Over 1/2 of the country now shop in a discounter with big four continuing to lose market share

 

Latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 8 December 2013 show that, for the first time, over half the country shopped in either Aldi or Lidl during the three month period. Some 50.1% of all British households stepped into a discount retailer compared with 46.1% a year ago.

Chris Longbottom, director at Kantar Worldpanel, commented: “Both Aldi and Lidl have continued to record double-digit growth and are successfully broadening their shopper base with half of all British households visiting one of them during the latest period. Aldi now boasts a record 4.0% of the grocery market having increased its share for nearly every 12-week period since the end of 2010. Lidl retains its record share of 3.1% which it reached during the summer.”

Value continues to be a powerful incentive for the British shopper, a fact that is further highlighted by Farmfoods which, while still a relatively small player in the market, has grown its sales by 36.6% compared with last year. At the other end of the market, Waitrose continued to perform strongly with 6.7% growth. Kantar Worldpanel said that based on past patterns, it is likely to further boost its market share over the all-important Christmas period, as is Iceland which traditionally performs well with its party food offering.

Elsewhere, all of the big four grocers and the Co-operative again lost market share. Among this group, the best performer continued to be Sainsbury’s, although the year-on-year growth of 1.8% was insufficient to match the market growth of 2.8%. Tesco accounted for 29.9% of sales in the latest period, Asda 16.9%, Sainsbury’s 16.8% and Morrisons 11.6%.

Meanwhile, Kantar Worldpanel said that grocery inflation stood at 3.0% for the 12 week period. This was the lowest level for a year and offers a small respite for hard-pressed household budgets.

NamNews - Wednesday 18th December 2013

Flora and Warburtons in first ever partnership

 

Unilever’s Flora brand has joined forces with Warburtons in a long-term deal, marking their first-ever partnership.

The deal will initially see Flora being featured on five million packs of Warburtons Soft White Farmhouse (800g), with Warburtons in turn being featured on five million Flora 500g heat-seals. Packs will display money-off coupons for Warburtons Sandwich Thins and all 500g Flora packs.
Unilever noted: “Our partnership with Warburtons will bring together two of the UK’s most iconic everyday family brands. We both have a long standing and welcomed place in families’ homes, and have a great understanding of the evolving role of food in family life. Working together we can emphasise and promote the taste and versatility of Flora and Warburtons to drive sales in the Butters & Spreads and Baking categories.”

Warburtons added: “Flora and Warburtons is an ideal partnership, not only in terms of the nature of the products and their usage but also in terms of the market-leading position and values of the two brands which sees them both at the centre of family life. As part of the biggest ever marketing investment in the Bakery category, this activity is the latest in our 2013 campaign and we hope to build on this relationship in the future.”

NamNews - Tuesday 17th December 2013

New innovations in the bread category

 

A recent report by Foodwatching looked at key consumer trends within the bread category, including new bread varieties, flavours and textures. From a foodservice perspective, bread can be a powerful menu differentiator.  

International and ethnically exotic bread variants often make their first appearance on a restaurant menu and then become available in mainstream retail. Many ethnic bakeries are expanding their customer base, while traditional bakeries are expanding their ethnic selections. Even quick-service restaurants have trialled bread options beyond the bun.


In the US, in-store bakeries are adapting to these broader food trends and world/ethnic influences, according to the Dairy Deli Bake Digest.

Some new trends include breads made with whole, sprouted grain, and ancient grains, with savoury, ethnic flatbreads and pretzels also proving to be popular. Latin-American influences, breads from the East and gluten-free breads are also key trends.

According to Mintel’s Global New Product Database, in flatbreads alone, 36 new variants have been launched globally in the last year, with the most popular claims being microwaveable, low transfats and high fibre. Almost two thirds of these launches were in the USA and South Africa. 
 
Bakery and Snacks magazine also recently reported on vegetable fortified breads, which have entered the mainstream bread sector in Canada, where two of the country’s largest bakeries – Weston Bakeries and Canada Bread – have launched a country harvest and garden vegetable bread respectively. With health concerns presenting a barrier to bread purchases, the addition of fruit and vegetable content to bakery products is seen as a way of improving the product’s health profile. 
 
In the European market, Mintel also reports opportunities in high protein breads and scope for niche functional options to better cater for an aging population. Additionally, new formats such as square shaped wraps and thin sandwich rolls are helping maintain consumer interest and providing more consumer choice.


Source: Orla Donohoe, Food and Beverage Division, Bord Bia – Irish Food Board, 13/12/2013

Cathedral City unveils baked bites range

 

Burton’s Biscuits has announced the launch of the Cathedral City Baked Bites range, a new brand to the £500m savoury biscuit category. The bites are made with real Cathedral City cheddar, in an exclusive licensing agreement with Dairy Crest.

Cathedral City Baked Bites are the only savoury snack biscuits made using real grated Cathedral City cheddar and are aimed at a broad spectrum of consumers (particularly families with children aged 10+). They will be sold in a five-snack pack bag (RRP £1.69), a large sharing bag (RRP £1.59) and a 35g grab bag (RRP £0.59).

The partnership takes Cathedral City outside of the dairy category for the first time and will draw upon the brand’s consumer awareness, reputation for quality and broad family appeal. Stuart Wilson, Chief Marketing Officer at Burton’s Biscuits, noted: “This is a fantastic opportunity to create interest in and drive footfall to the savoury biscuits fixture”.

NamNews - Friday 13th December 2013

Convenience: competition increases as 'Big Players' flex their muscle

 

The convenience market has been fertile ground for the multitude of smaller channel specialists in the past. However, competition is hotting up as the ‘big players’, such as Tesco and Sainsbury’s, have now moved into the market.

This Insight looks at how these larger retailers are using promotions to draw customers into their smaller format stores.

Brand View has taken data from the last six months from various drinks categories* to discover what evidence there is of these big players behaving differently from the smaller, independent channel specialists.

Tesco and Sainsbury’s promotional prowess

What makes the big players stand out versus independent convenience retailers is the scale of promotions across their estate, with 70 per cent of products on promotion during the selected approximately half the time, and at around a 25 per cent depth of discount.

A higher average number of promotions on each product is another factor which marks the big players apart from the competition.

