Health Food Retailing - UK - April 2008

Table of Contents

• Issues in the Market
• Key themes
• Definition
• Abbreviations
• Market in Brief
• Steady growth for specialists sector
• Highly competitive marketplace
• Emergence of organic specialists
• More awareness of healthy eating
• Expanding the market
• Consumers will take initiative
• New legislation will affect suppliers more than retailers
• Future for health food specialists
• Industry Insight
• Key points
• Independents losing footfall
• General consumer caution
• Premium products buoyant
• Consumer awareness stimulated
• Any publicity is good publicity
• Celebrities off the boil
• So who uses health food shops?
• When do they turn to health shops?
• Supermarkets strong in food
• Competition has intensified
• Health stores better as advisers
• But not a substitute for the doctor
• Vast array of formulae
• Too much discounting
• New therapies can stimulate interest
• Strained relationships with therapists?
• Internet making inroads
• Major commitment to run websites
• The EU food directive
• Whole Foods Market -- the impact
• Is there a future for independents?
• Internal Market Environment
• Key points
• Social change and celebrity educators
• Suspicion mounts
• Nanny knows best?
• Are health food retailers losing out?
• Organic plays a part
• Healthier lifestyles
  • Figure 1: Agreement with selected lifestyle statements on health, by gender, 2003-07
• Better safe than sorry
• Internet a source of information
  • Figure 2: Internet access, Jan 2001-Jan 2008
• Think slim
  • Figure 3: Adults who are trying to lose weight most of the time, by gender, 2000-07
• Ethical consumerism
  • Figure 4: Agreement with lifestyle statement ' I buy fair trade when available' , 2003-07
• Food intolerance and allergies
• Broader Market Environment
• Key points
• Price inflation
  • Figure 5: UK: Consumer price index: All goods and food, Dec 2005-Dec 2007
  • Figure 6: Trends and projections in UK population, by age, 2003-13
• Growing population
• Growing grey market
• More singletons
• Over-50s take more interest
• Responsibility for the children
• Growing wealth
  • Figure 7: PDI and consumer expenditure, at constant 2002 prices, 2003-13
• Busy people but less time
  • Figure 8: Time spent on occupation per day in an average week by full-time workers, 2002 and 2006
• Market in Context
• Key points
• Overall consumer spending
  • Figure 9: UK: Consumer spending on selected major goods categories, 2002-06
• High interest in personal care
• Price competition in medical goods
  • Figure 10: UK retail sales of vitamins, minerals and supplements and products that compete with them, 2002-06
• Complementary medicines help consumers take control
• Five-a-day changing habits
  • Figure 11: Family purchasing on selected food categories, 2003-06
• Functional and free-from foods popular, and growing
  • Figure 12: Estimated UK retail sales* of gluten-free, dairy-free and other free-from foods, by value, 2002-07
• Skincare
• Prescriptions dent free-from potential
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Sector Size and Forecast
• Key points:
• All retail sales growing
  • Figure 13: All retail sales, at current and constant 2002 prices, 2002-07
• Non-specialised food stores
  • Figure 14: Retail sales through non-specialist food stores, at current and constant 2002 prices, 2002-07
• Health stores running out of steam
  • Figure 15: Estimated sales and forecast through health food stores, at current and constant 2003 prices, 2003-13
  • Figure 16: Comparison of previous and estimated 5-year real growth of health food sector
• Future growth in the sector
  • Figure 17: Forecast growth of key segments of the health food market, 2007-12
• Factors used in the forecast
• Retail Competitor Analysis
• Key points
• Health food shops face intense competition
  • Figure 18: Retail distribution of main health food categories, 2007
• VMS share is large
• Chemists number one choice for medicines
• Slimming not so healthy?
