According to the IGD’s latest research, 59% of shoppers say
that their most important concern just now how much they spend. Not surprising
given that since 2007 prices have grown by 14% compared with wages at 9%, the
spectre of unemployment looms and every
day brings a fresh story of economic woe.
As Giles Quick of Kantar Worldpanel pointed out in a recent presentationto dairy and red meat levy boards, in the search for spending control, shoppers
have two options - either buy less or pay less.
It is clear that they are following both routes.
Both IGD and Sainsbury in its recent results presentation
confirmed that consumers are indeed buying less. Justin King of Sainsbury told
us that shoppers are putting less items in their shopping trolleys, and he and
the IGD pointed out that shoppers are making more trips per week in an effort
to cut down on total spend by buying only what they really need, and minimising
waste as less products are thrown out due to being past sell by dates or starting
to shrivel in the fridge. IGD data shows that the percentage of people making 3
or more shopping trips a week has gone up from 39% to 49 % in just two years.
Shoppers try hard to pay less. For the first time since late
2009 sales of supermarket value lines are growing faster than their premium
ranges. The amount of product sold on promotion shows no sign of decreasing and
40p in every £ is spent on deals. Supermarkets have recognised this trend to
shopping around and responded. ASDA promises to be 10% cheaper than everyone
else, Sainsbury have countered this by giving their shoppers a coupon at the
till which refunds the price difference if a branded product could be bought
more cheaply that day in Tesco or ASDA, and Waitrose have now pledged to match
Tesco on all branded items except when these are on promotion.
Pricing at a “round pound” is another tactic being pursued
to attract shoppers. ASDA first started the trend towards pricing goods at £1,
£2 or £3, and such goods now account for 40% of their sales in categories where
the tactic operates. Tesco and Sainsbury are responding by stepping up the
number of goods they sell in this way.
Paying less encompasses reductions in fringe shopping costs.
The effort to reduce fuel consumption has led to a rise in on line shopping,
and buying from the local convenience store. Sainsbury recorded a 20% increase
in online grocery sales in the past twelve months, and IGD tell us that 17% of
people currently shop for groceries on line.
All in all it’s a story of hard pressed consumers who think
that they will be even harder pressed in the coming months. 46% say their
future spending will decrease a little or alot compared with just 15% who think
their spending will increase a little or alot. And it’s a story of highly
competitive retailers changing strategies, and coming up with innovative ways
of fighting for every tenth of a point of market share.
No comments:
Post a Comment