This scale of promotion is even more extreme for Tesco Metro and Sainsbury’s Local, where we see around 10 per cent more products on promotion overall, with these products spending an additional 10 per cent of time on promotion than the competition.

Independent convenience retailers finding their niche

The independent retailers appear to fit into three separate clusters of behaviour. We have coined these The Preservers, The Balancers and The Dynamics:

The Preservers:

(Premier and Best One. Light and prolonged promotions on a small section of the range)
Products on deal in these two stores were on promotion for an impressive 50 per cent and 60 per cent of the period, but these products only accounted for 7 per cent and 24 per cent of the range. The average depth of discount for these stores was the smallest at 11 per cent and 16 per cent.

The Balancers:

(Spar South and Costcutter)
These stores sit in the middle of the scale, close to the average for range on deal, depth of discount, time on promotion and frequency of promotion.

The Dynamics:

(Budgens and Londis. Targeted and brief, but deep cut promotions)
The stores compete by offering very powerful promotions with by far the highest average depth of discount, at over 30 per cent. However, the average product is only on deal for a relatively short period.

Tesco Express has become increasingly independent

When walking into a Tesco store, do you expect to see the same products at the same prices regardless of the format?

It is a common perception that convenience stores appear to be more expensive than a retailer’s ‘main estate’. This can be explained by the small volumes these shops trade and their prime locations.

The analysis comes with the caveat that, while the categories analysed are characteristic of the rest of the store, they do not represent the entire store. There has been a trend of increasing numbers of products (approximately 20 per cent year-on-year) across all store formats.

What is more interesting to note is that the number of products unique to the Express format has increased at a greater rate than the total number of products. This is indicative of the format maturing and Tesco Express becoming a store in its own right, not just a condensed version of the main estate stores.



* A product is described as ‘on deal’ if it has seen at least one promotion in the period.
* Categories: ‘Beers, Lager and Cider’, ‘Carbonates’, ‘Energy Drinks’, ‘Flavoured Water’, ‘Juice Drinks and Smoothies’, ‘Milkshakes’, ‘Squash’, and ‘Water’

Tesco Express averaging three per cent more expensive than Tesco’s main estate

The Price Index graph highlights the average promoted price of products that are in both Tesco store formats. Despite a lot of periodic variation, Tesco Express remains on average 3 per cent more expensive than main estate stores. This compares to a consistent 5 per cent base price premium in Tesco Express compared to its main estate. From this we infer that promotions in Tesco Express provide a greater depth of discount.

A striking trend is how prices of Express products are increasing uniformly in Tesco’s main estate and in its Express stores over the last three months.

Convenient strategies

Convenience is widely cited as a major source of growth for the big players. As a result we are seeing large scale promotional strategies within their convenience format stores. This behaviour makes it difficult for independent convenience specialists
to compete directly.

The significant difference in the scale of promotions between Tesco Express and Sainsbury’s Local leaves traditional convenience with the challenge of competing on assortment and everyday pricing.


Source: Brandview

Top 3 trends in Private Labels (IGD)

 

With the growth of omnichannel, mobile and e-commerce, grocery retailing is experiencing a period of dramatic change. Facing new challenges, retailers are seeking to reinforce their private label strategies to ensure the ongoing success of their brands. In this article, Katya Witham reviews three key trends that will shape the private label agenda in 2014.

The quest for brand differentiation

In 2013, private label once again grew market share globally. The countries where private label remains under-represented, such as Poland and Turkey, have posted the most dynamic share growth, in terms of volume.
By offering a powerful mix of variety and value, private label is no longer just a ‘cheaper alternative’ to brands, but a tool to drive differentiation, connect with shoppers and respond faster to emerging shopper trends.
We have witnessed numerous relaunches and improved designs of existing private label ranges recently, as many retailers identified differentiation as the key success factor for their retail brand strategies. Even among entry level ranges, there has been a shift from aggressive promotions and discounting, to enhanced value and quality. In this context, we have defined three trends shaping private label; product development, packaging and category merchandising.

Image: IGD, retailers

 

Standing out from the crowd

Packaging innovation is key to upgrading the image of private label. Many retailers are positioning their private label products in direct competition with branded versions and in some cases, extending quality beyond that of branded equivalents. Retailers are developing unique and differentiated packaging designs, bringing more personality, emotion and colour to point of sale (POS) material.
Artistically photographed imagery, combined with injections of vibrant colour, are used to show flavour or product variety, allowing the products to stand out on the shelf. Nostalgic and vintage visuals are also gaining popularity as an effective way to differentiate private label products from their modern looking alternatives. They have an appeal that many shoppers tend to gravitate towards and can also create a connection with older generations. Packaging that encapsulates simplicity, purity and natural origins is also on the rise, as shoppers feel increasingly overwhelmed by numerous nutritional claims and facts on conventional product labels.

Image: Tesco

 

Experimenting with new flavours

An increasing number of retailers are adopting an innovative approach to private label NPD by using ‘unique blends’ and ‘artisan ingredients’ to create signature ranges. New variations on classic products, such as smoked foods and beverages, are also finding their way into private label assortments.
Ethnic products and brands are also gaining popularity among shoppers, moving beyond Chinese, Thai and Indian cuisines. Although product development with international flavours is more challenging for retailers and manufacturers, Middle and Far Eastern cuisines such as Moroccan, Jewish, Korean and Vietnamese are creating a new lucrative niche for private label brands.

Unlocking new opportunities through innovative category approach

Private label is a great vehicle to bring uniqueness into product categories. With innovative cross-category solutions, new private label ranges are bringing excitement and fresh thinking to the shelves.
Waitrose, for example, has recently launched an innovative new range of kitchen utensils ‘LOVE life Prep & Portion’, designed to help consumers with portion control and the preparation of healthy meals. Similarly, Swedish retailer ICA introduced a new holistic lifestyle focused concept for all barbecue related private label products with a consistent design across food and non-food categories.
In the UK, Asda invested £15m to expand its successful Butcher’s Selection sub-brand across its entire fresh meat range, following an initial focus on steaks. With fresh meat a key purchase for many shoppers, this initiative had wider benefits on quality perceptions across Asda’s entire fresh food offer.

