evolution : knowing : listening : understanding grocery shoppers
SHOPPER TREND REPORT
SHOPPER INSIGHTS | REPORTS | CONSULTANCY | STRATEGY Issue 33 | June 2015
Sainsbury's makes ÂŁ72m fullyear loss on property writedowns Tesco's darkest hour: The inside track on Phil Clarke's final chapter Costco Bulk-buying: Savvy shopping or blind believing? Aldi, Lidl and Poundland are overtaking the 'big four' supermarkets Sainsbury's boss predicts discounters Aldi and Lidl will eat 15% of market share by 2022 The Rise of the Super Top-up
EVOLUTION REPORT
COMING SOON Channel Series 2015 - Convenience This section of our channel series looks into primary shoppers’ behaviours and perceptions of Convenience stores. With the rise of the Top-Up shop in the Food & Grocery market, Convenience stores have experienced an increase in demand. Our in-depth research will examine the shopper habits (spend, frequency of visits, barriers to category purchase), perceptions (of Price, Quality, Value and Range), and drivers towards retailers in this channel. The report also examines how shoppers view Convenience stores when compared to Large Supermarkets.
This report will tell you:
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The channel penetration of Convenience store against other channels
The frequency of visits to Convenience retailers (Tesco Express, Tesco Metro, Sainsbury’s Local, M&S Simply Food, Little Waitrose, M Local and Symbol Groups) Shopping missions that are carried out at Convenience stores The shopper share of Convenience retailers The virtual shopper share of Convenience retailers Shopper’s perceptions of the Price, Quality, Range and Value of Convenience Retailers Which Convenience Retailer is closest to the shoppers home
The main reasons for the shoppers choice of Convenience Store How much a shopper spends at a Convenience Store, by mission What categories are bought from Convenience Stores The categories shoppers would not buy from a convenience store, and their barrier to purchase (out of categories they normally buy) Situations where shoppers would choose to shop at a Convenience Store over a Large Supermarket
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Price perceptions of Convenience Stores compared to a Large Supermarket
For further information contact… t. 0113 394 4670 e. craig.bradley@evolution-insights.com
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GREETINGS Michael Symonds
In this month’s issue...
Research Manager
Welcome to Issue 33 of our Shopper Trend Report There seems to be more good news for shopper!! According to Asda’s latest monthly Income Tracker, ‘household spending power’ is growing at some of the strongest rates recorded in the history of its barometer. Asda reported a significant £17 increase of average UK household discretionary incomes; from £170 to £187 of the same month, year on year. Asda’s findings suggest that Brits can now invest their disposable incomes in what they want as well as what they need, ideal for the approaching summer break period. With further falls in the price of goods and services, essential item inflation has remained negative. This means that the typical household basket is costing less than in 2014. Those planning a ‘staycation’ this summer can also reap the benefits of the deflation of food and nonalcoholic drink prices that have dropped by 2.8% in comparison to the previous year. Further results present the acceleration of consumer earnings by 2.2% since mid 2014 and 386,000 more people are employed than a year ago.
WHAT’S NEW: Evolution’s new website – Evolution Shopper
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FOOD & GROCERY NEWS Sainsbury's makes £72m full-year loss on property write-downs Tesco's darkest hour: The inside track on Phil Clarke's final chapter
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EVOLUTION REPORT: Channel Series – Supermarket 2015
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PRIMARY RESEARCH: Channel Series – Supermarket 2015
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EVOLUTION REPORT CATALOGUE 2015
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EVO COMMENT: Costco Bulk-buying: Savvy Shopping or Blind Believing?
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FOOD & GROCERY NEWS Aldi, Lidl and Poundland are overtaking the 'big four' supermarkets Sainsbury's boss predicts discounters Aldi and Lidl will eat 15% of market share by 2022
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INNOVATION IN RESEARCH: Mobile Phone Surveys… (Geo-fencing)
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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 2015
EVO COMMENT: The Rise of the Super Topup
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WHAT’S NEW: Evolution Consumer Issue 33 | June 2015 |
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NEW WEBSITE
WHAT’S NEW
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 03 | Issue 33 | June 2015
For all your shopper enquiries call us on 0113 394 4670 email on info@evolution-insights.com
‘BIG FOUR’
FOOD & GROCERY NEWS
Sainsbury's makes £72m full-year loss on property write-downs Sainsbury’s has reported its first annual loss in a decade after being forced to cut prices and write down the value of its stores and property assets. The company fell £72m into the red in the year to 14 March, before tax, after £628m of impairment and onerous contract charges relating to sites where it no longer plans to build supermarkets. Total sales declined by 0.7%, excluding fuel, to £23.8bn. The group admitted that sales at its main stores had fallen by over 2% over the year, offset by a rise of more than 16% at its convenience stores, to £2.1bn. Online sales rose over 7% to £1.1bn and sales of non-food including clothing rose 9%. Mike Coupe, chief executive, said: “The UK marketplace is changing faster than at any time in the past 30 years which has impacted our profits, like-for-like sales and market share. However, we are making good progress with our strategy, and our investment in price and quality is showing encouraging early signs of volume and transaction growth.” Source: The Guardian
Tesco's darkest hour: The inside track on Phil Clarke's final chapter When former Tesco chief executive Philip Clarke skipped around his head office singing ‘Here come the walking dead’ after axing another senior executive it was the bizarre moment some insiders began to lose confidence. So what went so wrong with Clarke’s tenure that left Britain’s biggest retailer facing a criminal investigation for fraud while lurching to a £6.4bn loss in its latest accounts? One former insider said that Clarke had a high IQ but felt his EQ – or emotional intelligence – was zero, meaning he struggled to relate to some people and failed to persuade them to buy into his various initiatives. Another said he criticised the retailer rather than recognising he had a good business which he needed to position differently. A source says ‘he was putting huge pressure on people to deliver the numbers’ but the source went on to allege: ‘The phrase that came out was, “I don’t care how you do it, just do it.” Source: This Is Money Issue 33 | June 2015 |
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EVOLUTION REPORT
JUST RELEASED 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.
