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Shopper Update

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Shopper Update Shopper Update Inspired by February/2010 Food Drug Mass Shopping Incidence: Who’s Winning, Who’s Losing Point of View During the recession, shoppers reduced the number of retailers shopped and shifted allegiances in search of deals and value. Winning channels—those exhibiting an increase in shopping incidence in 2009, according to Retail Forward’s ShopperScape™— include supermarkets, warehouse clubs and dollar stores/small-format value retailers. Supermarkets and clubs are positioned to retain shoppers and build traffi c as the economy improves. Dollar stores will be challenged to sustain their momentum. Mass channel retailers (e.g., supercenters and discount department stores) have comparable shopper shares vis-à-vis a year ago. Going forward, expect mass channel players to sustain traffi c and share as a result of the new frugal consumer mindset. The convenience store and drug store channels are losing shoppers—evidence that these two retail sectors are struggling to fi nd a USP (unique selling proposition) aside from convenient locations. During tough economic times, shoppers are willing to trade convenience for better deals and lower prices. (Figures 1–2) Figure 1 2009 Shopping Incidence—Food/Drug/Mass Formats MonthlyMonthly PptPpt ChangeChange ShoppersShoppers 20052005–0909 20082008–0909 Supermarkets1 50%50% 26%26% 75% +4.3 +2.1 Convenience stores 44%44% 28%28% 72% -5.4 -1.0 Drug stores 21%21% 35%35% 55% -2.1 -1.6 Supercenters 30%30% 25%25% 55% +7.7 +0.1 Discount department stores 17%17% 29%29% 46% -5.7 -0.2 Dollar stores/small-format value retailers2 15%15% 27%27% 41% +2.9 +1.3 Shop weekly Shop 1–3 times a month Warehouse clubs 9%9% 22%22% 31% +0.9 +2.0 NOTE: Percentages may not add due to rounding 1 Includes conventional supermarkets, extreme value/price-impact supermarkets, health/natural supermarkets and specialty food stores/neighborhood specialty markets 2Includes dollar stores (e.g., Dollar General and Family Dollar), one-price stores (e.g., Dollar Tree) and closeout/liquidators (e.g., Big Lots) Source: Retail Forward ShopperScape™, October 2009 Shopping Incidence: Who’s Winning, Who’s Losing, February 2010 1 / Author Sandra J. Skrovan 614.355.4014 [email protected] Sandra J. Skrovan is a Senior Vice President and Manager of the Food/Drug/Mass, Target and Walmart WorldTM programs of the Retail Forward Intelligence System™. Ms. Skrovan specializes in industry and competitor research and analysis, market opportunity analysis, and channel strategies. She graduated Summa Cum Laude with a bachelor’s degree in marketing and an MBA from Kent State University. / Program Director Sandra J. Skrovan 614.355.4014 [email protected] / Director, Retail Forward Intelligence System™ Mary Brett Whitfi eld 614.355.4010 marybrett.whitfi [email protected] / Production Associate Lisa A. Weiderman About Kantar Retail Kantar Retail Cannondale Associates, Glendinning Management Consultants, MVI and Two Easton Oval Retail Forward combine to create Kantar Retail, the world’s leading retail Suite 500 insights and consulting business. Kantar Retail (www.kantarretail.com) Columbus, OH 43219 works with leading retailers and branded manufacturers to transform the USA purchase behavior of consumers, shoppers and retailers. The company 1.614.355.4000 solves client issues from strategic to tactical and provides organizations with the skills and capabilities to act. Kantar Retail offers clients better internal alignment and project effi ciency, from insight through strategy to activation, 10th Floor and across marketing through category to sales. Kantar Retail has nearly 245 First Street 400 employees and offi ces in 15 markets around the globe. The company is Cambridge, MA 02142 headquartered in London and is part of the Kantar Group of WPP. USA 1.617.588.4100 About Retail Forward ShopperScape™ … The Retail Forward ShopperScape™ database is a unique source of 6 More London Place information about shopping behavior based on a monthly survey of 4,000 Tooley Street nationally representative households. The extensive survey measures a wide London, England range of shopping behaviors and attitudes. Survey respondents are the self- designated primary shopper for their households. Surveys are conducted SE12QY online using the TNS 6th dimension access panel. For details on how to UK access the complete database and other ShopperScape™ reports available, +44.207.031.0251 contact Katherine Clarke, Vice President Marketing, at (614) 355-4009 or [email protected]. © 2010 Kantar Retail. All rights reserved. COPYRIGHT NOTICE: No part of this publication may be reproduced in any form by photostat, microfi lm, xerography, or any other information retrieval system, electronic or mechanical, without the written permission of the copyright owner. 