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