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Barriers to purchasing 12 proxy categories at a large supermarket.
For further information contact… t. 0113 394 4670 e. craig.bradley@evolution-insights.com
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EVOLUTION REPORT
REPORT SNIPPETS Channel Series 2015 - Supermarket primary shoppers are the most loyal of all the ‘big 4’ retailers with…
SHOPPER
58%
LOYALTY
stating that if money/location was no object they would still shop at Asda.
Drivers in order of importance
SUPERMARKET
DRIVERS
SUPERMARKET
LOCATION
1 in 3
shoppers pass one or more
stores on the way to their primary store
Home
SHOPPING
EXPERIENCE
28% of shoppers think that having a large store format is a disadvantage to making shopping easier
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EVOLUTION SUBSCRIPTION
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 January 2015
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.
Published January 2015
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).
Published March 2015
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.
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Published March 2015
EVOLUTION SUBSCRIPTION
REPORT CATALOGUE 2015 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 Not Published channels to fulfil their shopping needs. This collection will be Phased between May – Nov 2015 comprised of the seven following reports:
Supermarket Online Click & Collect 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 Phased between Aug – Oct 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.
Not Published Due Nov 2015
Issue 33 | June 2015 |
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BLOG
EVO COMMENT
COSTCO BULK-BUYING: SAVVY SHOPPING OR BLIND BELIEVING? I recently went on an expedition to Costco in the name of research; the aim was to get a sense of who shops there, the overall shopping experience, the Price/Value for money and the range of products on offer. On arrival it was not what I expected, I was transported into what felt like the Narnia of shopping, with floor to ceiling stacks of everything from Chocolate Bars to Hot Tubs (my kind of research!). What I didn’t expect was the surprising amount of ‘regular’ families shopping for everyday household items; I thought it would be predominantly shopkeepers, restaurant owners, et al. As I toured the warehouse I decided it would be best to make a few purchases to really get the full experience. I bought: 24 x Flake (guilty pleasure), 10kg box of Persil Washing Powder, 12 x Dolmio Pasta Sauce, 1 car wash kit (bargain) and 3 x Carex Hand Wash (ran out). It was enjoyable browsing the wide range of products that aren’t usually available in stores that I frequent, particularly the foreign products. The issue with foreign products is that I have no idea whether they are good value or not. I felt myself falling into the ‘bulk-buying is cheaper’ trap; everything appeared to be such a bargain, but is it really? Carrying on my research in the café, I compared the price of the Carex I had bought (online), only to find the exact same SKU (in singles) on promotion at two different supermarkets… for less than what I had paid. Bulk buying is a catalyst in unnecessary consumption, despite being a single shopper I buy larger pack sizes as
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they are often better value, why buy half a cucumber when it is not half of the price? However, in real terms is it better value when consumption may take a number of months (opportunity cost) not better value when such vast quantities aren’t needed, manifesting as either waste or over usage (in expandable categories). Buy more, spend more, consume more (Flake anyone?). I cast my mind back to the ‘regular’ families I saw earlier and wondered whether they were truly saving any money. Perhaps they made the same mistake as I, blindly believing that buying in bulk means getting a better deal than buying smaller quantities. On the other hand, these families could have mastered the art of multi-channel shopping, stocking up on nonexpandable categories like Washing Powder, there are big savings to be made on categories like Washing Powder, where the number of laundry washes one might do per week is finite. In summary bigger is not always better. On a supplementary note my advice would be… If you don’t have a car, don’t buy 10kg of Washing Powder. Terri Hampsey Shopper Insight Analyst - Evolution Insights A subject you are interested in? Look out for our NonStandard Grocery Channel report which will be released later this year
DISCOUNTERS
FOOD & GROCERY NEWS
Aldi, Lidl and Poundland are overtaking the 'big four' supermarkets Budget stores are opening at the rate of more than five a week following a cost of living squeeze that has transformed shopping habits. Chains like Aldi, Lidl, Poundland, Iceland, Home Bargains and Farmfoods are fast becoming the biggest names on the high street with growth overtaking the big four supermarkets. And while Tesco, Sainsbury’s, Morrisons are cutting thousands of staff and abandoning opening ‘big box’ stores, their discount rivals are racing to open new outlets. The budget chains have opened 1,367 units over the last five years, which represents growth of 48 per cent and takes the total to 4,217. By contrast the big four - Tesco, Asda, Sainsbury’s and Morrisons - opened 582 full size supermarkets, taking the total to 2,316. The changes have been described by industry leaders as the biggest to hit grocery shopping since the arrival of the chain supermarkets in the 1950s. Source: The Daily Mail