Image: IGD

 

The future for private label

Increased investment in private labels has added a new level of sophistication to products. Staying on top of the latest food trends is crucial for retailers and manufacturers aiming to deliver unique private label concepts that are in line with their overall brand strategy. New product development and packaging innovation will therefore create a sustainable competitive advantage as well as encourage shopper loyalty.

 

 

 

Source: IGD - Ekaterina Witham Senior Business Analyst, IGD
09 December 2013

Drivers of online engagement

What is driving shoppers to engage with retailers and manufacturers online?

Source: Him! 12.12.2013

McVitie's brings back chocolate and orange digestive

 

United Biscuits has announced the re-launch of its McVitie's Chocolate & Orange Digestives variant. The product, which will be available in stores from January 2014, will mark its reappearance after an absence of around four years.

They will be available in a 300g roll wrap with a RSP of £1.50.

NamNews - Thursday 12th December 2013

Brits spend most online

 

The popularity of online shopping in the UK shows no signs of slowing, with average spending per household rising 16% in 2012 to £1,175, more than twice the level in France and nearly ten times spending in Italy, Ofcom said today. Consumers in the UK also order goods online more often than shoppers in any of the 17 countries surveyed by the telecoms regulators for its annual International Communications Report that it publishes in December.

Some 73% of respondents in the survey bought items online at least monthly, Ofcom said, and 24% weekly, ahead of second and third-placed Japan and Germany.

The regulator asked, in 9,070 interviews conducted in September and October this year, why Britons were more likely to shop online. Price and ease of shopping experience appear to be the reasons we are increasingly abandoning the high street for online portals. In the UK, 59% cited "it saves me money" when asked why they were spending more money via the web. A total of 58% said it was "easier".

Trust in online retailers seems to have also fuelled the boom. Almost three-quarters of those in the UK (70%) said they felt "secure when paying for products online", compared to 62% in the US - the second highest - just 38% in France and 29% in Japan.

The survey also found that the UK had the cheapest mobile phone deals, with prices half or more than half the level found in Germany, Spain and the US. It is also cheapest for fixed-line broadband, but it was beaten in landline deals by Germany and Italy.

James Thickett, Ofcom's director of research and market development, said: "The UK is by quite a long way the place where people spend most online. There are a number of reasons for this. We have a long history of catalogue shopping in the UK.

"What this has done is that we trust people to deliver parcels, and we're used to getting parcels delivered to our homes and we're used to using credit cards. It's part of our DNA".

NamNews - Thursday 12th December 2013

Kingsmill to implement traffic light labels across bakery range

 

Allied Bakeries has said it will introduce front of pack ‘traffic light’ labelling across its range of Kingsmill sliced bread, rolls, breads of the world and bakery favourites. The new labels will start to appear on pack from January 2014.

Darren Grivvell, Director of Brands at Allied Bakeries, explained: “We are dedicated to openness and transparency about the nutritional value of our products. We currently have front of pack GDAs to help consumers enjoy Kingsmill products as part of a balanced diet. This new step to colour code will help consumers see the nutrition information at a glance”.

NamNews - Wednesday 11th December 2013

Quaker Oats range to to be extended

 

PepsiCo is set to expand its Quaker Oat So Simple brand, with the introduction of three new variants. The move is part of the group’s aim to attract more consumers to the brand, specifically women aged 25 to 44 years.

Starting January 2014, the group will introduce rye and barley to its instant porridge Original, Honey and Fruit muesli variants. The new variants will be available in both sachets (RSP £2.59 for 10) and individual pots (RSP £0.99).

PepsiCo said it expects the healthier variants to “attract a slightly younger audience”, adding that there is “still a lot of growth to be unlocked in this category”.

NamNews - Tuesday 10th December 2013

Rise of breakfast biscuits

Breakfast Biscuits used to be limited to Farley’s Rusks, but no longer. From a standing start in January 2010, when Belvita was responsible for essentially ‘launching’ the adult Breakfast Biscuit market, it has grown to become a £75.9m sub-sector.

In 2012 it leapt a whopping 78.9 per cent in value, with volumes up 105.8 per cent (IRI w/e 17 August 2012). Granted this rise was from a low base, but is still significant in a wider biscuit market which has risen 3.7 per cent in value with volumes up 2.7 per cent (Kantar Worldpanel 52 w/e 7 July 2012).

This Insight looks into the factors driving this phenomenal growth and how price, promotions and advertising are evolving as the sub-category matures.

The battle for the post-modern breakfast occasion

Even as the most important meal of the day, time for breakfast remains at a premium for most. This means the pressure is on for consumers, especially professionals and young working mothers, to find the right product to meet both their time constraints and nutritional needs. Belvita has found success satisfying their quick to eat, fulfilling and healthy needs.

How is Mondelez protecting Belvita’s success?

We have seen the price premium for this category increasing as consumers recognise the value of the product to their lives. With Belvita key to the price increase, Mondelez (Belvita manufacturer) is using promotional mechanics to protect its market leader status.
By moving away from Buy 2 for discounts and toward Half Price deals it is becoming very difficult for the competition to make an impact through their promotions.
With Mondelez aggressively protecting its market leader status, it leaves the competition with reduced avenues to standout.

Which options are being used to standout?

One possible way is through health credentials, where we see brands traditionally strong in this area offering longer promotions with less depth of cut, enticing consumers familiar with the category into alternatives beyond Belvita. Could this be the ‘achilles heel’ of Mondelez’s runaway success?



Source: Brandview, November 2013

First "social" supermarket opens

The UK’s first ‘social supermarket’ opens its doors today, offering shoppers on the verge of food poverty the chance to buy food and drink for up to 70% less than normal prices. If successful, the Community Shop, in Goldthorpe, near Barnsley, which is backed by large retailers and supermarkets, could be replicated elsewhere in Britain.

Community Shop is a subsidiary of Company Shop, the country’s largest commercial re-distributor of surplus food and goods, which works with retailers and manufacturers to tackle their surpluses sustainably and securely. It sells on residual products, such as those with damaged packaging or incorrect labelling, to membership-only staff shops in factories. The new project goes one step further, located in the community for the first time and also matching surplus food with social need.

