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Tesco Wins Market Share For First Time In Five Years
The latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 9 October 2016, show Tesco increasing sales by 1.3% – marking a return to growth for the UK’s largest retailer for the first time since March 2015. Tesco has grown ahead of the overall market, where sales increased by 0.8% on last year.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, comments: “Foods including ready meals and produce have been among the fastest growing areas at Tesco, helped by its ‘Farm Brands’ but also its standard own label lines. Tesco has attracted a further 228,000 shoppers through its doors to help the grocer grow to a 28.2% share of the market – its first year-on-year market share gain since 2011. Sales growth has been strongest among family shoppers, while improved trading from its larger supermarket and Extra stores has supported this month’s gains.
“While the threat of rising prices is on a lot of minds at the moment, we’ve seen the 27th consecutive period of grocery price deflation, albeit at a slower rate. The price of everyday groceries fell by 0.8% compared with a year ago and in contrast to the -1.1% reported last month, with deflation particularly noticeable among pork, crisps and poultry products.”
Other retailers winning market share this month include Iceland, Co-op and Waitrose. Iceland increased sales by 6.9% with success across the store, not just in its core frozen lines which this period accounted for only 41% of sales. Chilled and ambient grocery sales also grew, as did Iceland’s branded soft drink and frozen ready meal lines, and market share rose by 0.1 percentage points to 2.1% as a result.
Co-op recorded its 17th consecutive 12 weeks of growth this period. Fraser McKevitt comments: “Co-op’s sales are up by 3.1% compared to a year ago, taking share up to 6.5% of the market. Consumers are continuing to buy from Co-op stores more frequently with the average shopper now visiting almost twice a week – an 8% increase. The convenience retailer is responding to challenges from the wider market by focusing on its own label lines, with its re-launched membership card rewarding shoppers who choose Co-op’s own products.”
At Sainsbury’s sales fell by 0.4%, while Morrisons continues to feel the effects of a smaller store portfolio with sales down by 3.0%. The re-launch of its ‘The Best’ range has had a positive impact on its premium own label sales, which increased by 6%. There was a similar picture at Asda where sales were down by 5.2% – its slowest rate of decline for four months – despite a premium own label sales increase of 8%.
Waitrose is still enjoying a sales uplift from its September half price event, with sales growing by 3.5% and contributing to a market share increase of 0.2 percentage points to a total of 5.4%.
At Aldi sales increased by 11.4% while at Lidl they grew by 8.4%, taking market share up to 6.2% and 4.6% respectively and maintaining the combined market share high of 10.8% which the two retailers achieved last month.
Item last updated: Wednesday September 21 2016 02:29
Millennials Lead the Online Grocery Shopping Revolution in Europe
While physical grocery stores have long been king in Europe, it seems like Millennials are now leading the online grocery shopping revolution on the continent, as they increasingly opt for the stress-free and time saving convenience of online shopping.
Indeed, new research from Mintel finds that almost half (45%) of Germans aged 16 to 24 have shopped online for groceries from a retailer with physical stores in the six months prior to the survey*, compared to only 31% of Germans overall.
Albeit not on the same scale, this divide is mirrored in other key European markets. In Spain, 46% of consumers aged 16 to 24 have shopped online for groceries from a retailer with physical stores, compared to 40% of consumers overall. In Poland, 44% of 16 to 24 year olds, compared to 41% overall, in France 33%, compared to 29%.
When asked about the reasons for doing their grocery shopping online, avoiding stress seems to play a major role for Millennials. According to the research, 36% of German, 31% of French, 29% of Spanish and 28% of Italian shoppers** aged 16 to 24 find online shopping less stressful than shopping in-store.
While avoiding stress is a priority, saving time is also one of the top reasons why Millennials choose to shop for groceries online. Around a third of German (34%), Italian (33%), French (29%), Polish (28%) and Spanish (27%) shoppers aged 16 to 24 agree it takes less time to do a shop online compared with in-store.
Moreover, one out of three German (30%), French (29%) and Polish (27%) shoppers aged 16 to 24 finds it easier to stick to a budget when shopping for groceries online.
Regina Haydon, Food & Drink Analyst at Mintel, says:
“Outside of the UK market, Europe's online grocery market is still in its infancy, but it is growing fast as young consumers increasingly opt for the stress-free and time saving convenience of online shopping. More and more retailers and speciality players are pushing into the channel to stay connected with the younger generation, promising a bright future for the online market at a time when connectivity and on-demand are playing an ever more important role in youth culture.”
However, many Millennials in key European markets are still harbouring doubts about the quality and freshness of groceries bought online. In fact, when asked about the reasons for not using online services when shopping for groceries, 51% of Polish and 50% of German shoppers*** aged 16 to 24 say they are concerned about the quality or freshness of products.
This view is supported by Millennials in other key European markets: 41% of Spanish, 39% of Italian and 30% of French shoppers aged 16 to 24 voice similar concerns.
Not being able to select the products in person is also barrier for online grocery shopping, as 62% of Spanish, 49% of Italian, 48% of Polish and 41% of German shoppers aged 16 to 24 don't like the fact that they are not able to choose products in person.
