ShopperTrendsFood & Grocery Shopping

Case Study

Analyse the research findings for the 2006 Singapore Shopper Trends study, and recommend the course of action for each of the following retail chains:– Sheng Siong– Shop n Save– FairPrice

Your recommendations should be supported by the relevant research findings.

Research Methodology

City Coverage: Singapore Target Respondent: Males/females grocery shoppers aged

15-65 years Interview methodology: Face-to-face interviews Sampling method: Random sampling with quotas for age,

gender and race Sample size : 1,300 Fieldwork Period: 20th January to 3rd February 2006

Questionnaire length: 45 mins Weighting variables: Data weighted proportional to national

‘main grocery shopper’ statistics based on age / gender / location

Food & Grocery Shopping

> The ACNielsen Brand Equity Index produces scores in range of 0 to 10; the higher the better.

> Zero on this scale represents the lowest Index, meaning that a brand has no loyal customers,

and nobody would pay any more than the cheapest price on the market.

> Ten would be the highest Index, where everybody in the market is a loyal customer, and

would willingly pay a significant price premium.

> In competitive markets a score of 3+ is very strong.

0 103No-one’s favorite

No-one recommendsNo price premium

None willing to travel to store

Everyone’s favoriteEveryone recommendsPrice acceptable to all

All willing to travel to store

Store Equity Index

NTUC FairPrice

Sheng Siong Shop n Save Cold Storage Giant Carrefour

5.3

1.1 1.0 0.9 0.80.5

5.2

1.50.9 0.9 0.9

0.5

2005

2006

Base: All Supermarket / Hypermarket shoppers (n=905)

Supermarket / Hypermarket Store Equity Indices - 2005 vs 2006

Store equity of key chains

-13

11

2

-1

6

0

2

-2

-4

-5

5

12

-9

-4

2

-4

2

2

-1

0

-3

2

2

3

-3

-2

2

-2

15

-12

-3

19

-10

2

-15

-3

7

6

-6

-9

-2

10

% All Respondents

Race

Chinese

Malay

Others

Occupation:

PMEBs

Other White Collar

Student

Blue Collar

Housewives

Not working

Marital Status:

Single

Married/Others

No of people in HH:

1 - 3

4 - 5

6 +

69%

14%

17%

25%

19%

4%

23%

21%

7%

16%

84%

33%

51%

17%

Base: Those who visit store most often. FairPrice (n=563), Sheng Shiong (n=121), Shop n Save (n=98), Cold Storage (n=43), Giant (n=44)

-16

15

1

-15

4

-2

16

-3

1

-7

7

2

-5

3

Demographic profile of Shoppers

3

10

-12

0

0

4

3

-1

-4

-2

2

-13

-7

19

20

-10

-10

17

-1

3

-10

-8

-1

9

-9

8

-8

ShengSiong FairPrice

Cold Storage

Shop n Save Giant Carrefour

Numbers represent difference from profile of all respondents

0

0

0

-1

-2

2

1

-1

-1

0

1

44%

56%

8%

22%

13%

29%

28%

17%

57%

23%

3%

7

-7

-4

0

4

-6

6

6

9

-13

0

1

-1

1

7

2

-5

-5

-3

12

-8

-1

-3

3

4

2

1

0

-8

-13

-26

40

-1

% All Respondents

Numbers represent difference from profile of all respondents

Base: Those who visit store most often. FairPrice (n=563), Sheng Siong (n=121), Shop n Save (n=98), Cold Storage (n=43), Giant (n=44)

ShengSiong

FairPriceCold

StorageShop n Save

Gender:

Male

Female

Age:

Age 24 or less

25-34 years old

35-39 years old

40-49 years old

50-65 years old

Household Income

Low (up to S$2K)

Middle (S$2~6K)

High (above S$6K)

Not disclosed

Demographic profile of Shoppers

-7

7

7

-4

7

-7

-2

3

1

-1

-3

Giant

2

-2

5

5

1

-7

-3

-12

-1

14

Carrefour

63% of shoppers at Cold Storage are High Income shoppers; i.e., 40% points above the respondent population proportion (23%)

Recommenders

Preferrers

Dependables

Regulars

Considerers

Trialists

Aware

In customers repertoire

Use most often

The loyalty pyramid - FairPrice

achieving presence

providing relevance

ensuring performance

ensuring loyalty

% of respondents who are …

Salience

Relevance

Behavioural Loyalty

Emotional Loyalty

59

61

64

85

94

99

100 100

Unaided Aided

+1

+1

-2

-1

+1

P4W (Past 4 weeks)

+1: The proportion of respondents who recommend the store has increased by 1% points versus prior year

59

61

64

85

94

99

100

6

1

100

7

8

10

32

52

83

47

48

7

99

13

13

12

31

53

60

28

47

25

75

Recommenders (%)

Preferrers (%)

Dependables (%)

Regulars (%)

Considerers (%)

Trialists (%)

Aware (%)

Non considerers (%)

Too Hard to Get to (%)

