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Supermarkets: More Than Just Food Retailing - UK - November 2014 The above prices are correct at the time of publication, but are subject to Report Price: £1750.00 | $2834.04 | €2223.04 change due to currency fluctuations. “Aldi and Lidl have changed the “conversation” around grocery – in particular, they have pushed the price/quality balance to greater prominence. And, in a volume-sensitive business, they have put major pressure on some major grocers – most notably Morrisons and Tesco.” – John Mercer, European Retail Analyst This report looks at the following areas: BUY THIS • Our online section provides market sizes and market shares for the fast-growing online REPORT NOW grocery segment; • Our Sector Size and Forecast section provides three separate segment forecasts – for Supermarket formats, Convenience Stores and Online – as well as the total sector VISIT: forecast. store.mintel.com • Our Market Shares section provides five years of historic market shares data and estimated 2014 market shares for the biggest retailers, including for Aldi and Lidl. CALL: The UK grocery sector is changing fast, causing upheavals for several of the long-established market EMEA leaders. As online grocery sales grow and major grocers push into convenience formats, these channels +44 (0) 20 7606 4533 cannibalise share from superstore and supermarket formats that generate the bulk of retailers’ profits: retailers are investing simply to stand still. At the same time, the shift away from out-of-town stores should not be overstated: hypermarket-based Asda is outperforming rivals, Sainsbury’s continues to Brazil open larger out-of-town stores and Tesco has said underperformance in hypermarkets is limited to around one-third of its largest stores. 0800 095 9094 Americas Meanwhile, the discounters, Aldi and Lidl, are growing fast: Aldi overtook M&S Food by annual revenues in 2013 and is set to leapfrog Waitrose by this measure in 2014. Aldi and Lidl are chipping +1 (312) 943 5250 away at the market shares of (some) mid-market, full-range supermarkets – a problem which appears to be most severe for Morrisons and Tesco. APAC +61 (0) 2 8284 8100 The midmarket grocers are under pressure to respond by competing more aggressively on pricing. Price competition has already pushed food and beverage prices into deflationary territory, and any EMAIL: major price offensive – for instance, by Tesco – will hit sector sales in 2015. [email protected] This report is part of a series of reports, produced to provide you with a DID YOU KNOW? more holistic view of this market reports.mintel.com © 2014 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel. Supermarkets: More Than Just Food Retailing - UK - November 2014 The above prices are correct at the time of publication, but are subject to Report Price: £1750.00 | $2834.04 | €2223.04 change due to currency fluctuations. Table of Contents Introduction Addressing the issues confronting grocery retailers Data Financial definitions Abbreviations Executive Summary The market Value growth slowed by price competition Figure 1: Grocery retailers: Sector size and forecast (incl VAT), 2009-19 Figure 2: Grocery retailers: Sector size and forecast (incl VAT), by segment, 2009-19 Companies, brands and innovations Market shares Figure 3: Leading grocers: Market shares, 2013 Figure 4: The Big Four grocers: Market shares, 2009-14 Brand research Figure 5: Brand research: Levels of trust and differentiation, September 2014 The consumer Where they shop Figure 6: The consumer: Retailers used for main and top-up shops, September 2014 Types of store used Figure 7: The consumer: Type of store used for main shops and top-up shops, September 2014 Attitudes to the discounters Figure 8: The consumer: Attitudes to Aldi/Lidl – Agreement with statements, September 2014 Why they do not shop (or shop more) at Aldi/Lidl Figure 9: The consumer: Why they do not do any/more of their grocery shopping at Aldi or Lidl, September 2014 Non-groceries purchased from supermarkets Figure 10: The consumer: Non-grocery items bought from grocery retailers, whether online or in-store, September 2014 What we think Issues and Insights Aldi and Lidl – How big will they get? The facts The implications Is the hypermarket dead? The facts The implications But shopper trends are hitting grocery retailers VISIT: store.mintel.com BUY THIS CALL: EMEA +44 (0) 20 7606 4533 Brazil 0800 095 9094 Americas +1 (312) 943 5250 APAC +61 (0) 2 8284 8100 REPORT NOW EMAIL: [email protected] reports.mintel.com © 2014 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel. Supermarkets: More Than Just Food Retailing - UK - November 2014 The above prices are correct at the time of publication, but are subject to Report Price: £1750.00 | $2834.04 | €2223.04 change due to currency fluctuations. The facts The implications So should retailers be expanding their convenience formats? The facts The implications Trend Application Accentuate the Negative Life Hacking Mintel Futures The Market Environment Key points Inflation dwindles Figure 11: Consumer prices: Annual % change, January 2012-September 2013 Real-terms growth likely to return Figure 12: Annual consumer prices inflation (food, beverages, tobacco) versus annual growth in grocers’ sector sales, 2009-14 Consumers feeling better off Figure 13: The consumer: Trends in current financial situation compared a year ago, July 2011-September 2014 But they are not losing frugal habits Figure 14: The consumer: Those saying they “do more”, selected attitudes, December 2013-September 2014 Figure 15: The consumer: Those saying they “do more”, average age and affluence, September 2014 Ageing population Figure 16: Projected age structure of the UK population, 2013 and 2018 Young people living with parents for longer Figure 17: UK: Percentage of young adults aged 20-34 living with their parents, by age group, 2004-13 Figure 18: UK: Number of households, by occupancy, 2004 and 2013 Consumer Spending and Channels of Distribution Key points Low inflation to impact on spending growth in 2014 Figure 19: Consumer spending on food, beverages and tobacco (incl VAT), 2009-13 Figure 20: Estimated distribution of spending on food, beverages and tobacco, by type of retailer, 2013 Figure 21: Food specialists sub-sector breakdown, 2013 Spending on non-food grocery categories Figure 22: Consumer spending on non-food grocery categories (incl VAT), 2009-13 Sector Size and Forecast Key points Value growth slowed by price competition Figure 23: Grocery retailers: Sector size and forecast (incl VAT), 2009-19 Figure 24: Grocery retailers: Sector size and forecast (incl VAT), at current and constant prices, 2009-19 VISIT: store.mintel.com BUY THIS CALL: EMEA +44 (0) 20 7606 4533 Brazil 0800 095 9094 Americas +1 (312) 943 5250 APAC +61 (0) 2 8284 8100 REPORT NOW EMAIL: [email protected] reports.mintel.com © 2014 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel. Supermarkets: More Than Just Food Retailing - UK - November 2014 The above prices are correct at the time of publication, but are subject to Report Price: £1750.00 | $2834.04 | €2223.04 change due to currency fluctuations. Segment forecasts: Supermarkets stagnate, online surges, convenience grows Figure 25: Grocery retailers: Sector size and forecast (incl VAT), by segment, 2009-19 Supermarkets segment: Stagnating in 2014 Figure 26: Supermarkets: Segment size and forecast (incl VAT), 2009-19 Figure 27: Supermarkets: Segment size and forecast (incl VAT), at current and constant prices, 2009-19 Convenience stores segment: Outperforming Figure 28: Convenience stores: Segment size and forecast (incl VAT), 2009-19 Figure 29: Convenience stores: Segment size and forecast (incl VAT), 2009-19 Online: Strong growth from a small base Figure 30: Online sales by grocers: Segment size and forecast (incl VAT), 2009-19 Figure 31: Online sales by grocers: Segment size and forecast (incl VAT), at current and constant prices, 2009-19 Real-terms sector growth: 2014 will be better Figure 32: Annual consumer prices inflation (food, beverages, tobacco) versus annual growth in grocers’ sector sales, 2009-14 Forecast methodology The fan chart Strengths and Weaknesses Strengths Weaknesses Non-grocery Retail Key points Non-groceries declining as share of sector sales Figure 33: Grocers sector: Estimated total general merchandise and clothing/footwear sales (incl VAT), 2011-13 Non-grocery as a proportion of retailers’ sales Figure 34: Leading grocers: Estimated general merchandise and clothing sales as % of total sales, 2013 Non-grocery sales by major retailer Figure 35: Leading grocers’ estimated sales of major non-food categories (excl VAT), 2011-13 Brand Perceptions and Social Media Brand perceptions Key brand metrics Figure 36: Key brand metrics, September 2014 Brand map Figure 37: Attitudes towards and usage of brands in the supermarket sector, September 2014 Correspondence analysis Brand attitudes Figure 38: Attitudes, by supermarket brand, September 2014 Brand personality Figure 39: Supermarket brand personality – Macro image, September 2014 Figure 40: Supermarket brand personality – Micro image, September 2014 VISIT: store.mintel.com BUY THIS CALL: EMEA +44 (0) 20 7606 4533 Brazil 0800 095 9094 Americas +1 (312) 943 5250 APAC +61 (0) 2 8284 8100 REPORT NOW EMAIL: [email protected] reports.mintel.com © 2014 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel. Supermarkets: More Than Just Food Retailing - UK - November 2014 The above prices are correct at the time of publication, but are subject