Minimum amount and delivery time the biggest hurdles in Germany
Spending extra money seems to be a problem in particular for thrifty Germans, as 47% of German shoppers aged 16 to 24 say they don't like having to spend a minimum amount, while only 33% of Spanish, 25% of Polish, 23% of Italian and 19% of French consumers of the same age group agree.
Germans also seem to be the most impatient with home delivery, as almost two out of five (37%) German shoppers aged 16 to 24 say they currently aren't shopping for groceries online as they don't like having to wait for delivery. In comparison, only 21% of Polish, 19% of French, 18% of Spanish and 16% of Italian 16 to 24 year olds see this as a problem.
“Online grocery has had a tough start in Germany, which is owed in part to the country's particularly high density of food stores and the dominance of discounters Aldi and Lidl, who have little incentive to push high-cost deliveries considering their already thin margins. However, consumers are growing accustomed to the benefits of digital in other retail settings and are beginning to expect them in grocery as well,” Regina adds.
But overall habit remains the biggest reason why European Millennials don't shop for groceries online. According to Mintel research, over half of Polish (55%), Italian (55%), German (53%), Spanish (51%) and French (50%) shoppers aged 16 to 24 say they don't shop for groceries online as they prefer to shop the way they are used to.
This is one of the reasons why physical stores are still so popular among European Millennials, with 97% of German, 97% of Italian, 95% of Spanish, 94% of Polish and 87% of French shoppers aged 16 to 24 having shopped in-store at a supermarket for groceries in the six month period prior to the Mintel survey.
Similarly, 95% of German, 92% of Polish, 90% of Spanish, 79% of Italian and 71% of French 16 to 24 year olds have shopped in-store at discounters such as Aldi or Lidl.
“While Europeans are gradually embracing online grocery shopping, there are still a significant number of consumers across major European markets who prefer to shop the way they are used to. The freshness of the products and lack of ability to choose products themselves is an important factor behind consumers not choosing online grocery shopping. This needs to be addressed by retailers by putting extra efforts into delivering the freshest products and possibly cutting delivery time,” Regina concludes.
Item last updated: Wednesday September 21 2016 02:29
Brits Toast Sporting Success As Grocery Sales Grow
The latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 11 September 2016 show that despite continued deflation of 1.1%, supermarket sales increased by 0.3% with particular growth in alcohol as shoppers celebrated Britain’s summer of sporting success.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, comments: “While overall sales growth has been slow, consumers have been keen to celebrate Britain’s Olympic and Paralympic golden summer, boosting alcohol sales by 8.5% in the past four weeks. Sparkling wines including Prosecco and Champagne led the way with growth of 36.0% as promotional events across a number of retailers successfully tapped into the nation’s celebratory mood.
“Tesco’s summer ‘Drinks Festival’ helped grow its alcohol sales faster than any other major category, and while the retailer’s sales have not yet returned to growth, a decline of 0.2% year-on-year is its best performance since March 2014. This period its Extra and larger stores delivered a positive contribution to performance, though market share fell back by 0.1 percentage points and Tesco now accounts for 28.1% of the overall grocery market.”
Fraser McKevitt continues: “Waitrose sales increased by 3.4% on last year, helping the retailer reach a new record market share of 5.3%. It’s ‘Half Price Event’ boosted performance across much of the store – particularly in household and alcohol. However the increase in sales has come at a cost, with Waitrose’s proportion of promotional sales reaching a higher level than some of the traditionally more promotion-focused ‘big four’ retailers.
“Co-op continues to outperform the market with sales growth of 3.1%, primarily through its own label lines. The convenience retailer was another to post strong alcohol sales, though its produce lines were its fastest growing category, helping market share increase to 6.6%.”
Iceland’s recent run of success continues as sales grew by 6.3% compared with a year ago, with its core ice cream and frozen fish categories particularly over-performing. At Sainsbury’s sales fell by 1.4%, as Fraser McKevitt explains: “Overall prices have fallen at Sainsbury’s, as have its levels of promotional activity as it continues to roll out its simpler pricing strategy. Meanwhile, after posting like-for-like growth in last week’s trading update for the first half of 2016, Morrisons’ market share fell by 0.3 percentage points to 10.4%, reflecting its reduced store portfolio. Online sales are becoming more important for the grocer, with shopper numbers up by 45% on last year.
Aldi and Lidl continue to grow – not only are both continuing to expand their store estates but existing customers are visiting more frequently and upping their basket size. The discounters are helping drive the industry-wide growth in premium own-label lines, with marketing campaigns moving away from showcasing only price to a focus on quality – collectively, premium own label grew by 29.5% in the discounters this period. Shoppers now spend an average of £19.24 when visiting the discount retailers and at a time of falling prices this increase of 4% is not to be sniffed at.”
Lidl reached a market share high of 4.6% this period having grown by 9.5%, while Aldi increased sales by 11.6%.
Item last updated: Wednesday September 21 2016 02:29