quality at the right price - progressive.bgconference.progressive.bg/archive/2017/assets/pdf... ·...

Copyright © 2017 The Nielsen Company. Confidential and proprietary.

Angelos Georgiou18 May 2017

QUALITY AT THE RIGHT PRICEIn the Bulgarian consumer’s mind

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NEW SLIDE CHANNEL PERFORMANCE

Source: Nielsen RMS. Data ending DJ’2016Included are all NON FOOD categories currently in audit and with two years of data availability.


THE BULGARIAN MARKET IS PRICE SENSITIVE……

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-0.5%

1.6%

0.1%-0.9%

-0.8%

-0.1%

1.5%1.3%

1.4%2.4%

1.1%

2.0%

3.8%

2.8%

1.1%

1.6%1.1% 1.1%2.0%

2.7%

2.0%

2.9%

2.0%

1.1%

3.1%

2.5% 2.5%

2015 2016 Aug-Dec 14 Dec-Apr 15 Apr-Aug 15 Aug-Dec 15 Dec-Apr 16 Apr-Aug 16 Aug-Dec 16-2%

-1%

0%

1%

2%

3%

4%

5%

Volume change Price change Value change

Source: Nielsen Retail Index Bulgaria

VOLUME IS HIGHLY ELASTIC TO PRICE INCREASES

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9% 15% 18%

40%41% 42%

46% 39% 35%

4% 5% 6%

2014 2015 2016

I don't know about or notice the prices of grocery items

I don't necessarily know all the prices but I generally notice when the price changes

I know the prices of most of the items and always notice when the price changes

I know all the prices of the grocery items I buy regularly

Source: Nielsen Shopper Trends Survey 2016-17

.. AND EVERY YEAR SHOPPERS ARE MORE AND MORE ACTIVELY RESEARCHING PRICES

Preview from Shopper Trends

2017 results

See you on 28.6 at Holiday Inn!

49%60%

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21

39

26

-18

-23

-15

BELARUS

BULGARIA

SERBIA

Food Categories 2016Promoted Sales, % Avg Discount, %

56

37

39

-18

-27

-20

BELARUS

BULGARIA

SERBIA

Drug Categories 2016Promoted Sales, % Avg Discount, %

Source: Nielsen Promo Pressure databases 2016

BULGARIA IS ALSO A MARKET WHERE THE PROMO LEVELS FOR PACKED PRODUCTS ARE SIMILAR TO WESTERN EUROPE STANDARDS & DISCOUNTS ARE GENEROUS

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AGGRESSIVE PROMOTIONS HAVE “TRAINED” SHOPPERS TO BECOME BARGAIN HUNTERS. OPPORTUNISTIC SHOPPING ON THE RISE

8% 7% 10%

16% 22%

34%18%

23%

15%

42%34%

27%

16% 14% 14%

2014 2015 2016

Promotion rarely change my brand choices

I only buy promotions when I already like the brand

I regularly buy different brands because of promotions

I very seldom change stores, but when shopping, I actively search for promotions

I change stores based on which one I think has the best promotions that trip

Source: Nielsen Shopper Trends Survey 2016-17

42%59%

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GERMANY

ITALYPOLAND

SLOVAKIA

SPAINUK

0%

10%

20%

30%

40%

50%

60%

70%

80%

0% 10% 20% 30% 40% 50% 60%

Prom

o Ef

fect

iven

ess

Inde

x Va

l.

% Value sold on Promotion

AROUND HALF OF THE PROMOTIONS IN EUROPE DO NOT ADD INCREMENTAL VALUE TO THE CATEGORY OR BRAND

What % of promoted sales delivers incremental value in 2016?

Source: Nielsen European Promo Effectiveness study

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…. BUT THERE IS STILL ROOM FOR QUALITY!

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A PREMIUM PRODUCT IS ONE THAT PROVIDES SPECIAL, ENHANCED OR EXCLUSIVE BENEFITS. WHAT MAKES A PRODUCT PREMIUM TO YOU? BULGARIA RESPONDENTS

66

45

43

42

37

33

28

25

19

18

12

6

It's made with high-quality materials or ingredients

It provides superior customer experience

It offers superior function or performance

It offers or does something no other product provides

It's handcrafted or made using artisanal methods

It's from a location known for superior quality (such as Swiss chocolate, Italian leather, French wine, etc.)