The scheme is being supported by retailers, brands and manufacturers, including Asda, Morrisons, Co-operative Food, M&S, Tesco, Mondelez, Ocado, Tetley, Young's and Müller. All are diverting surpluses to the pilot.
Company Shop hopes to open Community Shops in London and beyond next year should the pilot prove successful and sustainable. The social supermarket model is well established in Europe, with around 1,000 stores concentrated in France and Austria.

The project has attracted heavyweight backing, including Andy Clarke, President and Chief Executive of Asda. He said: “Despite our continued investment in lowering the price of everyday essentials, sadly there are still people in society living in food poverty.

“Community Shop is a retail industry response to this serious social problem. As one of the UK’s largest retailers, we have a crucial part to play in supporting those families who need us at difficult times through Community Shop.”

Martyn Jones, corporate services director at Morrisons, added: “Morrisons is delighted to support Community Shop for the step change in food redistribution that it will offer.

“It is backed by an independent infrastructure and people with industry expertise. What’s so appealing about this project is that it provides a new, readily identifiable store outlet that can reach people who really need some support.”

NamNews - Monday 9th December 2013

Tesco debuts innovative window display

Tesco has transformed its Metro store on Regent Street into the first bespoke, high street Christmas window display by a supermarket. It is being supported by QR and Augmented Reality technology at another 11 Metro stores around the country aimed at giving customers shopping locally the convenience of being able to browse and buy from its full range.

The Regent Street Metro Christmas window, revealed over the weekend, features a 6 foot biscuit house, framed in a Christmassy Scandi style snow setting. The window showcases Tesco’s finest food range and range of gifts.

Robert Folly, Store Manager at Tesco Metro Regent Street said: “The team and I were so excited to be chosen for the first Tesco Christmas window display. We hope that our customers enjoy it, the biscuit house looks good enough to eat so we may have to keep an eye on keeping the windows and doors intact until the big day!”

All product and decorations displayed in the bespoke Regent Street Metro window display are available online at Tesco.com. Customers can click to buy, then collect from that Metro store.

In addition, Tesco is this also launching interactive window displays in 11 Metro stores across the country. Customers will be able to use QR codes and Augmented Reality to preview and buy products without having to enter the store.

Popular products featured will include Christmas gift ideas such as children’s bikes, best-selling toys and Tesco’s new homeware range. Once the code is scanned, the product comes to life on the customer’s smartphone, and they can arrange to Click & Collect from the same store the following day.

The retailer said that the windows are part of a wider campaign at Tesco to get people into the festive spirit and make Christmas easier for customers.

NamNews - Monday 9th December 2013

NPD and Innovation packaging update - Bord Bia

 

David Deeley, Insight & Innovation Team, Bord Bia – Irish Food Board
Our final update for 2013 identifies the latest brands using innovative pack formats. On trend at the moment is major companies reacting to demands for sustainability and more eco-friendly pack formats. From lightweight water bottles to paper wine bottles, these products are leading the way in eco-friendly packaging.



The first paper wine bottle is released in the US by Californian wine industry leader
The Truett-Hurst Inc. wine company of Healdsburg, CA, USA, rejects marketing green-washing by releasing the first paper wine bottle in the US. The bottle, branded PaperBoy, is a moulded outer shell in the shape of a wine bottle, made from recycled cardboard with a plastic liner. The entire package is 85% lighter than a glass bottle and is much easier to recycle. From production, to shipping, to recycling, PaperBoy is showing the rest of the wine industry how one change can make a big difference.
                                                                                                    
 
                                                           

“You stay classy Tango Orange” Tango has unveiled a limited edition bottle in a partnership with Paramount Pictures for the eagerly anticipated Anchorman 2: The Legend Continues.
Britvic, who own Tango, said the bottles will feature the face of the movie’s lead character Ron Burgundy and be supported by PoS material.
Bottles will come in 2L, 600ml and 330ml sizes, and each flavour will have its own strapline, inspired by Burgundy catchphrases such as “stay classy” on Orange Tango, “It’s the truth” on Apple Tango and “say whaaat!” on Cherry Tango.






New premium brand design for Lurpak portfolio
Lurpak have added slow-churned butter to their portfolio. The design idea is executed across the identity, structure, parchment and outer wrap. The innovative butter dish heroes butter in a novel way; the packaging evokes heritage, celebrates taste and brings to life an everyday food experience for a premium product – taking butter out of the fridge and putting it at the centre of the table.
Pearlfisher Realisation Director Shaun Jones commented, “The creative process was complemented by a fresh and innovative approach stemming out of the brief to create a structure that plays to the pleasure of butter, allowing better interaction with the product and putting it back at the centre of attention. The presentation pack – which comes in the form of an innovative, beautifully designed and fully recyclable brushed aluminium butter dish – is one of the biggest innovations in the FMCG category.”
                                                                                                    


Introducing the “RIGHTWEIGHT” PET water bottle
Sidel has introduced a new 0.5 litre PET bottle for still water called RightWeight. The new bottle is lightweight, kinder to the environment and doesn’t compromise on product quality.
Increased resistance also makes it easier for consumers to unscrew the cap and open the bottle. In addition, this stronger resistance means the RightWeight bottle can travel across the supply chain without getting damaged along the way.
Compared with the average 12 grams for commercial 0.5 litre water bottles available on the market today, the 7.95 gram bottle represents 34% less weight than the average commercial bottle. The bottle allows for raw-material cost savings of up to €1.75 million per year, according to Sidel figures.

 
APPE bottles support OJI Drink's sustainable message
PET packaging specialist APPE has worked with Oji and Hero to produce an environmentally friendly 100% recycled PET (rPET) bottle for Oji's 'sustainable' functional fruit drink. The Oji drinks are available in four variants featuring different fruits and health benefits. All contain caffeine from green coffee beans to provide a mild energy boost along with a variety of nutrients including antioxidants, fibre, magnesium and vitamins. The material was the ideal choice for Oji’s strong environmental ethos with its firm focus on sustainability and respect for environmental and social issues. The new bottle enables the brand to achieve a “closed loop” recycling system as the product can be recycled and then reused for a new 100% rPET bottle


Source: NPD and Innovation packaging update, Bord Bia, 06/12/2013

Lidl's UK boss outlines his vision

an interview published in The Grocer, Lidl's UK MD Ronny Gottschlich has provided new insight into the discounter's strategy and future priorities. Here we summarise his key points.

