specialists in understanding supermarket shoppers
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Shopper Trend Report Shopper Insights | Reports | Consultancy | Strategy
Tesco reveals £6.4bn loss
Poundland reports £1bn sales Which? files supercomplaint
Morrisons to recruit 5,000 shop floor staff Weather inspires ‘al fresco’ dining Morrisons predicts mega asparagus crop
Issue 32 | May 2015
Coming soon Channel Series 2015 - Supermarket This section of our channel series investigates shopper perceptions, attitudes and behaviours in relation to Large Supermarkets. Large Supermarkets are the most frequented of all the channels and continue to dominate the Food & Grocery market; our in-depth research explores a multitude of themes in this area. The Large Supermarket report will cover channel penetration, spend by mission, primary store (including how shoppers define primary store), shopper share, drivers to store, barriers to purchase (by category) and overall perceptions of the different retailers (Quality, Price, Range and Value)
This report will tell you:
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The penetration of shoppers that visit a Large Supermarket regularly, alongside the shopper share of each retailer. Shopper perception of Price and Quality by channel. How much shoppers spend by mission at a Large Supermarket. The frequency of visits carried out by shoppers at a Large Supermarket per month. How shoppers define primary store and which retailer is their primary store based on their own definition. Which retailer shoppers would prefer to shop at if money/location were no object. The drivers to primary store and their importance including: Parking, Location, Range, Value, Quality, Price and Location.
Shopper perception of Value, Quality, Price and Range of each retailer. Which retailers are closest to shoppers’ homes and whether they choose to pass other stores on route to their primary store and why. Barriers to purchasing 12 proxy categories at a large supermarket.
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For further information contact… t. 0113 394 4670 e. craig.bradley@evolution-insights.com
Greetings…
Michael Symonds
Research Manager, Evolution Insights
Welcome to Issue 32 of our Shopper Trend Report
In this month’s issue... WHAT’S NEW: Evolution’s new website – Evolution Shopper
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FOOD & GROCERY NEWS
Tesco reveals £6.4bn loss Poundland reports annual sales of £1bn for the first time Which? files super-complaint
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EVOLUTION REPORT: In-store Decision Making 2015
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David Potts continues to wield the axe at Morriosns. 720 (almost a third) of head office jobs are to go as he tries to “simplify the management structure”. However, he promised to put 5,000 more shop floor staff in stores to better serve it’s customers. He seems to be undoing everything that Dalton Philips implemented at a rapid rate!
PRIMARY RESEARCH: In-store Decision Making 2015
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EVOLUTION REPORT CATALOGUE 2015
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Which? has lodged the first ever super-complaint against the grocery sector after compiling a dossier of “dodgy multi-buys, shrinking products and baffling sales offers” and sending it to the Competition and Markets Authority. The consumer group claims supermarkets are pushing illusory savings and fooling shoppers into choosing products they might not have bought if they knew the full facts.
FOOD & GROCERY NEWS
The big headlines this month were Tesco and the fact that they suffered the biggest loss in high street history and the sixth worst loss for any UK company as the true scale of years of mismanagement was laid bare. What the media failed to report was Tesco’s underlying profit was 1.4bn so let’s not feel too sorry for them! The loss was a result of property write-downs and the size of their supermarket estate which, as we know are not as profitable as they were due to the way we now shop for groceries.
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.
Morrisons to recruit 5,000 new shop floor roles Recent warm weather inspires ‘al fresco’ dining Morrisons predicts bumper asparagus crop
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EVO COMMENT: Online Decision Making
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INNOVATION IN RESEARCH: Eye Tracking & Facial Coding for TV Ads
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WHAT’S NEW: Evolution Consumer
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© Evolution Insights Ltd 2015
Issue 32 | May 2015
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WHAT’S NEW
Just launched…
www.evolution-insights.com
Evolution Insights has just launched a brand new re-vamped website. We are more than just a research agency, we bring consumers and insight to life through a range of innovative research methodologies…
The site will show you… • Our innovative methodologies • A comprehensive lists of our reports • Our consulting credentials • The brands we work with • Client testimonials • The latest shopper news & comment • How you can receive free research
Go on, take a look, we would love to hear your feedback… evolution-insights.com 2
For all your shopper enquiries call us on 0113 394 4670 email on info@evolution-insights.com Issue 32 | May 2015
FOOD & GROCERY NEWS ©
Tesco reveals £6.4bn loss Tesco has reported an annual pre-tax loss of £6.4bn after Britain's biggest retailer suffered a slump in sales and became embroiled in an accounting scandal. The loss reflects a year of turmoil at the FTSE 100 company and is the worst financial performance in its 96-year history, as well as the worst ever recorded by a British retailer. Dave Lewis, chief executive of Tesco, said that it was "clearly a very significant day" for the company and that he was now attempting to rebuild the retailer "piece by piece". Tesco suffered a 3.6pc fall in like-for-like sales in the UK during the year to the end of February as British shoppers turned away from supermarkets and the weekly shop in favour of the discounters Aldi and Lidl and online shopping. The company also became embroiled in a £263m accounting scandal after it emerged that it had overstated the amount of money it was earning from deals with suppliers.
