Seeing bigger picture of supermarket forces

NOP asked 1,000 adults, representing a cross-section of the UK ‘s population, about shopping for groceries in the preceding month. Nearly nine out of ten of the sample – 861 people – claimed to have done at least some of the household shopping; and 61 per cent were the main shoppers in their household. Most people had used at least two different supermarkets or grocers during that period.

More than 25 supermarket chains had been used in the preceding month – nine of them by ten per cent or more shoppers. Tesco and Sainsbury’s both attracted more than four out of ten shoppers, nearly twice as many as their nearest rivals, Asda and Safeway. KwikSave came fifth in the league, followed by the Co-op, Marks & Spencer, the Somerfield/Gateway group and finally Morrisons.

When looking at the store people use for the bulk of their grocery shopping, however, the picture changes dramatically. This core business is spread between far fewer stores, only seven of which achieve five per cent or more of market share between them. The top seven attract 86 per cent of shoppers. Tesco continues to occupy the top spot in terms of stores visited, and the rank order among the top five stores is maintained.

When comparing main destinations with total shopping destinations, the gap in share widens significantly between the top five and other supermarkets. This represents the majority of purchase and in turn indicates sterling value share. The Co-op, Morrisons and Gateway are the only chains to attain more than a four per cent nomination as the main shopping destination.

Marks & Spencer’s role as a top-up or occasional luxury shop is demonstrated by its fall from 13 per cent of shoppers using it in the past month, to a mere one per cent using it as their main supermarket.

The type of customers attracted to each store shows some interesting differences that cannot be explained by geographical distribution alone. Of the top five, Sainsbury’s attracts the highest proportion of upmarket shoppers – those with higher disposable incomes. Just over half of Sainsbury’s and Safeway shoppers come from the ABC1 grade, compared with just under half of Asda and Tesco users. By contrast, KwikSave takes 80 per cent of its shoppers from the C2DE grades. Age profiles show far less diversity between stores, although Sainsbury’s and Tesco are attracting a higher proportion of under-25s than the others, which must augur well for the growth of their business. The Co-op and KwikSave have a stronger appeal to over-60s.

When shoppers were asked to rate a list of reasons for choosing a particular store, a remarkable consensus emerged. Three factors – a good range of fresh food, the absence of long queues and prices as low, or lower, than other places – were seen as either very or quite important by more than four-fifths of all shoppers.

Twelve per cent of the shoppers rated the range of fresh food as more important than either checkout speed or low prices. This indicates that the attraction of supermarkets rests as much in their role as the one-stop replacement of the green-grocer and butcher, as on their supply of manufactured brands.

Stores’ own-label products and “the supply of new and interesting products” form the second rank of motives for choosing a store, with roughly half of shoppers giving them some degree of importance, while the availability of packers and loyalty cards attract only about a third.

Own-label quality and availability is usually linked to low basket prices and the demographic profiles of shoppers who set a high priority on these factors is very similar. However, Sainsbury’s shoppers, less motivated by low prices, are most appreciative of own brand, and this may tie in with their high interest in new and unusual products.

The low overall figure of saver cards changes when looking in detail at the customers of participating stores. Nearly two-thirds of Tesco and half of Safeway shoppers are, to some extent, swayed by their participation in a saver-card scheme. The Sainsbury’s card, launched in the week before our research, is exerting some influence on a third of users.

When shoppers are asked to select the most important factor influencing their choice of store, the picture changes again. Fresh food and low prices were each chosen by a third of respondents and annoyance at queuing dwindles noticeably, although 14 per cent still place the ability to get in and out of the store quickly above all other attractions.

The range of fresh food does have slightly more influence than the lure of low prices, since 21 per cent of shoppers gave this as their second most important reason for choosing a shop, compared with the 16 per cent selecting low prices.

These two dimensions form a complementary polarity in the market: upmarket and over-60s shoppers are more likely to go for fresh food, the downmarket and the under-25s for low prices. However, the balance also shifts between the different franchises: more Sainsbury’s, Safeway and Tesco shoppers put fresh food at the top of the list, whereas for Asda and KwikSave, this is displaced by low prices.