Fresh increasingly key to the offer

“This year fresh accounts for 40% of turnover. I can see that growing to 50%. The more customers see fresh, the more they buy. Overall, we have increased the space dedicated to it by 40% and next year we will add even more. We are rolling out fresh fish as well, and all 600 stores will have bakeries by February next year,” Gottschlich said.

Expanding the range

Lidl has raised its SKU count from 1,450 to 1,600 this year and is aiming for 1,700 in 2014. The number of 'key brands' is also up (from 50 to 300). To make room for them, Lidl is cutting back on bulk pallets on the shop floor.

Vision for 1,500 stores

Lidl currently has 600 UK stores, would like to double this number and has a long term vision for 1,500 stores. To achieve this Lidl wants to return to its pre-recession store opening pace of 25-30 stores per year, up from 12 this year. Lidl's standard store size has doubled from 8 to 16,000 sq ft to accommodate the bigger range and there will be more focus on affluent locations - Sevenoaks and Dorking are among the latest store openings.

Strengthening premium ranges..

Lidl has expanded its Deluxe range from to 300 lines for this Christmas to include affordable luxury treats like legs of Serrano ham and whole lobsters. Commenting Gottschlich said: "We thought we wouldn’t be able to top last year, but this year has been unbelievable. We will hit £64m turnover from Deluxe alone."

.. but not losing sight of value

Gottschlich reaffirmed Lidl's commitment to Lidl's low cost, low price model pointing out that this reflects Lidl's ability to bulk buy across Europe, its limited range and intensive focus on efficiency. In March recently added a Simply... range of budget priced essentials to complete its good, better, best architecture.

First TV ad delivers impressive results

Gottschlich is very pleased with the shopper response to Lidl's first ever TV ad. "Three weeks in and we are seeing customer numbers up 18% and like-for-like sales are up 25%. It’s done fantastically well.” The £750,000 campaign ad uses as its soundtrack One Direction's Little Things, tweaked to Lidl things.

Increasing investment in UK

Lidl invested £170m in the UK in 2013 with over half of this funding an expanded fresh section in 450 stores. Next year, investment will rise to £220m, mostly allocated to new stores, store improvements and warehouses. Investment will rise to £300m in 2015 to "make sure we are future-proof and continue to gather momentum".


Source: IGD Retail Analysis, 2nd December 2013

Tesco reports challenging Q3 - IGD

Tesco has reported its Q3 trading results with group sales +0.2% (inc VAT exc. fuel) at constant exchange rates and +0.6% at actual exchange rates, for the 13 weeks until 23 November 2013.

Ongoing pressures in the UK

In the UK sales grew 0.9% (inc. VAT, exc. fuel) with LFL growth recorded at -1.5% (exc. VAT exc. fuel), a worsening performance versus the first two quarters of the year. Tesco put the ongoing pressures on its UK business down to slowing sales for all in Q3 and also the economy, flagging that in the UK household real income remains 10% lower than its peak in 2007. Tesco has continued to make some good progress against its UK strategy to 'Build a Better Tesco' in the quarter, including:

• Re-launched its premium tier private label brand Tesco finest*
• Individually tailored the ranges of its 1,600 Express convenience stores to better suit local needs and drive LFL growth
• Refreshed 108 stores (>1.8m sq ft of existing space) with average results outperforming the programme to date
• Transforming general merchandise - continued work to migrate to categories that generate less sales but those that are more profitable, productive and sustainable (e.g. Home, Cook & Dine, Papershop and Celebration)
• Record number of online grocery orders - rolled out one-hour online grocery delivery time slots, now available to 98% of the population
• Trialled its first grocery Click & Collect locations in non-store locations, to support its network of over 200 Click & Collect sites
• Launched its sixth dark store in Erith, south east London
• Sales of Tesco's Hudl tablet that launched in Q2 exceeded 300k units, more than was expected in the total run-up to Christmas

 Challenges in Korea and Thailand impacting Asian performance

Tesco's international sales declined -1.2% (exc. fuel) at constant exchange rates and grew 0.1% at actual exchange rates. In Asia sales grew 0.5% (exc. fuel) at constant rates, with LFL growth worsening versus Q2, down by -5.1%. The poor LFL performance is attributed to a greater year-on-year impact from the restricted opening hour regulations in South Korea, where LFL performance for Q3 was record at -4.8% and tough trading conditions in Thailand, with LFL in Q3 remaining challenging at -6.9%.

Europe remains difficult but plans in Poland and Turkey improving sales

As expected the economic situation and strong competitive landscape in Tesco's European markets continued to impact performance.European sales declined 2.9% (exc. fuel) at constant rates, with LFL growth marginally improving versus Q2, but still negative at -4.0%. Plans to improve the performance of the businesses in Poland (Q3 LFL -0.7% vs. Q2 LFL -4.5%) and Turkey (Q3 LFL -3.5% vs. Q2 LFL -10.7%) have shown pleasing results in the quarter, but other markets remain a concern. Ireland showed the worst LFL performance in the quarter (Q3 LFL -8.1% vs. Q2 LFL -4.4%) reflecting both an increasingly competitive market and challenging conditions for consumers.

Tesco remain confident that the strategy will drive long-term value

Tesco CEO, Philip Clarke, commented, 'Continuing pressures on UK household finances have made the grocery market more challenging for everyone since the summer and our third quarter performance reflects this. The actions we have taken to position the business for the future – including the work currently underway to transform our general merchandise offer and our decision to significantly reduce the amount of new space we open – are also holding back our sales performance in the short-term. Overseas, the near-term trading environment also remains tough, most notably in Thailand, but we have been able to drive a better performance in Poland and Turkey following the actions taken in the first half.'

Waitrose to stock first ever Warburtons cake range

 

Warburtons has launched its first range of cakes, which will be exclusively available at Waitrose outlets for the next six months.
The baked goods giant has introduced four new lines – chocolate brownies, lemon cakes, millionaire’s shortbread, and Bakewell squares. The single-serve cakes are available in multi-packs of four (RSP £2.49).
Warburtons said the launch was “part of our continued desire and commitment to grow in the bakery category. We also see a gap in the market for a premium café-style cake product”.

The products will be available at other retailers from June 2014 onwards.

