Food Retailing - UK - November 2007

Table of Contents

• Issues in the Market
• Main themes
• Abbreviations
• Market in Brief
• The future
• Spending on food
• Consumer -- Green and ethical issues
• Shopping patterns -- Convenience is king
• Leading retailers
• Internal Market Environment
• Discounting
  • Figure 1: UK: Consumer Price Index: All goods and food, 1996-2006
  • Figure 2: UK: Consumer Price Index: All goods, food and beverages, January 2006-September 2007
• The health trend
• Premiumisation
• The competitive landscape
• Local focus
• Growth ahead
• Online
• The caring retailer?
• Green and ethical
• ...or big and bad?
• The Competition Commission Preliminary Report
• Broader Market Environment
• Population trends
• Growing, greying population
  • Figure 3: UK: Population trends, 2002-12
  • Figure 4: UK: Population trends, by age band, 2002-12
  • Figure 5: UK: Population, by age band, 2002, 2007 and 2012
• Living alone
  • Figure 6: UK: Percentage change of household size, 2002-12
• Population implications for the grocery market
• The consumer
• Increasingly affluent
  • Figure 7: UK population, by socio-economic group, 2002 and 2012
• PDI continues to rise
  • Figure 8: PDI and consumer expenditure, at current and constant 2002 prices, 2002-12
• Bank of England determined to curb rising inflationary pressures
  • Figure 9: PDI and consumer spend growth rates, at current and constant prices, 2002-07 and 2007-12
• Consumer implications for the grocery market
• The Market in Context
• Key findings
• Food is still core
• Food holds up quite well
  • Figure 10: UK: Consumer spending on selected major goods categories, 2002-06
• Food and drink market versus food retailers and all retail sales
  • Figure 11: UK: Index of consumer spending growth in food, drink and tobacco, all retail sales and food retailers' sales, 2002-06
• Food and drink
• Food holds up surprisingly well
• Non-alcoholic drinks power ahead
• Price increases see value sales leap in 2007 first half
  • Figure 12: UK: Food and drinks spending 2002-07
  • Figure 13: UK: Food and drinks spending, indexed growth, 2002-07
  • Figure 14: UK: Food and drinks spending shares, 2006
• Pets, cleaning, and health & beauty
• Non-edible groceries outstrip all retail sales
• Personal care steams ahead in 2007
  • Figure 15: UK: Spending on pet, cleaning and health & beauty products, 2002-07
  • Figure 16: UK: Spending on pet, cleaning and health & beauty products, indexed growth, 2002-07
• Eating out
  • Figure 17: UK: Spending on food and eating out, 2002-07
  • Figure 18: UK: Spending on food and drink relative to spending on eating out, 2002-07
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Sector Size and Forecast
• Key findings
• The future
• Economic outlook
• Inflation and interest rates
• Consumer outlook
• Retail sales
• Food retailers forecasts
  • Figure 19: UK: Food retailers sales, 2002-12
  • Figure 20: UK: Food retailers as % of all retail sales, 2002-12
• The past
• Food retailers gain retail market share
  • Figure 21: UK: Food retailers' sales, 2002-07
  • Figure 22: UK: Relative sales performance of food generalists and specialists, 2002-07
• Where They Shop for Groceries
• Key findings
• The big four
• The rest
• Main grocery shopping
• The short term
  • Figure 23: Store used for main grocery shop, August 2007
• The longer term
• Tesco losing primary shoppers?
  • Figure 24: Leading food retailers' share of main shoppers, 1998-2007
• The family shop
  • Figure 25: Share of main shoppers for leading supermarkets, by family lifestage, August 2007
• Shopper profiles
  • Figure 26: Profiles of supermarkets primary shoppers, August 2007
• The big four
• The others
  • Figure 27: Leading grocers' consumer profiles, by age group, August 2007
  • Figure 28: Leading grocers' consumer profiles, by socio-economic group, August 2007
• The twelve year shift
  • Figure 29: Supermarket customer profiles 12-year shift
• Other grocery shopping
  • Figure 30: Other stores used for grocery shopping, August 2007
• Tescoland
  • Figure 31: Usage of leading food retailers for other grocery shopping, 1998-2007
• Main grocery vs. other grocery
  • Figure 32: Main grocery shopping and exclusively other grocery shopping, August 2007
• Where They Shop for Groceries -- Detailed Consumer Demographics
  • Figure 33: Store used for main grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel' s Special Groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, August 2007
  • Figure 34: Other stores used for grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel' s Special Groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, August 2007
  • Figure 35: Other stores used for grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel' s Special Groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, August 2007
  • Figure 36: Other stores used for grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel' s Special Groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, August 2007
  • Figure 37: Profile of top four stores used for main grocery shopping, by gender, age and socio-economic group, August 2007
  • Figure 38: Stores used for any grocery shopping, by gender, age and socio-economic group, August 2007