Poundland reports annual sales of £1bn for the first time
Poundland said revenue for the 2015 financial year hit £1bn for the first time, with total sales in the UK and Ireland increasing 11.8% to £1.1bn. Like-for-like sales were up 2.4% for the 12 months to 29 March, with 60 new stores opening during the period. Poundland chief executive Jim McCarthy, said: “After a solid quarter of sales growth, Poundland’s revenue for the 2015 financial year was over £1 billion for the first time. Despite tough trading conditions, Poundland continues to perform well and we served an average of 5.3 million shoppers a week during the quarter..” Source: Talking Retail
The loss is the consequence of Tesco writing down the value of its struggling supermarkets across the UK to reflect the fact they are now generating less in sales and profits. The retailer booked an impairment charge of £4.7bn on the value of its assets, part of a collection of £7bn of one-off charges that dragged it deep into the red. Other charges included £570m on stock, which is linked to how Tesco was recording income from suppliers, the issue that sparked the accounting scandal. The company was also hit by restructuring costs of £416m as it makes thousands of staff redundant and closes shops. The size of the statutory loss is even worse than the City and analysts were expecting. However, the oneoff charges are non-cash and reflect a change in the value of the assets controlled by Tesco, rather than cash it has actually lost. Source: The Telegraph
Which? files supercomplaint over ‘misleading’ supermarket pricing Consumer watchdog Which? has submitted a ‘super-complaint’ with the regulator, calling for action over what it says are confusing and misleading pricing tactics used by the supermarkets. The Competition and Markets Authority (CMA) must respond to the complaint within 90 days. In a statement, Which? said: “We’ve found retailers are confusing consumers with tactics that exaggerate discounts and manipulate shoppers, so we’re using our legal powers to take the issue to the regulator.” “From dodgy multi-buys to baffling sales offers, many retailers are creating the illusion of savings that don’t exist. These tactics manipulate consumer spending by misleading people into choosing products they may not have picked if they knew the full facts.” Source: Talking Retail
Issue 32 | May 2015
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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…
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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
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The framework for understanding the decision making hierarchy
For further information contact… t. 0113 394 4670 e. craig.bradley@evolution-insights.com
PRIMARY RESEARCH Š
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
8%
of shoppers
10%
For further information about this report contact‌
of shoppers cited price as the key decision driver across the categories researched
t. 0113 394 4670 e. craig.bradley@evolutioninsights.com
Issue 31 | April 2015
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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.
Channel Series (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:
Published
Not published Due – Phased between AprilNovember 2015
Online | Click & Collect | Supermarket | Convenience | Discounter | High Street Discounter | Non-Standard Grocery
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
Main shop | Top-up | Meal for Tonight | Breakfast On the go | Lunch On the go | Snacking On the go
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.
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Issue 31 | April 2015
Not published Due November 2015
FOOD & GROCERY NEWS ©
Morrisons to recruit 5,000 new shop floor roles as it cuts head office staff Morrisons has announced that it has begun recruiting 5,000 shop floor staff in its supermarkets as it looks to improve service, increase availability, and open more checkouts. The retailer said it is also looking to simplify its management structure, with a proposed reduction of up to 720 roles at Morrisons head office, where staff numbers have grown 50% since 2008. Morrisons chief executive David Potts said: “We are focusing on the things that matter to our customers. That means having more of our staff in our stores, improving product availability and helping customers at our checkouts. We believe our customers
and our staff will appreciate the improvements. “To support this, we need a simpler, faster and cost-conscious head office and that requires some tough but necessary decisions.” The retailer said staff in roles impacted by redundancy will be offered a role in a Morrisons store, with some redeployed in other areas of the business. The consultation period will last for at least 45 days. Source: Talking Retail
Recent warm weather Morrisons predicts bumper asparagus inspires ‘al fresco’ crop dining
Waitrose said hot weather was giving an early start to alfresco dining this year, with barbecue meats and drinks proving popular. Commenting on sales for the week ending 11 April, Waitrose finance director Tom Athron said: “The warmer weather inspired customers to break out their barbecues, driving sales of easy-to-grill meats. Lamb burgers were up a scorching 510% and veal burgers also saw a spike, up 37%. Speciality and free range sausages also proved popular, up a sizzling 16% and 12% respectively, and pre-packed fish also had a great week, with sales up 10%. “ Source: Talking Retail
Morrisons said Britain could see its best crop of outdoor grown asparagus for nearly a decade, thanks to warm weather and ideal growing conditions. Morrisons asparagus buyer David Bartle said: “Growing conditions look like they are going to be perfect. The good weather will not only affect the amount of asparagus grown but also the quality of the crop. We could have the most exceptional year since 2007.” Source: Talking Retail
NEWS IN BRIEF Poundworld unveils ecommerce website
Poundworld has launched its new e-commerce website Poundworld Plus as it looks to drive growth across Europe. The new site will offer over 4,000 products including household brands such as Colgate, Coca Cola and Johnsons, all at the price of £1. In addition, there will be over 1,000 multi-price deals for over £1 that will be available exclusively to buy online. Items will range from garden furniture to pet food, licensed Minions merchandise to mobile phones as well as big value grocery items.
