, which resulted in something of a stampede among the BMW-driving classes. It believes the burgers will be similarly successful. Wagyu beef stands out from other meat because of its distinctive marbling with fat, which melts into the meat during cooking to produce a fabulous taste and moist texture. The cattle were initially introduced to Japan as a beast of burden to help cultivate rice during the 2nd century. Beer was fed to the animals during the hot summers to stimulate appetite, while massaging was used to prevent muscles cramping on small farms in Japan where the animals did not have sufficient room to move around.

IN BRIEF Waitrose announces new Fairtrade Foundation partnership

Waitrose has announced a new partnership with the Fairtrade Foundation in the run-up to the annual Fairtrade Fortnight campaign. The partnership, the first of its kind between a retail business and the Fairtrade Foundation, will see Fairtrade and Waitrose share best practice, experiences and a joint goal to build sustainable supply chain models.

M&S to close five China stores

M&S set out details of its plans, first outlined last year, which will see 60 jobs cut and the total number of sites in China fall from 15 to 10. But the retailer aims to return to 15 stores over time starting with a "firm intent" to enter key cities such as Beijing and Guangzhou from the 2015/16 financial year which starts next month.

Homeware stores tycoon ‘takes stake in Morrisons’

THE Yorkshire-born founder of Dunelm homeware stores has reportedly taken a stake in Bradford-based supermarket chain Morrisons. According to The Sunday Times, Bill Adderley has bought about 2m shares in Morrisons, which last week announced that David Potts will become its next chief executive. Mr Potts, 57, has more than 40 years’ experience in grocery retailing after beginning his career stacking shelves at Tesco in 1973. Mr Adderley, told The Sunday Times: “My belief is that

shopkeepers should run shops.”

Source: Daily Mail

Issue 30 | March 2015

EVO COMMENT

“Campylobacter has always been an issue with raw chicken. The virus is the most common cause of food poisoning, and has caused approximately 100 deaths.” The FSA have released a name and shame report to which supermarkets are the worst for the levels of this virus found in their raw chickens. I found it really bad that all big supermarkets had a higher proportion of chickens containing campylobacter than they should have, Asda scoring the worst with 78%! But really will this stop me buying and eating chicken? I understand how this is an issue as levels of campylobacter are much higher than what they should be in chickens, but how much is this really a problem? If the chicken is cooked properly and thoroughly then the virus is eliminated and the chicken is okay. So it wouldn’t matter if my chicken is or is not contaminated with campylobacter, once cooked thoroughly a chicken is not contaminated! Also everyone is fully aware that surfaces, utensils, cooking equipment etc. that comes into contact with raw chicken needs to be cleaned to avoid the risk of illness. So these two main factors that spread the illness are well known, but still it makes 280,000 people ill annually. Whether it is down to the campylobacter levels, undercooked chicken or

unhygienic surfaces we cannot be sure. So there is clearly a problem, which following the name and shame supermarkets have realised. They are joining together in an industry wide solution to try to reduce the amount of contaminated chickens. Although so many people fall ill to campylobacter I still think that it is easily avoided. Now supermarkets have released chicken products to reduce the risk, such as ready-made chicken and some supermarkets offer cook in the bag chicken, you never have to handle the raw chicken! I cannot help but think if everyone cooked the chicken properly and cleaned up thoroughly then we would not even bat an eyelid over campylobacter. But unfortunately this is not the case. Personally for me, following the FSA report I will still happily go to my local supermarket and continue to buy chicken. I do agree that it is beneficial to try lower the amount of chickens contaminated; it can’t really do any harm. But while I have the power to prevent myself getting ill from campylobacter, by cooking my chicken properly and actually cleaning up after it, I will not worry about the high levels of contaminated chickens. Anna Kajda – Shopper Insight Analyst

Issue 30 | March 2015

INNOVATION IN RESEARCH ÂŠ

Online Packaging Testing Evolution have developed a highly effective, flexible and convenient quantitative research methodology with an award winning market research technology provider

What makes this methodology unique from others is that we can test packaging concepts in large numbers.

Our innovative online tool allows respondents to view your products in the same way as an in-store environment. It shows images of reallife shelves in supermarkets where we can add in images of the products you want to test.

We can mock up shelves to your requirements to identify which packaging stands out the most, products a shopper would choose within your category based on packaging, how much they would pay for your product/s and how easily shoppers can find your SKU/s when merchandised with competitor products in your category.

For further information contactâ&#x20AC;Ś Michael Symonds t. 0113 394 4672 Michael Symonds e. michael.symonds@evolution-insights.com

t. 0113 336 6000

e. michael.symonds@evolution-insights.com

Issue 30 | March 2015

NEW IN 2015

Just launchedâ&#x20AC;Ś

www.evolutionconsumer.com

We are more than just a research agency, we bring consumers and insight to life through a range of innovative research methodologiesâ&#x20AC;Ś

Packaging testing

In-home filming

Online communities

V-logs

Remote eye tracking

Bulletin board focus groups

For all your consumer enquiries call us on 0113 394 4670 email on info@evolutionconsumer.com Issue 30 | March 2015

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

Shopper Insights

Our series of off-the-shelf publications offer research and insight into to shopper motivation and behaviour

Consulting

As publishers , we are able to draw upon a wealth of existing proprietary data for bespoke consulting projects