  • Figure 39: Stores used for any grocery shopping, by gender, age and socio-economic group, August 2007
• Shopping for Groceries on the Internet
• Key findings
• Shopping for groceries online
  • Figure 40: Grocery shopping and the Internet, August 2007
• Any Internet grocery shopping
• Would consider trying in the future
• Would never consider using it
  • Figure 41: Grocery shopping on the Internet, by gender, age, socio-economic group and supermarkets used, August 2007
• Shopping for Groceries on the Internet -- Detailed Consumer Demographics
  • Figure 42: Grocery shopping on the Internet, by lifestage, presence of children, Mintel' s Special Groups, working status, region, ACORN categories, media usage and commercial TV viewing, August 2007
• Retail Competitor Analysis
• Key findings
• Share of the market
• Technicalities
• Marks & Spencer
• Fuel and other income
• Mintel adjustments
• Market leaders
• C-stores
• High street/secondary supermarket
  • Figure 85: UK: Leading food and drink retailers, 2006/07
• Outlets by type
  • Figure 86: UK: Leading food and drink retailers, outlet numbers, by location, 2006/07
• Evaluation
  • Figure 87: Food retailers, evaluation, 2007
• Market shares
  • Figure 88: UK food retailers top 20 market shares, 2006/07
• Aldi (Europe)
  • Figure 89: Aldi (Europe): Sales as share of all food retailers' sales in Europe, 2001-05
• Strategic evaluation
• Background
• Financial performance
  • Figure 90: Aldi (Europe): Estimated group financial performance, 2002-06
• Store portfolio
  • Figure 91: Aldi (Europe): Outlet data, 2002-06
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• Asda Stores Ltd
  • Figure 92: Asda Stores Ltd: Sales as share of all food retailers in UK, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 93: Asda Stores Ltd: Group financial performance, 2003-07
• Store portfolio
  • Figure 94: Asda Stores Ltd: Outlet data, 2003-07
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
• Operational issues
• Advertising and marketing
  • Figure 95: Asda Stores Ltd: Main media advertising spend, 2002-06
  • Figure 96: Asda Stores Ltd: Media advertising spend by usage, 2006
• e-commerce and home shopping
• Co-operative Group
  • Figure 97: Co-operative Group (Food): Sales as share of all food retailers' sales in UK, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 98: Co-operative Group: Group financial performance, 2002/03-2006/07
• Store portfolio
  • Figure 99: Co-operative Group: Outlet data, 2002/03-2006 /07
• Retail offering
• Market positioning
• Brands
  • Figure 100: Co-operative Group: Own brands, summer 2007
• Product offer
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• Iceland Foods Ltd
  • Figure 101: Iceland Foods Ltd: Sales as share of all food retailers in UK, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 102: Iceland Foods Ltd: Group financial performance, 2003-07
• Store portfolio
  • Figure 103: Iceland Foods Ltd: Outlet data, 2003-07
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• Marks & Spencer (Food)
  • Figure 104: Marks & Spencer (food): Sales as share of all food retailers in UK, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 105: Marks & Spencer (food): Group financial performance, 2003-07
• Store portfolio
  • Figure 106: Marks & Spencer (food): Outlet data, 2003-07
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• Wm Morrison Supermarkets
  • Figure 107: Wm Morrison Supermarkets: Sales as share of all food retailers' sales in UK, 2002/03-2006/07
• Strategic evaluation
• Background
• Financial performance
  • Figure 108: Wm Morrison Supermarkets: Group financial performance, 2002/03-2006/07
• 2007 interims show growth continuing
• Store portfolio
  • Figure 109: Wm Morrison Supermarkets: Outlet data, 2002/03-2006/07
  • Figure 110: Wm Morrison Supermarkets: Store portfolio by size, 2003 and 2007
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• Musgrave
  • Figure 111: Musgrave: Sales as share of all food retailers in UK, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 112: Musgrave: Group financial performance, 2002-06
  • Figure 113: Musgrave: Selected retail sales, 2002-06
• Store portfolio
  • Figure 114: Musgrave: Retail outlet data, 2002-06
• Retail offering
• Market positioning
• Brands and pricing
• Product offer
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• J Sainsbury
  • Figure 115: Sainsbury' s Supermarkets: Sales as share of all food retailers in UK, 2002-06
• Strategic evaluation
• Background
• Financial performance
• Group
  • Figure 116: J Sainsbury: Group financial performance, 2002/03-2006/07
  • Figure 117: Sainsbury' s Supermarkets, 2002/03-2006/07
  • Figure 118: Sainsbury' s Supermarkets: Sales growth, 2002/03-2006/07
• Store portfolio
  • Figure 119: Sainsbury' s Supermarkets: Outlet data, 2002/03-2006/07
  • Figure 120: Sainsbury' s Supermarkets: Outlets by size, 2002/03-2006/07
• Retail offering
• Market positioning
• Brands
  • Figure 121: Sainsbury' s Supermarkets: Own-label food portfolio
• Product offer
• Pricing
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• Schwarz Group
  • Figure 122: Schwarz Group: Estimated sales as share of all food retailers' sales in Europe, 2002-06
