How are the discounters affecting the UK High St?

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We are talking to shopper across the channels

For this High St study, we spoke to shoppers, online, in November 2014:

We asked their general opinions and also feedback on their last visit to the following retailers (within 7 days of visit):

SupermarketsAsda 732Tesco 750Morrisons 750Sainsbury’s 750The Coop 500Budgens 100Waitrose 400Food DiscountersAldi 357Lidl 400Fixed price DiscountersPoundland 40099p Store 250Frozen SpecialistsIceland 396Farmfoods 250OtherWilkinsons 250 WHSmith 400Boots 400

NB They must have purchased less than 30 items on that visit (i.e. excluding ‘mega basket’ customer)

*not part of High St study but some comparisons included.

Our High St study – the objectives

• Aims to understand shopping trips, across the UK High St– Store repertoire– Drivers to store– Share of wallet

• We DON’T focus on the ‘mega baskets’ (over 30 items)

• We DO deep dive into a category understanding– Category drivers– Category perceptions

• And gain critical insights AT ACCOUNT LEVEL– Shopper behaviour– Shopper profiles– Price and value

Source: him! High St research 2014

% of UK adults who have visited in last 7 days

Source: him! High St research 2014

The way people grocery shop is evolving:19% (net) say they are visiting a larger no of retailers vs last year

Supermarkets

96%

Food discount

ers

41%

Convenience stores

71%

Variety discount

ers

30%

The omni-channel shopper

UK adults now use 3 different retailers in a typical week

What’s driving growth in Omni-channel shopping?

Growth in online• improved experience• become normalised / trusted

Growing standards of Discounters

• A new credible channel

Changing lifestyles & shopping habits• Poor economy led to price comparisons• Smaller, more frequent

Where has the Food Discounter growth come from?

They’re steadily attracting a larger & broader customer base

But ultimately, their growth comes from gaining a larger share of their customers wallet

Source: him! High St research 2014

Jul-13 Oct-13 Jul-14 Nov-14

19%22%

27%

46%

% of shoppers are Food Discounters who are on a ‘main shop’

Food discounter now OVER-index on upper-middle class shoppers

vs the UK population!

37% 2013

41% 2014

vs

Why are the discounters doing so well? Discounters are increasingly focusing on ‘quality’

More premium ranges messages – focused as much on ethics & quality of products as price

A simple price message

Lidl v Tesco

Source: him! High St research 2014

Why are the discounters doing so well? They’re introducing ‘premium’ and local ranges to attract a broader shopper base

Aldi selling "super premium" range of wines and spirits at heavily-reduced prices for

Christmas

Aldi focusing on ‘British’

Source: him! High St research 2014

4. Pre-wrapped bread

3. Chilled dairy

1. Fruit & veg

2. Packaged grocery

5. Frozen

Source: him! High St research 2014

Top categories bought at hard discounters

Why are the discounters doing so well? They’ve invested in fresh

Aldi’s award winning ‘Specially Selected’ own label range is very popular with shoppers

Why are the discounters doing so well? They’ve invested in ‘quality’ own label

Why are the discounters doing so well?People enjoy shopping in them!

Discounters

Supermarkets

Convenience store

46%

40%

30%

% who find shopping in the stores ‘enjoyable & stress-free’ No frills / easy to shop

policy (limited range)

Bursts of unusual product

Exciting WIGIG promotions & products

Feel good factor - everyone loves a bargain!

Source: him! High St research 2014

Voted the Christmas campaign most likely to actually affect shopping habits

Why are the discounters doing so well?They’re investing in building a trustworthy, approachable brand

Using humour to have light-hearted pokes at their competitors, and win trust.

Why are the discounters doing so well?Partly due to changing lifestyles & shopping habits

Source: him! High St research 2014

“The real issue for Tesco, Morrisons and Sainsbury’s is not so much the

discounters, it’s that people are shopping differently.

They want luxurious top-end food from around the world but then they are thrifty and

are looking for good value in pre-prepared food.”

Mark Price Waitrose’s MD

BUT supermarkets have started to ‘wake up’. Let the battle commence!

Source: him! High St research 2014

…2016 could be a very different year

© him! Ltd 2013. All rights reserved

For more information contact Molly.wilmot@him.uk.com

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