“We are all shoppers who want to reduce the time we spend shopping,” observed Edward and the face of retail has changed with the growth of the discount stores. In the UK, Aldi has grown at 30% year on year and Lidl at 20% year – and they are now talking about quality not just low prices.
In the big supermarkets, such as Tesco and Sainsbury’s, we are seeing growth in food service with hot foods and the deli aisle growing so fast that they are now centrally situated. Research has shown that many customers entering the store do not know what they are having for dinner. There is currently a trial in the city of a Tesco store doing take away food.
Some years ago, M&S invented the concept of chilled convenience food and this now comprises 40% of their sales. The discounters are currently not doing this, but I guess it won’t be long. What we are catering for, more and more is the 45 minute ‘heat and eat’ solution with meal occasions the trigger for choice.
The frozen market is big in the US and Germany but chilled is larger in the UK. We know that stores such as Iceland and Farm Foods are mainly used by those on a lower income With greatest growth in ‘frozen’ in times of economic austerity but that said, a frozen meal is not a ready meal and time is ever more critical in today’s time pressed society.
At the lower end, we see less availability of key brands and more own label while there is a noisier environment and more happening around gourmet brands. Appropriate format is key so we stock our stores with products tailored to the customer and based on what they value.
As Edward concluded: “There is no doubt that the repertoire of shoppers is going up with many people now doing their main shop in the discount stores with just 1300 to 1400 lines, then completing their shopping for the more luxury items, in the big four.
“We must be aware of online shopping – it is currently only 6% of the UK market who shop online – but this is growing at a substantial 20% a year.”
In the Q and A that followed, Peter Wennstrom of the Healthy Marketing Team asked if retailers are losing out to brand stores such as the Magnum cafe from Unilever and Nespresso stores.
Edward responded: “It’s an expensive exercise to make the shopper come to you. We call it the ‘goats cheese effect’, meaning that not everyone may like it but stocking new and slightly unusual lines brings in the customers. What we have to do is deliver better value to the shopper by enhancing the shopping experience. Take tomatoes for instance, there are now more types available than ever before and now in the upmarket stores you can even buy a selection box of 20 different types. Sampling is a big seller and people are also influenced by what is available in more affluent stores such as WholeFoods -– look at the evolution of artisan loaves over the last few years.
“We are also often seduced by technology, rather than the service it provides, take Nike in concept stores and Nespresso capsules – these are big fashion trends.
“We need to watch out in the grocery arena for companies such as Amazon. Currently they are losing out because of their delivery charges. But they are moving fast. Take the Amazon Dash for instance. This is a device like a pocket pen which can read a barcode or interpret speech.
“However, if time is critical then online shopping is not always quicker. Try putting in the search term ‘chocolate’ and you could be there for over 10 days on the internet finding the one you want. Similarly, in one of the larger stores, stocking around 40,000 items, you could be in there ten days if you read every label.
“So stocking products tailored to your audience and taste testing is important – but what many stores are aiming for now is to have a relationship. It’s the feel good factor in terms of service and not one the discounters have just yet.”
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