  • Figure 123: Schwarz Group: Estimated sales as share of all food retailers' sales in Germany, 2002-06
  • Figure 124: Schwarz Group: Estimated sales as share of all food retailers' sales in France, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 125: Schwarz Group: Share of group sales of German operations, by fascia, 2002/03-2006/07
  • Figure 126: Schwarz Group: Estimated share of group international sales by market, 2006/07
  • Figure 127: Schwarz Group: Estimated group sales, 2002/03-2006/07
• Store portfolio
  • Figure 128: Schwarz Group: Store portfolio, Germany vs international, 2002/03-2006/07
  • Figure 129: Schwarz Group: Outlet data, 2002/03-2006/07
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• Somerfield
  • Figure 130: Somerfield: Sales as share of all food retailers in UK, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 131: Somerfield Stores Ltd, UK retail sales and operating profit, 2003-07
• Store portfolio
  • Figure 132: Somerfield: Outlet data, 2003-07
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• SPAR International
  • Figure 133: SPAR (Europe): Sales as share of all European food retailers' sales, 2002-06
• Strategic evaluation
• Background
  • Figure 134: SPAR International: Year of entry by country
• Financial performance
  • Figure 135: SPAR International: Retail sales by country, 2002-06
  • Figure 136: SPAR International: Estimated European sales exclusive of sales tax, 2006
• Store portfolio
  • Figure 137: SPAR International: Outlet data, 2002-06
  • Figure 138: SPAR International: Sales per m² by country (Europe), 2006European operations
• Discontinued operations
• Continuing European operations
  • Figure 139: SPAR (Austria): Sales as share of Austrian food retailers' sales, 2002-06
  • Figure 140: SPAR (Belgium): Sales as share of all Belgian food retailers' sales, 2002-06
  • Figure 141: SPAR (Czech Republic): Sales as share of all Czech food retailers' sales, 2002-06
  • Figure 142: SPAR (Denmark): Sales as share of all Danish food retailers' sales, 2002-06
  • Figure 143: SPAR (France): Sales as share of all French food retailers' sales, 2002-06
  • Figure 144: SPAR (Greece): Sales as share of all Greek food retailers' sales, 2002-06
  • Figure 145: SPAR (Hungary): Sales as share of all Hungarian food retailers' sales, 2002-06
  • Figure 146: SPAR (Ireland): Sales as share of all Irish food retailers' sales, 2002-06
  • Figure 147: SPAR (Italy): Sales as share of all Italian food retailers' sales, 2002-06
  • Figure 148: SPAR (Netherlands): Sales as share of all Dutch food retailers' sales, 2002-06
  • Figure 149: SPAR (Norway): Sales as share of all Norwegian food retailers' sales, 2002-06
  • Figure 150: SPAR (Spain): Sales as share of all Spanish food retailers' sales, 2002-06
  • Figure 151: SPAR (Switzerland): Sales as share of all Swiss food retailers' sales, 2002-06
  • Figure 152: SPAR (UK): Sales as share of all UK food retailers' sales, 2002-06
• Non-European activities
  • Figure 153: SPAR International: Non-European sales and outlets by country, 2001 and 2006
• Retail offering
• Market positioning
• Product offer
• Own-brand goods
• Pricing
• Operational issues
• Advertising and marketing
• E-commerce and home shopping
• Tesco
  • Figure 154: Tesco (Europe): Sales as share of all food retailers in Europe, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 155: Tesco Plc: Group financial performance, 2002/03-2006/07
  • Figure 156: Tesco (UK): Sales as share of all food retailers in UK, 2002-06
  • Figure 157: Tesco (Czech Rep): Sales as share of all food retailers in Czech Republic, 2002-06
  • Figure 158: Tesco (Hungary): Sales as share of all food retailers in Hungary, 2002-06
  • Figure 159: Tesco (Ireland): Sales as share of all food retailers in Ireland, 2002-06
  • Figure 160: Tesco (Poland): Sales as share of all food retailers in Poland, 2002-06
  • Figure 161: Tesco (Slovak Rep): Sales as share of all food retailers in Slovak Republic, 2002-06
• e-commerce
• Store portfolio
  • Figure 162: Tesco Plc: Outlet data, 2002/03-2006/07
  • Figure 163: Tesco: UK store formats, 2007
  • Figure 164: Tesco: European store formats, 2007
  • Figure 165: Tesco: Asian store formats, 2007
• Development
• Retail offering
  • Figure 166: Tesco UK: Sales by product, 2006/07
• Market positioning
• Brands
• Pricing
• Operational issues
• Advertising and marketing
  • Figure 167: Tesco: Main media advertising expenditure, 2002-06
• e-commerce and home shopping
• Waitrose Ltd
  • Figure 168: Waitrose Ltd: Sales as share of all food retailers in UK, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 169: Waitrose Ltd: Group financial performance, 2003-07
• Store portfolio
  • Figure 170: Waitrose Ltd: Outlet data, 2003-07
• Retail offering
• Market positioning
• Brands
• Product offer
• Pricing
• Operational issues
• Advertising and marketing
• e-commerce and home shopping
• Retail Advertising and Promotion
• Key findings
• Trends in total spending on advertising
  • Figure 171: Main media advertising expenditure by leading supermarkets, 2002-06
  • Figure 172: UK: Main media advertising, by leading supermarket and grocery chains, by media usage, 2006