Base: All Supermarket shoppers (n=905)

FairPrice Cold Storage

6

6

5

25

48

76

44

52

9

97

Sheng Siong Shop n Save

Food & Grocery Store Leverage

+1

+1

-2

-1

+7

+6

+12

+2

+3

+4

+5

+1

+6

-2

-1

+8

+2

+2

+1

+1

-6-2

-2

-12

Loyalty pyramid

Unaided, Aided Unaided, Aided Unaided, Aided Unaided, Aided

+1

Banner Image ratingtop 2 boxes (agree/strongly agree) rating for supermarket banners

FairPrice Sheng Siong Shop n Save Cold Storage Giant Carrefour

Convenient to get to 83.4 42.3 63.8 43.7 26.1 19.2

Close to home 83.8 42.5 64.1 43.8 26.4 16.8

Value for money 72.3 68.7 53.5 35.8 52.0 28.0

Attractive and Interesting promotion 77.3 69.1 60.8 36.7 55.5 21.2

Low prices for most items 70.7 76.9 55.5 19.4 55.8 10.4

Own brands as a good alternative 75.4 27.6 44.9 46.8 49.3 25.6

Always have what I want in stock 59.7 44.7 44.0 49.3 46.2 76.7

One stop shop 60.9 50.7 43.0 48.5 46.3 60.9

Well presented product display 58.4 34.3 44.9 56.4 45.2 80.8

Modern and comfortable store 59.5 29.8 39.1 60.7 46.6 76.0

Better selection of quality products 53.1 27.6 36.4 54.9 41.9 74.8

Wide product range and variety 56.5 45.6 40.2 52.4 44.7 58.9

Spacious 51.7 32.3 34.6 51.3 52.7 60.9

Easy to find what I need 62.3 46.5 50.4 52.5 44.9 48.9

Staff provide good service 64.5 39.6 44.1 59.2 40.5 58.8

Loyalty program 82.4 31.4 49.9 39.4 46.0 26.6

Ease of parking 54.1 36.2 39.4 48.0 43.7 54.7

Efficient checkout counter 51.8 42.5 42.3 52.4 43.5 72.3

Good range and fresh products 65.9 40.1 46.1 57.3 45.3 58.1

High quality fresh food 63.9 36.0 44.2 61.2 43.2 60.5

Clean and hygienic store 61.5 31.3 42.2 56.2 46.0 82.3

Good quality instant cooked food 54.5 39.4 39.8 52.7 44.1 45.2

100

21

19

16

15

10

2005

100

17

25

22

13

9

2004

NTUC Fair Price

Giant

Shop n Save

Cold Storage

Sheng Siong

Carrefour

100

15

27

25

12

10

Regular FairPrice shoppers who also shop regularly at other chains

2003

Past 4 Weeks Used Stores

100

22

24

24

22

11

Chart Title

2006

FairPrice shoppers – Store repertoire

FairPrice

• Faced with hyperinflation during the 1973 oil crisis, the National Trades Union Congress launched NTUC Welcome, a supermarket co-operative to contain prices of essential food products. This initiative was strongly supported by the government and the then Prime Minister Lee Kuan Yew officially opened NTUC Welcome• NTUC Welcome was later renamed

FairPrice• FairPrice continues with its original

social mission to help moderate cost of living for low income households • FairPrice has been experiencing rapid

growth as shoppers migrate from lower to the upper trade. (Share of Singapore’s lower trade had shrunk from over 60% in 1996 to about 20% in 2006)• Large base of members (50% of homes)

who benefit from loyalty programs

Provides own brands as a good alternative to the

main brandsEase of parkingAttractive and interesting

promotionsGood quality instant cooked foods

High quality fresh food

Low prices for most itemsGood range of fresh

productsClean and hygienic store

SpaciousHas programs that reward regular pur-

chaseWide product range and variety

Convenient to get to

Good value for moneyStaff provide good

serviceEasy to find productsEverything I need in the

one storeBetter selection of high quality brands and

productsModern and comfortable storeEfficient checkout coun-ters

Close to homeWell presented display of

productsAlways have what I want in stock

7

6

5

5

4

3

3

2

2

1

1

-1

-1

-1

-1

-1

-1

-2

-2

-3

-3

-4

FairPrice – Image Associations. Percent Points change in rating versus 2005

Improve

Maintain

Decline

FairPrice – Image Associations SCORE CARD Change Vs Last Year

Base: All shoppers who shop regularly at FairPrice

Shop n Save

• Acquired by Dairy Farm International (DFI) in 2003• G-Value, another DFI chain, re-

branded Shop n Save in 2005, taking the store count of the newly acquired chain from 35 to 46 stores• SnS stores located at high traffic

locations• SnS not as profitable as some of

DFI’s other assets

Recommenders (%)

Preferrers (%)

Dependables (%)

Regulars (%)

Considerers (%)

Trialists (%)

Aware (%)

Non considerers (%)

Too Hard to Get to (%)