  • Figure 19: UK: leading specialist health food retailers, 2007
• Retailer Profiles
• Key points
• Holland & Barrett
  • Figure 20: Holland & Barrett background and financial performance, 1997-2007
  • Figure 21: Holland & Barrett: Outlet data, 2002-07
• Julian Graves
• Grocery multiples
• Tesco
• Sainsbury' s
• Asda
• Morrisons
• Waitrose
• Marks & Spencer
• Non-specialists
• Chemists
• Boots The Chemists
• Superdrug
• Lloyds Pharmacy
• Independent health food shops
• NAHS
• The Health Store
• Small chain independents
• Rosemary' s Health Foods
• Revital
• Bean Freaks
• Fitzpatrick' s Herbal Health Shop
• Wyedean Wholefoods
• Organic food specialists
• Whole Foods Market (incorporating Fresh & Wild)
• As Nature Intended
• Planet Organic
• Other organic supermarkets
• Alternative medicines
• Dr & Herbs
• Dr China
• Neal' s Yard Remedies
• Culpeper
• Botanica Medica
• Direct sellers
• Online health food retailers
• Healthy Direct/Nature' s Range and Healthspan Direct
• Retailer Advertising and Promotion
• Key points
• Advertisers cut back on spend
  • Figure 22: Total health food store advertising spend, 2004-07
• Holland & Barrett get behind its promotions
  • Figure 23: Main monitored media advertising spend, by health food retailer and manufacturer, 2004-07
• Advertising strategy
• Promotional activity
• Holland & Barrett
• Nature' s Range/Healthy Direct/Healthspan Direct
• Health Foods and Supplements Bought
• Key points
  • Figure 24: Health foods and food supplements bought in the last 12 months, 2003-07
• Five-a-day on target
• Whole foods boom
• ' Good bacteria' popular
• Be nicer to your chickens
• Premiumisation
• Fresher for the kids
• Feminine influence
• Target their vanity
• Mums with young children
• Lunchbox health
• Healthy foods for celebrations
• Herbal teas and healthy drinks upscale
• Premium audience for brown bread
• Self-imposed special diets?
• Where Health Foods are Bought From
• Key points
• Number of health food stores gradually decreasing
  • Figure 25: Estimated number of specialist health food stores, UK, 2002-07
• Health food shops diversify
• Non-specialists take a slice of the market
• Industry representation
• Alliance for Natural Health (ANH)
• Training groups
• National Association of Health Stores (NAHS)
• The Vegetarian Society
  • Figure 26: Where health foods and food supplements were bought in the last 12 months, November 2005-January 2008
• Holland & Barrett dominates specialists
• Older consumers favour independent stores
  • Figure 27: Profile of shoppers at health food stores, and supermarket used, January 2008
• Boots gets the cream
• Superdrug sweeping up the price-conscious
• Upscale shoppers favour fresh specialists
• Purchasing Patterns
• Key points
  • Figure 28: Purchasing patterns of health foods and supplements, January 2008
• Supermarkets are good enough
• More potential for organic theme
• Too much discounting whilst maintaining loyalty
• Appendix: Internal Market Environment
  • Figure 34: Agreement with selected lifestyle statements on health, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, media usage, household size and car ownership, 2007
  • Figure 35: Use the Internet at home, 2004-07
  • Figure 36: British Internet penetration at home/work/place of study or elsewhere, by gender, socio-economic group, age, region and working status, Jan 2001-Jan 2008
• Appendix: Sector Size and Forecast
  • Figure 37: Forecast sales of organic food, at current and constant 2007 prices, 2007-12
  • Figure 38: Forecast of UK retail sales of meat-free foods and meat substitutes, at constant prices 2001-11Figure 39: Forecast sales of VMS, herbal and homeopathic remedies, sports drinks and supplements and slimming products, at current and constant 2007 prices, 2007-12
• Appendix: Retailer Competitor Analysis
  • Figure 40: UK retail sales of vitamins and dietary supplements, by type of outlet, by value, 2002-06
  • Figure 41: UK retail sales of complementary medicines, by type of outlet, 2002-06
  • Figure 42: UK retail sales of meal replacements and appetite controllers/suppressants, by outlet type, 2001-05
  • Figure 43: UK retail sales of organic food, by outlet, by value, 2005-07
  • Figure 44: Retail distribution of meat-free foods, 2002-06
• Appendix: Health Foods and Supplements Bought -- Detailed Demographics
  • Figure 45: Health foods and food supplements bought in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008
  • Figure 46: Health foods and food supplements bought in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008
  • Figure 47: Health foods and food supplements bought in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008
• Appendix: Where Health Foods are Bought From: Detailed Demographics
  • Figure 48: Where health foods and food supplements were bought in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008
  • Figure 49: Where health foods and food supplements were bought in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008
  • Figure 50: Where health foods and food supplements were bought in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008
  • Figure 51: Where health foods and food supplements were bought in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008
• Appendix: Purchasing Patterns -- Detailed Demographics
  • Figure 52: Purchasing patterns of health foods and supplements, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008
  • Figure 53: Purchasing patterns of health foods and supplements, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008
  • Figure 54: Purchasing patterns of health foods and supplements, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commercial TV viewing, supermarket usage, household size, car usage, detailed lifestage groups and terminal education age, January 2008