tomorrow’s food shopper verdict consulting. agenda what we’ll talk about 123 what we’ve got...
TRANSCRIPT
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Tomorrow’s food shopperVerdict Consulting
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Agenda
What we’ll talk about
1 2 3what we’ve
gothow we
shopwhat itmeans
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But first
A short story…
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1
what we’ve got
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What we’ve got
A squeeze
incomings outgoings
prices
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What we’ve got
The impact
Before recession(2007)
During recession(2009)
After recession(2011)
Disposable
£29,982Disposable
£29,625Disposable
£29,005
Discretionary
£9,301Discretionary
£12,903Discretionary
£8,788
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lack money
I can’t spend
lack willI won’t spend
lack spontaneity
I think, then spend
What we’ve got
Changing mindsets
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1.6%
1.8%
2.4%2.7%
2.9%
2010 2011 2012 2013 2014
2.8%
2015
What we’ve got
Total retail spending growth
Total retail consumer spending growth
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1.3% 1.7% 0.9% 0.8% 0.6%
0.3%
0.1% 1.5% 1.9% 2.3%1.6%
1.8%
2.4%2.7%
2.9%
Inflation growth
Volume growth
0.4%
2.6%
2.8%
2010 2011 2012 2013 2014 2015
What we’ve got
Volume and inflation
Total retail consumer spending growth
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2.4%
+3.9% +4.0%
ClothingTotal Beauty
+3.4%
Food
+0.7%
Furniture
+0.6+0.6
ElectricalsHomewares
+0.4
DIY
What we’ve got
Sector growth
Average annual growth (2010-15)
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What we’ve got
Food and grocery growth
Food and grocery growth (inflation and volume)
6.4
4.5
2.43.2 3.0 2.9 2.7
-0.9
0.9
1.10.6 0.7 0.5 0.6
2008 2009 2010 2011 2012 2013 2014
Inflation growth
Volume growth
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2
how we shop
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How we shop
Price sensitivity
42.1
48.7
44.9 45.8
48.6
50.9
47.1 46.8
42.6 42.1
48.247.3 48.0
30
35
40
45
50
55
60
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Percentage of food consumers mentioning price as a driver of store choice
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How we shop
Price sensitivity links
Annual change in inflation and in price as a driver of store choice
Food inflationPrice mentions as driver Real household disposable income
-0.3
-4.2
-0.5 -0.9
0.7
6.1
-6
-4
-2
0
2
4
6
8
2005 2006 2007 2008 2009 2010 2011
0.4
2.13.0
4.5
2.43.2
6.4
2.01.5
0.41.1 1.1
-0.5-1.5
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How we shop
Price more important
Forecast of price sensitivity for this year
2007 2008 2009 2010 2011
42.1% 48.2% 47.3% 48.0% 50.5%
Food inflation Real household disposable income
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How we shop
Dynamics of sensitivity
Differences in those concerned about price (2003 v 2010)
2003 2010
24.6%
9.8%
32.2%
22.5%
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How we shop
It’s not all bad news
Factors driving demand
Cinemaattendance
Pubgoing
Diningout
Foreignholidays
UKholidays
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How we shop
The premium honeypot
Growth segments in food retail (2011 to 2012)
Premium Mainstream Value
6.7%
2.2%
5.1%
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How we shop
The premium honeypot
Competitors will put effort behind ‘best’
(5%) (20%) (16%)
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How we shop
It’s easier to go down, than to go up
What do attributes mean?
Price Quality
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How we shop
The great balancing act
The parable of Neil’s shopping trip (based on a true story)
What Neil wanted What Neil also purchased
£21.94 £42.69
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How we shop
In a nutshell
Constrained Frugal Save money Trade up
Market share
Volume
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3
what it means
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What it means
Everyday value
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What it means
Innovation
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What it means
Clarity
Layouts
Ranges
Promotions
Stores
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What it means
Segmentation
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What it means
Stimulation
Customer shares over Christmas 2010
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level Players operating at this level Usual shop Xmas shop
3.6% 6.9%
16.9% 15.5%
37.1% 34.7%
35.7% 33.4%
1.5% 1.6%
4.1% 3.2%
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What it means
The recipe for success
Empathy Editing Emotion Excitement
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the end