Table of Contents
Issues in the Market
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- Key themes
- Definitions
- Product categories
- Financial definitions
- Abbreviations
Future Opportunities
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- Widening the appeal of standalones
- Tempting older customers
- How to expand the teenage fanclub?
- Spending time to save money
- Male Shoppers: Potential still unexploited
Market in Brief
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- Grocers’ non-food growth slows dramatically
- Clothing and footwear the main growth driver
- Research shows significant opportunities
- The competitor line-up
- Tesco
- Asda
- Sainsbury’s
- Morrisons
- The discounters
- What will happen to the non-foods market?
- The consumer downturn will hit spending growth
- Trading down may help
- Margins under pressure
- Retirees set to grow
- Competition and planning law
- Online offer expands
- Increased flexibility of store formats and distribution
Internal Market Environment
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- Key points
- Planning laws
- Competition appeal goes Tesco’s way
- Growth of non-food space
- Internet shopping
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- Figure 1: Estimated grocers’ e-commerce sales, 2007
Broader Market Environment
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- Key points
- Consumers will hold back on spending
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- Figure 2: UK real PDI growth, consumer expenditure growth, bank base rate and savings ratio, actual and projected, 2003-13
- Inflation set to plummet
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- Figure 3: UK actual and projected price inflation in food and selected non-food markets, 2003-13
- Population moves upmarket
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- Figure 4: UK adult population 15+, by socio-economic group, 2003-08 and 2008-13
- Fewer families means a challenge to supermarkets
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- Figure 5: UK adult population 15+ by lifestage, percentage change, 2003-08 and 2008-13
- Car ownership rises
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- Figure 6: GB percentage of households with access to a car, 1985-2005
The Market in Context
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- Key points
- Sales through food retailers versus all retail sales
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- Figure 7: All retail sales and predominantly food retailers’ sales, at current prices, 2003-08
- Figure 8: Growth in all retail sales and predominantly food retailers’ sales, at current prices, 2003-08
- Sales through food stores versus non-food stores
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- Figure 9: Sales through food retailers versus non-food retailers, at current prices, 2003 and 2008
- Grocers’ non-food sales compared with total consumer expenditure
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- Figure 10: Grocers’ estimated sales in individual product categories compared to consumer expenditure, 2008, and % change, 2003-08
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Who’s Innovating?
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- Asda – cutting the queues for the doctor
- Tesco – taking Direct into new places
- Sainsbury’s and Tesco – moving into the digital sphere
- Asda – Finding points of difference in a crowded clothing market
Market Size and Forecast
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- Key points
- Dramatic slowdown underway
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- Figure 11: Non-food sales of grocers, 2003-13
- Factors used in the forecast
- Breakdown by category
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- Figure 12: Estimated sales of selected non-food categories in grocery multiples, at current prices, 2003-08
- What will affect this market in future?
- Space: Switch of strategy?
- Competition Commission
- Consumer spending priorities
- Inflation versus deflation
- Rise of home shopping
- Family lifestage less important
Purchasing of Non-food Items in Grocery Multiples
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- Key points
- Tesco leads non-foods sales in most areas
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- Figure 13: Supermarkets used for buying non-food items in the last 12 months, January 2009
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- Figure 14: Types of non-food items bought at supermarkets/grocery stores in the last 12 months, January 2009
- Asda achieves wider womenswear age appeal
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- Figure 15: Purchasing of clothing and footwear at supermarket used for grocery shopping, January 2009
- Sainsbury’s and Morrisons behind on books
- Childless less keen on CDs/DVDs
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- Figure 16: Supermarkets/grocery stores used for buying CDs/DVDs/video games, by whether household has children or not, January 2009
- Gardening and DIY: Potential for growth?
- Seasonal products: How to encourage men to buy?
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- Figure 17: Supermarkets/grocery stores used for buying seasonal products, by gender, January 2009
- Number of types of non-food items bought
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- Figure 18: Number of types of non-food items bought at supermarkets/grocery stores in the last 12 months, January 2009
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- Figure 19: Types of non-foods items bought at supermarkets/grocery stores in the last 12 months, by number of types of non-food items bought, January 2009
- Tesco far ahead in online non-food
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- Figure 20: Browsing and ordering non-food items from supermarket websites, January 2009
- Grocers could promote online business in-store
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- Figure 21: Supermarkets/grocery stores used for browsing non-foods online and ordering online, by supermarket used for grocery shopping, January 2009
Consumer Shopping Behaviour
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- Key points
- Impulse the biggest driver of purchases
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- Figure 22: Shopping behaviour when buying non-foods from grocery multiples, January 2009
- Impulse buying female- and child-driven?