Subway opens 500th non-traditional store
Sandwich shop chain Subway has reached another milestone as it announced that it now has more than 500 stores open in non-traditional locations in the UK & Ireland. The company is increasingly looking to open stores in locations such as petrol forecourts, convenience stores, hospitals, transport hubs, universities and colleges.
Sainsbury’s halves Nectar point payouts for customers
Sainsbury’s has halved the amount of Nectar points customers receive when paying for their shopping, as changes to its loyalty scheme came into effect over the weekend. Instead of receiving two points for every £1 spent in store, customers will now only get one. Points will also no longer be offered to shoppers who re-use their bags, another move likely to disappoint loyal customers. Issue 32 | May 2015
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EVO COMMENT
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Online Decision Making
WHY I DON’T UNDERSTAND THE WORRY SURROUNDING CAMPYLOBACTER
“Our consulting department have recently created Shopper Decision Trees for both the in-store, and online environments…” Our consulting department have recently created Shopper Decision Trees for both the in-store, and online environments, the outcome of which has highlighted again how much more complicated it is for shoppers try to find the correct product in the online channel. It wasn’t a massive surprise to me given the amount of work we do in the online channel for our clients, but when one sees it written down, one must feel some amount of compassion for the online shopper in their attempt to complete a large shopping mission at a dot com retailer. In my opinion, retailers need to do a lot more to create an experience that is more akin to what shoppers have been brought up to in-store, and that involves mimicking the ‘virtual’ journey around the store to ensure they get everything they require. Our research shows a difference in the use of preshop created lists (whether written, using an app, notes on phone et al), where just 39% say they have a list before undertaking an online shopper trip, compared to 64% when doing a large mission instore. Therefore 61% are using the site itself to remind them what they require, which beyond the use of favourites is currently a tough task, especially given the pre-selection routine required before they are
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Issue 32 | May 2015
exposed to an edited range of products. Another difficulty, is knowing which categories (or aisles instore) they have yet to visit. I believe these can be replicated in some form, but retailers appear to believe that online shopping is different…well yes it is, and that is down to the current designs of the sites. The most difficulty for shoppers though, is understanding the pack sizes of the products on offer (as different sized versions of the same product are scaled back to the same size). We do a lot of work in this area to try and understand how shoppers perceive the different categories, and what characteristic they would want highlighting to ensure the shopper selects the correct SKU. Should it be the number of washes, how many days it will last, how many slices it will cover, number of servings, small, medium, large, weight, size…and so many more. One thing is for sure, the characteristics used in a products description must reflect how shoppers see the categories, and not how the brands see them!
Craig Bradley
Managing Director - Evolution Insights
INNOVATION IN RESEARCH Š
Eye Tracking & Facial Coding for TV Ads
High product, message or brand visibility in emotionally engaging scenes of a TV commercial will boost advertising impact. Both Eye Tracking (attention) and Facial Coding (emotion) are gaining traction. Though immensely valuable separately, combined they could deliver even more powerful insights. A recent online study set out to understand the relationship between brand/product appearance and emotions. Sounds interesting? Take a look at the examples below!
The graph above shows Pantene, Head and Shoulders and Iams have quite good brand visibility, but they appear in parts of the ad which have either low overall emotional engagement or even negative emotional valence. Pampers, on the other hand, is placed in a part of the ad which is positively emotionally engaging, but its visibility is not perfect. Other brands in the ad are both low on visibility and appear in the parts with low or negative emotional valence. Looking solely at the emotional journey of this ad, one can notice several positive emotional peaks – areas with high emotional engagement. By placing the For further brand in those exact areas, brand visibility and information overall impact of the ad could be significantly contact‌ Michael Symonds boosted.
t. 0113 336 6000
e. michael.symonds@evolution-insights.com
Michael Symonds t. 0113 394 4672 e. michael.symonds@evolution-insights.com Issue 32 | May 2015
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WHAT’S NEW
Just launched…
www.evolutionconsumer.com
We are more than just a research agency, we bring consumers and insight to life through a range of innovative research methodologies…
Packaging testing
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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 32 | May 2015
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CONTACT US Š
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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Our series of off-the-shelf publications offer research and insight into to shopper motivation and behaviour
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