Shop n Save – loyalty pyramid – 2002 to 2006

7

7

8

30

56

83

45

44

15

97

4

4

5

26

42

78

38

58

8

96

2003 2004

6

7

8

24

50

81

44

50

9

98

2005

7

8

10

32

52

83

10

48

7

99

2006

Shop n Save: Store Interaction measures and store count

Stores

Series1

35 3546 46

G-Value

NOTE: Eleven G-Value stores were re-branded as Shop n Save in 2005

Unaided, Aided Unaided, Aided Unaided, Aided Unaided, Aided

Convenient to get to

Attractive and interesting promotions

Ease of parking

Close to home

Low prices for most items

Easy to find productsHas programs that reward regular

purchaseHigh quality fresh food

Good range of fresh productsProvides own brands as a good al-

ternative to the main brandsBetter selection of high quality brands and products

Efficient checkout counters

Well presented display of products

Good quality instant cooked foods

Spacious

Good value for money

Clean and hygienic store

Wide product range and variety

Always have what I want in stock

Modern and comfortable store

Staff provide good service

Everything I need in the one store

5

5

5

4

4

4

3

3

2

2

0

0

-1

-1

-1

-4

-4

-5

-6

-7

-8

-10

Base: All shoppers who shop regularly at Shop n Save

Shop n Save – Image AssociationsPercent Points change in rating versus 2005

Improve

Maintain

Decline

Shop n Save – Image Associations SCORE CARD Change Vs Last Year

Performance = % top two boxes out of

5 scale

Convenient to get toClose to home

Good value for money

Staff provide good service

Low prices for most items

Has programs that reward regular purchase

Easy to find products

Attractive and interesting promotions

Good range of fresh products

Everything I need in the one store

Always have what I want in stockProvides own brands as a good alternative to the main brands

Wide product range and variety

Well presented display of products

High quality fresh food

Better selection of high quality brands and products

Clean and hygienic store

Modern and comfortable store

Ease of parking

Good quality instant cooked foods

Efficient checkout counters

Spacious

0

25

50

75

100

NTUC Fair Price

Shop n Save

Image Profile Analysis - Key Food & Grocery Retailers

Shop n Save and FairPrice: Image ratings

Most Least

Relative Importance

Base: Respondents who shop regularly at store

Image Profile Analysis - Key Food & Grocery Retailers

Performance = % top two boxes out of

5 scale

Cold Storage, Sheng Siong and FairPrice – Image Ratings

Convenient to get toClose to home

Good value for money

Staff provide good service

Low prices for most items

Has programs that reward regular purchase

Easy to find products

Attractive and interesting promotions

Good range of fresh products

Everything I need in the one store

Always have what I want in stockProvides own brands as a good alternative to the main brands

Wide product range and variety

Well presented display of products

High quality fresh food

Better selection of high quality brands and products

Clean and hygienic store

Modern and comfortable store

Ease of parking

Good quality instant cooked foods

Efficient checkout counters

Spacious

0

25

50

75

100

NTUC Fair Price

Cold Storage

Sheng Siong

Most Least

Relative Importance

Base: Respondents who shop regularly at store

Sheng Siong

• Founded in 1985• Lim Hock Chee was the key thinker,

strategist and showman at Sheng Siong• Low price strategy through cost control

1. Lowest cost structure2. Low overheads3. Low rent locations4. Low wage structure5. Sourcing from lowest cost suppliers6. No frills merchandising / shop environment

• In 2005, operated 16 supermarkets and 1 hypermarket located mainly in neighbourhood suburbs• Invests in logistics and IT. Robust

electronic procurement system

Attractive and interesting promotionsLow prices for most itemsConvenient to

get toEfficient checkout countersEasy to find

productsGood range of fresh products

Good quality instant

cooked foodsClose to homeWell pre-

sented display of products

Better selec-tion of high

quality brands and products

Clean and hygienic storeEverything I need in the one store

Modern and comfortable

storeEase of park-ingHigh quality

fresh foodGood value for moneyWide product

range and va-rietyStaff provide

good serviceHas programs

that reward regular pur-

chaseSpaciousAlways have what I want in

stock

Provides own brands as a

good alterna-tive to the

main brands

16

8

7

6

5

3

3

2

2

2

2

1

1

1

0

-1

-1

-2

-2

-3

-4

-4

Sheng Siong – Image Associations. Percent Points change in rating versus 2005

Improve

Maintain

Decline

Sheng Siong – Image Associations SCORE CARD Change Vs Last Year

Base: All shoppers who shop regularly at Sheng Siong

Lowest Priced Supermarket / Hypermarket Stores (Perceived)

% o

f res

pond

ents

Base: All supermarket/Hypermarket Respondents (N=866)

NTUC FairPrice

Sheng Siong Giant Shop n Save Carrefour Cold Storage

57

17

95

2 2

53

20

107

3 2

50

27

8 73 2

2004 2005 2006

Perception on lowest priceQ: Which store offers lowest price for your favourite food and

grocery brands?

Sheng Siong

Shop n Save

FairPrice