2 Shopping Incidence: Who’s Winning, Who’s Losing, February 2010 Figure 2 Shopping Incidence Trends—Food/Drug/Mass Formats PPptpt ChangeChange Weekly Shoppers 20052005–0909 20082008–0909 44.2% 38.0% Supermarkets1 51.5% +5.3 +0.9 48.6% 49.5% 51.5% 48.0% Convenience stores 49.7% -7.4 -3.0 47.1% 44.1% 25.8% 25.4% Supercenters 30.1% +4.4 +0.4 29.8% 30.2% 20.8% 20.1% Drug stores 23.8% 21.2% -0.2 -0.6 20.6% 18.4% Discount department 16.3% stores 18.9% -1.8 +0.2 16.4% 16.6% 14.3% Dollar stores/small-format 13.1% 2005 value retailers2 15.9% 14.4% 2006 +0.5 +0.4 14.8% 2007 7.2% 7.3% 2008 Warehouse clubs 8.8% +2.0 +1.1 8.1% 2009 9.2% MonthlyShoppers3 71.1% 64.1% Supermarkets1 76.9% +4.3 +2.1 73.3% 75.4% 77.3% 73.5% Convenience stores 75.0% -5.4 -1.0 72.9% 71.9% 57.3% 55.6% Drug stores 59.9% -2.1 -1.6 56.8% 55.2% 47.1% 47.6% Supercenters 54.0% +7.7 +0.1 54.7% 54.8% 51.6% Discount department 46.6% 51.0% stores 46.1% -5.7 -0.2 45.9% 2005 38.4% Dollar stores/small-format 37.0% 2006 2 42.6% value retailers 40.0% 2007 +2.9 +1.3 41.3% 2008 30.1% 30.6% 2009 Warehouse clubs 30.7% 29.0% +0.9 +2.0 31.0% 1Includes conventional supermarkets, extreme value/price-impact supermarkets, health/natural supermarkets and specialty food stores/neighborhood specialty markets 2Includes dollar stores (e.g., Dollar General and Family Dollar), one-price general merchandisers (e.g., Dollar Tree) and closeout/liquidators (e.g., Big Lots) 3Includes weekly shoppers Source: Retail Forward ShopperScape™, October 2005, 2006, 2007, 2008 and 2009 Shopping Incidence: Who’s Winning, Who’s Losing, February 2010 3 WINNING CHANNELS/FORMATS moves one way or another in terms of monthly shopping incidence gains or losses, but instead (Figure 3) held their own in terms of shopper retention. • Conventional supermarkets—The conventional • Walmart—While its overall shopper base held supermarket segment is a winner in terms steady in 2009, Walmart Supercenter’s weekly of expanding both its weekly (+2.4 ppts) and shopper base has increased by more than 4 monthly (+3.2 ppts, which includes weekly percentage points since 2005 and its monthly shoppers) shopper bases. After years of shopper base by more than 7 points. watching some shoppers shift to low-priced Walmart Supercenter (as the format rapidly • Target—While the percentage of monthly rolled out across the nation), conventional Target shoppers held fairly steady from 2008 to supermarkets are now witnessing a reversal of 2009, Target general merchandise stores saw fortune. Increasingly, shoppers are being drawn slightly more than a percentage point increase back to the supermarket in large part because in weekly shopper incidence—evidence that of the strong price/value/quality proposition Target’s increasing focus on shopper “needs” and aggressive pricing by leading chains as well (e.g., via PFresh introduction, a stronger food as a growing roster of supermarket formats. focus, up&up private brand launch) vs. “wants” Additional appeal factors, such as service and may indeed be driving more frequent traffi c. selection (e.g., specialty foods, health/natural foods, prepared foods/meal solutions), position • Niche supermarkets—At opposite ends of conventional supermarkets to retain shoppers the grocery store spectrum, both extreme- during the anticipated economic recovery in value/price-impact grocers (e.g., ALDI, Food 2010 and beyond. 4 Less, Save-A-Lot) and healthy/natural supermarkets (e.g., Whole Foods) are holding • Warehouse clubs—An increasing focus on onto their weekly shopper bases. However, the food and fresh and prepared meal solutions percentage of monthly shoppers is edging up at by club operators is prompting more frequent both formats, suggesting that shoppers are still warehouse club shopping trips: The percentage interested in visiting these formats on a regular of weekly club shoppers increased 1.1 basis if not weekly. percentage point between 2008 and 2009. The percentage of shoppers making a monthly club trip rose 2 percentage points year-to-year as LOSING CHANNELS/FORMATS affl uent yet frugal shoppers use clubs to stock up on essentials as well as for the occasional • Drug stores—Drug stores continue to struggle treasure hunt. Looking forward, clubs have to attract and retain shoppers. Fewer plenty of upside potential to rebuild traffi c consumers are shopping the drug store channel levels and sales with business customers as the on a monthly basis. While the sector’s Big economy improves. 3—Walgreens, CVS and Rite Aid—are holding their own in terms of monthly shoppers, • Dollar stores and other small-format value “all other drug store retailers” have had a retailers—Dollar stores appeal not only to signifi cant dropoff in monthly shoppers since core low-income shoppers, but a broad swath mid-decade.
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