Sainsbury's boss predicts discounters Aldi and Lidl will eat 15% of market share by 2022 Sainsbury’s chief executive, Mike Coupe, has predicted discount supermarkets are set to gobble up nearly 15 per cent of the market by 2022. He is the first boss of a major grocer to tell the City how much damage he believes Lidl and Aldi can inflict on the big four. Tesco, Asda, Morrisons and Sainsbury’s have been losing thousands of customers to the German discounters and the exodus continued as market data revealed a sales drop at all four in the past 12 weeks – for only the fifth time since records began in 1994. Mr Coupe also called on whoever wins the election to tackle business rates reforms, calling the tax unfair to high-street retailers. Sainsbury’s revealed its first annual loss and fall in sales for a decade after a series of write-downs; it also slashed its dividend and warned that price deflation will last at least another year. Source: The Independent
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INNOVATION IN RESEARCH Mobile Phone Surveys… (Geo-fencing) Mobile device usage has reached unprecedented levels in many countries around the world, with some emerging markets even surpassing developed markets in adoption rates. This could change the face of fieldwork, but the possibilities and limitations of mobile must first be understood for it to achieve its potential.
Mobile Capabilities
Geo-fencing/Location-based research Push notifications alerts Rich media responses Barcode/QR scanning for validation White-label app solutions for custom branding Live reporting link
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For further information contact… Michael Symonds t. 0113 394 4672 e. michael.symonds@evolution-insights.com
BLOG
EVO COMMENT The Rise of the Super Top-up
A lot has been made of the rise in smaller top-up shopper missions…indeed we started talking about this years ago. That ‘Smaller and often’ modality which allows shoppers to restrict spend to items that have a definite and known consumption occasion/need. This has allowed shoppers to restrict food waste considerably. Our new research in shopping channels has highlighted something new…that is the rise of the Super Top-up! As specialists in all the grocery shopper missions we understand that the definitions of missions goes well beyond a simple methodology of counting the items in a basket without considering the size of a household…for a large family spending £100 could be just a top-up…£20 for a singleton may well be a main shop…it all depend how it fits within the overall purchasing patterns of that family. A Main/Large Mission comprises items for known and future consumption, with the emphasis on the latter, many of the items will be for stock where no immediate need is known, therefore a Top-up shop is the opposite given the advantages listed previously. So what’s a Super Top-up? Well it won’t surprise you that these fall somewhere in the middle of a Main & Top-up shop in terms of the known and future consumption, but what makes them totally different is the channel used…that is Discounters, in particular Aldi & Lidl. Whilst we are on the subject, calling them discounters seems to refer to them in a negative manner, which I am not in favour of, but for ease, I will continue to refer to them in this way.
Whilst we are on the subject, calling them discounters seems to refer to them in a negative manner, which I am not in favour of, but for ease, I will continue to refer to them in this way. A Super Top-up often starts as a top-up mission (having immediate and know need), but unlike a similar mission in a supermarket, we are seeing evidence of shoppers being more motivated by different products they see in this channel. It feels like more products are innovative and new (often given their continental heritage), and therefore there is a lot more experimenting going on here…and shoppers are loving the products when they try them. This in practise is increasing basket sizes whilst on the same mission…In a Tesco Express the average top-up comes to around £21, whereas in Aldi/Lidl it is £26...now that’s the Super Top-up effect! It also explains why those shoppers from higher demographics love the place…they are often foodies, and seeing something unusual is great for them. Discounter’s mid-sized store formats are perfect for the shopper who wants a quick shopping mission, but with the advantage of a wide range of interesting products (note; this goes well beyond their price advantage), something the Co-operative may want to think about. So the Super Top-up (an augmented Top-up one may say) is putting some of the enjoyment back into grocery shopper…finding that new product, often unknown brand with low risk (and low price) to try on the family makes the shopper…and the consumers very happy. Craig Bradley Managing Director- Evolution Insights
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CONSUMER
WHAT’S NEW 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
In-home filming
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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
SEE HOW WE CAN HELP
CONTACT US 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.
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