Sainsbury’s plans to launch a non-food line and is considering introducing standalone non-food stores. The move brings the supermarket into line with its rivals and reflects the current preoccupation with an extensive product range to attract new consumers.
But according to a Claritas National Shoppers Survey, 34 per cent of consumers now do their weekly food shop at one of the second-tier supermarkets, which include a wide range of discounters, smaller multiples and convenience stores.
There are a number of reasons why shoppers are filling their baskets at these types of stores, from the Co-op, Lidl, and Netto to Marks & Spencer and Waitrose. Convenience is one of two key priorities that consumers say affect their shopping habits – the survey shows that just under 46 per cent of consumers regard this as important. Price is the other main influence, with 35 per cent saying it is a major contributor to deciding where they shop. Proximity of the store follows close behind, with 32.5 per cent of consumers naming it as a key reason.
Only 7.9 per cent of consumers choose to shop in a store because they hold a loyalty card for it, and only 2.8 per cent claim to be influenced by customer services. Perhaps most surprisingly – and bad news for Sainsbury’s considering its latest move – just 0.5 per cent claim to be influenced by a store’s range of non-food products. This means that only the shoppers that continue to use the major multiples expect a diverse product range, suggesting that the battle for market share is limited to that group of consumers only.
Housewives and pensioners are often considered to be the most cost-conscious, but the survey shows that consumers aged between 18 to 25 are most likely to use the major discount stores such as Farm Foods, Netto and Iceland. Although keeping costs down is important to older shoppers other factors, such as accessibility, are more influential in the shopping habits. For instance, consumers aged 65 and over make up 31.3 per cent of KwikSave’s customer base – a store with a strong high-street presence – but just 19.3 per cent of Netto’s consumers. Netto is often located out of town and frequently requires consumers to have their own transport to get to there.
The demand for high service levels varies depending on which store the consumer is using. Customers of KwikSave, Lidl and Netto rate it as the least important, at Iceland and Spar it has some appeal, and consumers of stores such as M&S and Waitrose rate it very highly.
When it comes to convenience, Mace/Spar/VG and the Co-op lead the way, while the big discounters and quality stores attract a less than average number of consumers for this reason. The survey shows a strong correlation between price-led shopping and those looking for convenience and in most cases the two go hand in hand. But, the Co-op stands alone with over a third more of its shoppers than the average being most interested in convenience, while almost half the average are driven by price.
Distance is also a key factor for Budgen, the Co-op, Gateway, Mace/ Spar/VG and KwikSave customers. Their customers are over 20 per cent more likely to consider locality first. At the opposite end of the scale, with customers least concerned with location, are M&S, Lidl and Netto.
Customer demographics vary across the range of stores. About 38 per cent of consumers who shop at Iceland and Netto have children while just 10.4 per cent of M&S and 12 per cent of Spar consumers have children. Age is also a key factor. The youngest age group, 18- to 24-year-olds, are most likely to shop at Farm Goods, Iceland and Netto and are most unlikely to be found in the aisles of M&S, Waitrose, Mace/ Spar/VG or the Co-op. It’s a more level playing field, however, for the 25- to 54-year-old age group, with little over or under representation for any of these stores. The report shows significantly more segmentation among those aged 65 and over, with Budgen, the Co-op, Gateway, KwikSave, M&S, Mace/ Spar/VG and Waitrose all scoring highly.
There is a predictable link between income and which store a consumer chooses. Budgen, the Co-op, Farm Foods, Somerfield, Iceland, KwikSave, Lidl, Mace and Netto attract a higher proportion of low income earners bringing in less than £10,000 a year. M&S and Waitrose customers top the income table – 12.8 per cent of M&S customers earn more than £50,000 a year. Nearly 40 per cent of Waitrose customers earn over £35,000.
The report clearly shows that while the big supermarket chains appeal to our need for choice, there is a significant market catering for other tastes. The traditional concept of the corner shop may be under threat, but in its place are a wide range of multi-outlet stores that have the right combination of price, convenience and customer service to prosper in the long term.