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- Figure 23: Agreement with statement: ‘I sometimes buy on impulse while shopping for groceries’, by gender and presence of children, January 2009
- Non-foods a destination for 25-44s
- Older consumers avoid non-foods
Consumer Attitudes and Typologies
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- Key points
- Convenience a key appeal
- Quality and presentation not a problem
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- Figure 24: Attitudes towards non-foods in grocery multiples, January 2009
- Children key in convenience and price
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- Figure 25: Respondents tending to agree with statements about non-foods in supermarkets, by presence of children, January 2009
- Women more convinced on range
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- Figure 26: Respondents tending to disagree with statements about non-foods in supermarkets, by gender, January 2009
- Men and teens value expertise
- Consumer typologies
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- Figure 27: Average scores for agreement with attitudinal statements regarding buying non-food items at supermarkets, January 2009
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- Figure 28: Target groups based on attitudes towards buying non-food items at supermarkets, January 2009
- Specialist supporters (12%)
- Who are the Specialist supporters?
- Undecided (33%)
- Who are the Undecided?
- Knowledge concerned (23%)
- Who are the Knowledge concerned?
- Supermarket fans (32%)
- Who are the Supermarket fans?
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- Figure 29: Consumer shopping behaviour, by consumer typologies, January 2009
Brand Elements
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- Brand map
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- Figure 30: Brand map for non-foods in grocery multiples, January 2009
- Aldi
- What the consumer thinks
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- Figure 31: Attitudes towards the Aldi brand for non-foods, January 2009
- ASDA
- What the consumer thinks
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- Figure 32: Attitudes towards the ASDA brand for non-foods, January 2009
- Lidl
- What the consumer thinks
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- Figure 33: Attitudes towards the Lidl brand for non-foods, January 2009
- Morrisons
- What the consumer thinks
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- Figure 34: Attitudes towards the Morrisons brand for non-foods, January 2009
- Sainsbury’s
- What the consumer thinks
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- Figure 35: Attitudes towards the Sainsbury’s brand for non-foods, January 2009
- Tesco
- What the consumer thinks
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- Figure 36: Attitudes towards the Tesco brand for non-foods, January 2009
- Brand qualities for grocery brands in non-foods
- Tesco scores for convenience and reliability
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- Figure 37: Personality of various grocery brands in non-foods, January 2009
- Experience of grocery brands for non-foods
- Large numbers have not experienced discounters
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- Figure 38: Consumer usage of various grocery brands for non-foods, January 2009
- Brand intentions for grocery brands for non-foods
- Strong consideration across brands
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- Figure 39: Consideration of various grocery brands for non-foods, January 2009
- Brand momentum for grocery brands for non-foods
- Tesco still seen as gaining ground
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- Figure 40: Momentum of various grocery brands for non-foods, January 2009
- Motivation for using grocery brands for non-foods
- Clothing the biggest pull for Asda
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- Figure 41: Brand motivation of various grocery brands for non-foods, January 2009
- Brand satisfaction for grocery brands for non-foods
- Asda most satisfying its customers
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- Figure 42: Satisfaction of various grocery brands for non-foods, January 2009
- Brand commitment to grocery brands for non-foods
- Nearly one in three would recommend Tesco
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- Figure 43: Commitment to various grocery brands for non-foods, January 2009
- Round up
Retail Competitor Analysis
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- Key points
- The competitive line-up
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- Figure 44: Grocers’ non-food competitive position, 2009
- Evaluation
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- Figure 45: Non-foods in grocery multiples, evaluation, 2009
- Recommendations for retailers to realise their potential
Retailer Profiles
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- Tesco
- Strategic evaluation
- Background
- Non-foods strategy
- Retail proposition in non-foods (including services)
- Non-food services
- Major non-food developments
- Retail branding in non-foods
- UK store portfolio
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- Figure 46: Tesco Plc, UK outlet numbers and floor space, 2004-08
- Figure 47: Tesco Plc, UK outlet numbers, by format type, 2004-08
- UK financial performance
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- Figure 48: Tesco Plc, group and UK financial performance, 2004-08
- Home shopping
- Asda
- Strategic evaluation
- Background
- Non-foods strategy
- Retail proposition in non-foods
- Major recent non-food developments
- Retail branding in non-foods
- UK store portfolio
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- Figure 49: Asda, UK outlet numbers, by format type and total floor space, 2003-07
- UK financial performance
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- Figure 50: Asda, financial performance, 2003-07
- E-commerce and home shopping
- J Sainsbury
- Strategic evaluation
- Background
- Non-foods strategy