NamNews - Wednesday 4th December 2013

Aldi opens pop up restaurant to showcase products

 

Aldi is opening a pop-up restaurant in London today to showcase the “quality and value” of its food range. The fast-growing discounter has partnered with celebrity chef Jean-Christophe Novelli who will cook a four course meal using Aldi food with ingredients costing £17.90 per person.

Aldi said: “Everybody likes to indulge over Christmas and by doubling the size of our Christmas range, we have ensured that our customers can really get into the festive spirit without breaking the bank or compromising on quality.

“Our products are sourced from some of the best food and drink producers around, so our shoppers can be confident they are buying the finest products at the lowest prices.”

The restaurant is located on Portman Square, close to Oxford Street.

NamNews - Wednesday 4th December 2013

Tesco could start slashing prices following disappointing trading update

 

Tesco could be forced to slash prices to avert a disastrous Christmas as it prepares to unveil what is expected to be another set of disappointing results this week. .

Third quarter trading figures from Tesco released on Wednesday are expected to show that like-for-like sales in its domestic market dropped by around 1.5%, marking a setback for the group after it managed to halt declines in the previous three months, when sales remained flat.

Its own brokers, Deutsche Bank, have raised the alarm over recent trading and cut forecasts for annual underlying earnings. Chief Executive Philip Clarke will face tough questions over his £1bn plan to reinvigorate trading as the group enters its peak Christmas trading period. Some major investors have already reportedly raised concerns over the chain's management team following a dire set of first half figures.

In face of increased competition from the discounters, Tesco has stepped up its promotional activity in recent months with generous money-off vouchers for customers. However, some analysts have suggested that Tesco could be forced to slash prices to avert a poor Christmas trading period. One source said: “Tesco needs to avoid another dismal Christmas trading update in January and it is seriously considering investing in price, whether this be through promotions or price cuts over the festive period.”

Last year, poor Christmas trading sparked a shock profits warning, prompting Clarke to embark on his recovery plan of revamping stores, improving food quality and hiring more staff. The City expects this week’s results to make grim reading for the Tesco chief. Shore Capital analyst Clive Black said: “We anticipate the update from Tesco will be subdued. Overall trade since late August has been weak and deteriorating across the UK grocery market and the major British supermarkets have been under pressure.

“Shore Capital is once again nervous about our financial forecasts for Tesco UK.”

Meanwhile, Rahul Sharma, retail analyst at Neev Capital, said: “Tesco has been asleep at the wheel, squeezed at one end by Waitrose and at the other by Aldi and Lidl. It’s bottom of the pack, along with Morrisons.

“If it wants positive like-for-likes over Christmas then there is no solution other than implementing price cuts.”
Last month Asda pledged to invest £1bn in lowering prices.

NamNews - Monday 2nd December 2013

Retail data shows slower price inflation

Kantar Worldpanel has reported a reduction in price inflation in its latest supermarket share figures.

According to Kantar, the four week period up to November 10th saw inflation standing at 2.9%, down from a high of 6.4% in January this year.
 
“This drop in price inflation has caused the value of the grocery market to slip into year on year decline, following six months of sales growth as consumers continue to focus on value and savvy shopping“ according to David Berry, commercial Director at Kantar WorldPanel.

And while the impressive growth at the discounters continues, this is the first time that Aldi has seen its quarterly year on year growth dip below 20% since April 2012. Previous forecasts estimated that the combined total market share of the discounters may exceed 15% in the last quarter.

Alcohol is bucking the trend for reduced price inflation where the average price has risen by 16%. David Berry further commented, “One area which continues to experience significant inflationary pressure is alcoholic drinks. Increased duty on alcohol as part of the October budget has affected wine in particular, where the average price has increased by 16%. As a result, 51,000 fewer shoppers have put wine in their baskets; while those who continue to buy have cut back by almost one bottle over the past 12 weeks.”

Source: Maria Stokes, Bord Bia - Irish Food Board - 29/11/2013

Lunchtime is about control, lunching at home and sandwiches

 

Key findings of the Bord Bia recent study on lunchtime occasion include:

• Two thirds are eating lunch at home or bring lunch with them from home, with the multiple being the main place to shop for lunchtime ingredients. 

  

• We’re a nation of sandwich-lovers! Over 40% of us opt for bread-based lunches.
• Key considerations when choosing lunch foods are control over budget, ingredients used and calories consumed. 
• Almost two thirds (57%) of lunches consumed at work are brought from home. Just 1 in 5 lunches eaten in work are items that have been purchased locally and brought back.
• Interestingly, around a third of us (30%) eat lunch in work while 17% choose to eat out at serviced outlets like cafés, restaurants or pubs.
• Mums are responsible for preparing and deciding on the components of the school lunchbox. Two thirds try to vary the contents a little to keep the child interested in the variety.

Source: Paula Donoghue, Brand Manager, Bord Bia – Irish Food Board - 29/11/2013

Waitrose to stock new House of Cuckoo cupcake boxes

 

House of Cuckoo have launched their ‘cupcakes with a modern twist’ in 19 Waitrose stores this month, with the help of design agency Alexir. The new packaging offers four Cuckoo Cupcakes in an eye-catching and highly functional shelf-ready box.

The company said the carton perfectly complements the quirky nature of the cupcakes, noting that the fittings have been designed from carton board specifically to secure the contents during transportation and storage. The box uses vivid colours and features a stylish round window to offer a view of the cupcakes.

NamNews - Thursday 28th November 2013

Young "ethical" shoppers are more optimistic

Shoppers aged under-35 are more likely than their older counterparts to shop ethically, cook from scratch and are more than twice as likely to think they will be better off in the year ahead, according to new research from IGD ShopperVista.

Under-35s are twice as likely to:

• Say they will buy more organic over the next year (23% vs 11% of over-35s)
• Want to use specialist stores, like butchers and greengrocers, more in the future (18% vs 9%)
• Believe they will be better off in a year’s time (28% vs 12%)

Joanne Denney-Finch, Chief Executive, IGD, said: “It’s encouraging that younger people are so optimistic about the future and also more likely to want to make a difference to the world. Shoppers under-35 are more interested in supporting workers in developing nations, through Fairtrade for example, and considering a retailer’s values and approach to sourcing products.