It has superior style or design

It's from a well-known or trusted brand

It's hard to find/scarce

It's only available to people of a certain status/exclusivity

It's expensive

Other

%

Source: Nielsen Global survey on Premiumisation (2016)

QUALITY OF RAW MATERIALS OR INGREDIENTS IS THE MAIN FACTOR THAT DEFINES A PRODUCT AS PREMIUM

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. 45%38% 38% 34% 30%

14%

45%44% 45% 52% 55%

59%

10% 19% 17% 13% 15%27%

Bulgaria Lithuania Ukraine Croatia Slovakia Czech Republic

Not Willing

Somewhat Willing

Highly Willing

BULGARIAN SHOPPERS ARE MORE WILLING THAN THOSE IN OTHER E.E. MARKETS TO PAY MORE FOR PRODUCTS WITH PREMIUM ATTRIBUTES


WILLINGNESS TO PAY MORE FOR PREMIUM PRODUCTS

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52%

52%

50%

49%

47%

45%

Meat or seafood

Dairy products

Clothing/shoes

Personal electronics

Oral Care

Laundry detergent

33%

31%

29%

27%

24%

23%

Meat or seafood

Clothing/shoes

Personal electronics (computer, mobile phone etc)

Coffee/tea

Dairy products (milk, cheese, yogurt, etc.)

Hair Care (shampoo/conditioner)


MEAT AND SEA FOOD, AS WELL AS, DAIRY PRODUCTS ARE THE CATEGORIES WHERE BULGARIANS ARE MORE WILLING TO TRADE UP FOR QUALITY

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DETERGENTS

TOILET PAPER DRY

SHAMPOOS

FACE CARE

BABY DIAPERS

SANITARY PROTECTION

DEODORANTS

TOOTHPASTE

HAIR COLOURANTS

TOILET SOAPS

-4%

-2%

0%

2%

4%

6%

8%

10%

-4% -2% 0% 2% 4% 6% 8% 10% 12%

Top Drug Categories

Volume Change

Value Change

Source: Nielsen Retail Index Bulgaria (MAT March 2017)

HIGHER AVERAGE PRICE IN CERTAIN DRUG CATEGORIES IS DRIVEN BY TRADING UP

Over the last 3 years

Value sales Grocery stores: +5%

Value sales specialised stores: +25%

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Source: Nielsen Retail Index Bulgaria (2016)

10% & 14%Growth rate

(Value & Volume)

5.4%Share: TTL

Coffee

21.0%Share: Ground

Coffee

COFFEE PODS (CAPSULES) IS AN EXAMPLE OF A PRODUCT THAT CONSUMERS PERCEIVED AS WORTH PAYING A PRICE PREMIUM FOR

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RETAILERS CONSTANTLY ENRICH THEIR PREMIUM OR SPECIALIZED PRIVATE LABEL ASSORTMENT

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TO FIGHT LOSSES TO DISCOUNTERS, TESCO INTRODUCED FARM BRANDS IN MARCH - A VALUE PRIVATE LABEL RANGE FOR FRESH COVERING DAIRY, DELICATESSEN, FROZEN, FRESH AND MFP.

49.5% penetration

Worth 4.5% of Tesco PL

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MEGA IMAGE NEW STORE (ROMANIA) IS CLEARLY OFFERING A SUPERIOR CUSTOMER EXPERIENCE

• Mega Image (Ahold Delhaize) new supermarket in Bucharest.• The Focus is on premium. Large wine and cheese humidors.• Also focused on organic and healthy living ranges and local as differentiators.


CONCLUDING…….

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COMPARED TO THE SAME TIME FIVE YEARS AGO, ARE YOU SPENDING MORE, LESS OR ABOUT THE SAME ON THE FOLLOWING CATEGORIESBULGARIA

29

26

17

31

22

29

6

50

34

13

27

32

32

24

27

28

24

17

16

19

15

18

34

25

44

26

23

28

20

33

45

19

47

5

17

14

16

28

18

58

1

2

53

8

Clothing

Entertainment/leisure activities

Video/music/Internet services

Travel

Dining out

Home improvements/decorating

Utilities

Groceries

Household goods

Rent/mortgage

Healthcare

%

Spending more money Spending less money

Spending about the same amount of money I do not spend on this category


ALTHOUGH FMCG PRICES HAVE BEEN RATHER STABLE, SHOPPERS ARE SPENDING MORE ON FMCG PRODUCTS

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LOOKING FORWARD

2012 2013 2014 2015

1 2 3 4

Price sensitivity is a strong aspect of the local market and this is unlikely to change as shoppers are getting more “pragmatic”

41

However experience has shown that when a product’s or service’s quality deserves a higher price, shoppers will go for it

Retailers have to work on the assortment of the categories where people are more willing to trade up (e.g. fresh, dairy, specific drug categories)

But quality is not only ingredients: It is also customer experience, innovation, packaging etc……


THANK YOU FOR YOUR ATTENTION!

quality at the right price - progressive.bgconference.progressive.bg/archive/2017/assets/pdf... ·...

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