- Retail proposition in non-foods (including services)
- Key recent developments in non-foods
- Retail branding in non-foods
- UK store portfolio
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- Figure 51: Sainsbury’s Supermarkets, outlets, by size, 2004-08
- UK financial performance
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- Figure 52: Sainsbury's Supermarkets, financial performance, 2004-08
- Home shopping
- Morrisons
- Strategic evaluation
- Background
- Non-foods strategy
- Retail proposition in non-foods (including services)
- Non-food services
- Retail branding in non-foods
- UK store portfolio
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- Figure 53: WM Morrison Group, UK outlet numbers and floor space, 2005-09
- UK financial performance
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- Figure 54: WM Morrison Group, financial performance, 2005-09
- Home shopping
Appendix – Broader Market Environment
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- Figure 55: PDI at 2003 Prices, consumer expenditure at 2003 prices, Bank of England base rate and savings ratio, 2003-13
- Figure 56: Inflation rates for various items, 2003-13
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Appendix – Purchasing of Non-food Items in Grocery Multiples
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- Figure 57: Supermarket or supermarket used: for buying menswear and womenswear, by detailed demographics*, 2009
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- Figure 58: Supermarket or supermarket used: for buying childrenswear/babywear and fashion accessories/jewellery/watches, by detailed demographics*, 2009
- Figure 59: Supermarket or supermarket used: for buying cosmetics/fragrances, by detailed demographics*, 2009
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- Figure 60: Supermarket or supermarket used: for buying books, by detailed demographics*, 2009
- Figure 61: Supermarket or supermarket used: for buying CDs/DVDs/video games, by detailed demographics*, 2009
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- Figure 62: Supermarket or supermarket used: for buying electrical items, by detailed demographics*, 2009
- Figure 63: Supermarket or supermarket used: for buying small electrical appliances and cookware/kitchenware, by detailed demographics*, 2009
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- Figure 64: Supermarket or supermarket used: for buying household linens/textiles, by detailed demographics*, 2009
- Figure 65: Supermarket or supermarket used: for buying DIY/gardening products, by detailed demographics*, 2009
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- Figure 66: Supermarket or supermarket used: for buying seasonal products, by detailed demographics*, 2009
- Figure 67: Supermarket or supermarket used: for buying baby and nursery equipment, toys and games, and sports and leisure, by detailed demographics*, 2009
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- Figure 68: Supermarkets used for browsing non-foods online and ordering online, by detailed demographics*, 2009
- Figure 69: Supermarkets used for browsing non-foods online and then buying in store, by detailed demographics*, 2009
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- Figure 70: Supermarkets used for browsing non-foods online but not buying, by detailed demographics*, 2009
- Figure 71: Number of types of non-food items bought at supermarkets/grocery stores in the last 12 months, by detailed demographics*, January 2009
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Appendix – Consumer Shopping Behaviour
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- Figure 72: Shopping behaviour when buying non-foods from grocery multiples, by detailed demographics*, 2009
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- Figure 73: Shopping behaviour when buying non-foods from grocery multiples, by detailed demographics*, 2009
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Appendix – Attitudes and Typologies
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- Figure 74: Agreement with statement: ‘It’s convenient to buy non-food products while grocery shopping‘, by detailed demographics*, 2009
- Figure 75: Agreement with statement: ‘It’s easier to buy non-food products at a supermarket than on the high street‘, by detailed demographics*, 2009
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- Figure 76: Agreement with statement: ‘It’s difficult to beat supermarkets on price ‘, by detailed demographics*, 2009
- Figure 77: Agreement with statement: ‘There’s a good range of non-food products to choose from ‘, by detailed demographics*, 2009
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- Figure 78: Agreement with statement: ‘Non-food products in supermarkets are poorly displayed or presented ‘, by detailed demographics*, 2009
- Figure 79: Agreement with statement: ‘I trust supermarket own-brand quality in non-food products ‘, by detailed demographics*, 2009
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- Figure 80: Agreement with statement: ‘Quality of own-brand non-food products isn’t that good ‘, by detailed demographics*, 2009
- Figure 81: Agreement with statement: ‘Supermarket staff often lack knowledge about non-food products ‘, by detailed demographics*, 2009
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- Figure 82: Agreement with statement: ‘I prefer to buy non-food products from a range of specialist shops ‘, by detailed demographics*, 2009
- Figure 83: Agreement with statement: ‘I like the longer opening hours of supermarkets ‘, by detailed demographics*, 2009
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- Figure 84: Agreement with statement: ‘I prefer shopping for non-food products in a department store ‘, 2009
- Figure 85: Agreement with statement: ‘I can get most things I need from a supermarket without going anywhere else ‘, by detailed demographics*, 2009
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- Figure 86: Consumer typologies, by detailed demographics*, January 2009
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