“As well as wanting to do the right thing, younger people are more interested in cooking from scratch, using leftovers to waste less, and spending a little more on food and drink to make a nice meal or have a treat if they have spare money at the end of the month.

“The under-35s have grown up with high profile ethical campaigns by celebrity chefs. They are tech-savvy and have lived through an era of cheap international travel – so they’ve experienced global cultures and cuisines, and enjoy eating world foods on their return home. Shoppers aged 25 to 34 are almost twice as likely as older ones to request more Vietnamese, Moroccan and Caribbean foods from British retailers.

“These trends provide opportunities for retailers and food manufacturers to target younger shoppers with targeted marketing and new products that will chime with their more optimistic outlook.”

NamNews - Wednesday 27th November 2013

Warburtons unveils festive packaging

Warburtons has announced that its first-ever Christmas-themed packaging is making its debut on shelves this year, offering retailers an opportunity to strengthen sales in the festive season. With three eye-catching designs, Warburtons Christmas wax packaging will be available across the 800g Toastie, Medium and Thickest bread products.

Warburtons noted: “Throughout 2013, we have driven the bakery category with NPD and product innovation, and our new Christmas wrapping is the latest example of this. The attention grabbing packaging will draw in festive shoppers providing retailers with an opportunity to strengthen sales in the important Christmas season.”

The festive packaging is available in-store for the next six weeks.

NamNews - Wednesday 27th November 2013

More brand collaboration could maximise consumer potential

 

Brand collaborations could be used more to encourage consumers to try new brands as well as helping retailers maximise the potential that meal and snack time opportunities present, according to Engage Research. The customer insight agency was commenting following the announcement of a partnership between bread brand Kingsmill and cheese brand Cathedral City.

The brands are introducing in-store cross merchandising tools to help independent retailers maximise basket spend opportunities and drive lunchtime purchasing. This will include POS material for both bread and chiller sections. “Usually you see brand collaborations intended to help consumers who need inspiration to 'make' products work together. For example, we have seen this with bagels and cream cheese,” explained Engage Research director, Marie Sutton.

“In this case bread and cheese buyers may not require inspiration but in crowded categories up against other branded and own label products, a collaboration with another well known product can help push these two brands to the fore.”

Brand collaborations are nothing new, added Sutton, and, as a result, consumers are increasingly receptive to a collaborative approach. She points to the fashion industry where collaborations have been the norm for some time with, for example, Versace creating a range specifically for retailer H&M.

Although collaborations can be successful, however, the challenge of asking separate companies to collaborate on messaging and communications could be one reason why they don’t occur as much as they might. However, giving the collaboration the best chance of success remains important with Engage advocating combined online qualitative and quantitative research to facilitate client-consumer interaction to gain insights on how to maximise the positives of both client brands.

But, Sutton added, the link does not necessarily need to be formal. “We have seen how certain products, for example prawns and smoked salmon, sometimes don’t do as well as they might because consumers struggle to find occasions to serve them and perhaps only know one or two recipes for using them,” she added.

“In these situations retailers and brands can collaborate effectively to provide 'inspiration' and prompt purchase. Frequency of purchase can be supported in other ways through in-store signage, perhaps showing an occasion or a delicious meal involving the products, recipe cards and placing other category products, perhaps sauces, alongside so that an easy meal is signaled.”

NamNews - Tuesday 26th November 2013

Private Label growth continues

 
According to a recent IRI study, private label sales continue to grow even in mature European markets.

In 2013, private label accounts for 36.7% of retail sales and 47.1% of volume sales in Europe, with varying levels of penetration across markets.

The UK remains the flagship market, with private label sales approaching 55% of retail turnover, while Spain is showing the strongest year-on-year value growth at 1.4%.

France is the only market where the value of private label sales declined slightly in 2013 (-0.6%), in part due to the poor performance of economy private label ranges which a number of retailers are now talking of discontinuing. This decline is also due to strong price promotions between A brands in France, resulting in a decrease in price differentials between national brands and standard private label brands. This leaves private label ranges less appealing to price conscious consumers.

Europe IRI noted a premiumisation of private label ranges and a move away from a pure price strategy, although on average private label products remain 30% cheaper than competing A Brands.
 
Source: Noreen Lanigan, Paris Office Manager, Bord Bia – Irish Food Board, 22/11/2013

Whole Foods pilots Own Label discount loyalty card (in the US)

 

Whole Foods Market has kicked off trials of a new loyalty card scheme, under which members receive a 10% discount of its ‘365’ own label grocery range. The ‘Hello 365’ programme is currently live in just eight stores across Indiana, Illinois, and Florida.

Whole Foods said it hopes the scheme will encourage shoppers to try more 365 Everyday Value items, adding: “If it’s successful, we’ll look at rolling it out into some other markets”.

The move comes as Whole Foods continues to see more demand for its own label range, which accounted for 11% of total sales in the last fiscal year.

NamNews - Thursday 21st November 2013

.....

With the growth of own label in the Uk, could we see this coming here too?

Kingsmill in tie-up with Cathedral City

Kingsmill has announced a partnership with Cathedral City that will see both brands introduce a set of in-store cross merchandising tools to help independent retailers maximise basket spend opportunities and drive the lunch-time meal occasion.

Available for the bread and chiller sections, the merchandising tools include POS material in the form of barkers, posters and wobblers and OFDUs for larger stores. The creative highlights a lunch-time meal occasion and features both Kingsmill and Cathedral City grated cheese.

Consumers are leading increasingly busy lifestyles – with 7% of workers not taking a lunch break, and those who do taking on average just 29 minutes. Allied Bakeries noted: “In order to capitalise on this growing trend of time poor shoppers and meal mission seekers, retailers need to consider cross merchandising”.

NamNews - Thursday 21st November 2013

Kantar 12 w.e 10.11.2013 - Big 4 all lose market share as discounters and Waitrose continue to prosper

 

Latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 10 November 2013 show another all-time record share of 3.9% for Aldi as its consistent rise continues unabated. The big four supermarkets – Tesco, Asda, Sainsbury’s and Morrisons – all lost market share for the first time, whilst Waitrose continued to shrug off the market turmoil as it saw its share increase yet again – an unbroken trend since mid-2009.

Edward Garner, director at Kantar Worldpanel, commented: “The number of shoppers visiting Aldi has grown by 16% year-on-year at the same time as the average basket size has swelled by nearly 15%. In fact, almost a third of British households have shopped in Aldi in the past 12 weeks. Although in the shadow of Aldi’s performance, Lidl’s sales growth of 13.8% also remains strong”.

In direct contrast, Kantar Worldpanel pointed out that sales of premium products have also increased significantly over the past year with Christmas shoppers expected to be seeking both luxury and lower prices this year. During the period, sales of Tesco’s Finest range surged ahead with 16% year-on-year growth and Sainsbury’s Taste the Difference lifted sales by 12%.

Meanwhile, Sainsbury’s growth of 2.6% remained the highest of the leading multiples but dipped just below the market average of 3.2%. Morrisons year-on-year sales growth continued to be positive after the declines seen at the start of the year. Tesco performance remained poor with it the slowest-growing of the big four over the period, with sales up just 0.7% and its share of the market slipping from 30.5% to 29.8%.

Kantar Worldpanel said grocery inflation stood at 3.7% for the period, exceeding the overall grocery market growth of 3.2%, implying pressure on households to manage down their ‘personal inflation’ by seeking lower prices.

These findings are based on Kantar Worldpanel data for the 12 weeks to 10 November 2013. Kantar Worldpanel monitors the household grocery purchasing habits of 30,000 demographically representative households in Great Britain. All data discussed in the above announcement is based on the value of items being bought by these consumers.

NamNews - Wednesday 20th November 2013

Asda to open click and collect points at tube stations

 

London commuters will soon be able to pick up their online groceries on the way home from work as Asda puts collection points in tube station car parks.

The supermarket chain has reached a deal with Transport for London (TfL) to open click & collect points in the car park at six London Underground stations. The move is part of Asda’s drive to open 1,000 click & collect points over the next five years, with a particular focus on the south east of the England where its store coverage is not as widespread compared to its key rivals.

The tube station click & collect points will be at East Finchley, Harrow and Wealdstone, High Barnet, Highgate, Stanmore and Epping. They will allow shoppers who order their food online before noon to collect their grocery shopping from the station after 4pm.

Mark Ibbotson, Asda’s Retail Director, said: “Customers in the south east tell us that they want the prices and quality provided by Asda value but they can’t access it easily. This tie-up with TfL solves that.

“We believe customers will value the convenience of collecting shopping at their home tube station rather than carrying the products bought in premium convenience stores on their commute home."

Tesco is also looking to exploit the emerging click & collect trend, piloting its first off-site collection points earlier this year, while Sainsbury’s revealed a sales boost from its own collection points in its latest quarter.

NamNews - Wednesday 20th November 2013

Him! facts: Attracting shoppers from morning to midnight

Him! Convenience facts: eating on the move is a huge opportunity for convenience

Sainsburys launches revamped Basics range

 

Following similar moves by its rivals over the last couple of years, Sainsbury’s will relaunch its ‘Basics’ value own label range this week. The 600-strong range is being given an updated look with the white and orange colour scheme enhanced with more colourful product imagery and GDA information. New products lines are also being added.

Sainsbury’s strong own label offering has been one of the key factors in it outperforming its rivals over the last few years. It recently completed the relaunches of its premium ‘Taste the Difference’ and core ‘By Sainsbury’s’ ranges.

NamNews - Monday 18th November 2013

Price of private label rising as retailers focus more on quality

 

FMCG market and shopper intelligence firm IRI has today launched its annual report about the private label market in Europe and the US. The report, which outlines where the private label market is today and how it is likely to evolve over the next year, highlights the rising price of retailers’ own brands as they reduce promotions and increase their focus on quality, with many re-launching premium ranges.
A reduction in promotions by retailers has increased the product price of private label while national brands maintain promotional levels as they fight for share in a highly competitive market. As a result, the price gap between national brands and private label products has narrowed. The increased price of private label netted retailers in the UK an extra £50m – and a total of 0.5 billion Euros (0.4% increase) across Europe and the US.

Private Label is on average priced at 27% cheaper than equivalent national brands in the UK and this difference has narrowed by 0.3 points in the last year. The price gap has closed the most in chilled and fresh food and frozen food, both categories where retailers have performed well in the last year.

Tim Eales, Director of Strategic Insight at IRI, said: “With its three-tier approach, private label continues to play a vital role for retailers as shopper confidence remains fragile. Shoppers want quality as well as value and so as the perceived quality increases – with more premium ranges being launched - they are more confident to buy private label and pay more for it.”

“Retailers continue to give their products more personality as ‘brands’ and focus less on low prices. As private label gains ground in the quality and price debate this creates even more pressure for national brands that must work harder than ever to tell a compelling and shopper focused story,” added Eales. “Sharing category level insight and engaging in localized assortment optimisation will maximise sales for entire ranges.”
Other highlights from the report include:

• Private Label value share is growing where shoppers are not convinced by the quality for value offer of national brands. Overall in Europe Private Label commands a 47.1% unit share of all FMCG sales and contributes to more than half of the growth in Europe. However private label is behind much of the strong sales growth in the UK, which has the largest share of private label and increased its value share by 0.6 points to 51.1% and unit share by 0.2 points to 57.6%.
• Retailers must address assortment from a shopping basket perspective to avoid hitting a growth ceiling– even though PL increasingly takes priority on the shelf, retailers are taking a more analytical approach to avoid stocking duplicate products and reaching the point that too much PL turns off consumers. National brands spend huge amounts of money on marketing to drive shoppers into store and the importance of their presence on the shelf must not be underestimated.
• Frozen food growth for retailers – the horsemeat scandal has not dented overall European sales of frozen food in the last year. Frozen food in the UK was one of only two categories (the other was chilled and fresh food) to see an increase in private label unit share.
• National brands are growing value sales in all sectors except alcohol (beer, lager and cider only), which had more than 3 billion Euros in value sales in the UK in the last year, a total category decline of 0.4% in the year to June 2013.
• Private label struggles to make a foothold in categories where shoppers are often extremely loyal to their favourite brands such as tea, chocolate and personal care and some other food categories.

IRI advises retailers and manufacturers to collaborate, using predictive analysis tools to find the optimum assortment and price mix for individual products and categories that will benefit everyone, including shoppers.

NamNews - Thursday 14th November 2013