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GLOBAL
CONVENIENCE
SYMPOSIUM growing demand,
changing structures
Individual presentation
from session 1:
THE RISE OF THE MODERN
C-STORE IN THE UK
Mike Watkins Head of Retailer and Business Insights, UK
THE RISE OF THE MODERN
C-STORE IN THE UK
3
98
101
97
91
94
79
74
65
72
7577
8078
7577
67
7273
71
7775
Q1
05
Q1
06
Q3
06
Q1
07
Q3
07
Q1
08
Q3
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Q3
10
Q4
10
Q1
11
Q2
11
Q3
11
Q4
11
Q1
12
Q2
12
72 77 75
Source: Nielsen Global Consumer Confidence Survey - UK
IN THE UNITED KINGDOM (UK)
CONSUMER CONFIDENCE IS LOW
● Falling disposable income is still leading to reduced household spend.
● Price of petrol and diesel has become a major concern for shoppers and the increased cost is taken out of the overall (and fixed) household budget.
● In 2012, growths in Online Grocery shopping at +10% continue to outpace
bricks & mortar stores at +2%*.
● Unit sales growths have now been negative for over 16 months.
● Big dependency on vouchers and coupons to drive footfall.
* Source: Nielsen Scantrack/ Homescan Q2 2012
SHOPPER BEHAVIOR IS
RAPIDLY CHANGING
Spend and frequency of visit are increasing for smaller shopping baskets
Shoppers are managing budgets by using a wider range of stores 1
2
IMPLICATIONS
Mission Shopping
Main Shop
Immediate Need
Top-up Shop
More stores
Multiple grocery stores per million people (UK)
04 09
92
129
14E
142
More choice
Number of SKU’s (incl General Merchandise)
05 11
30k
50k
Savvy shopping
+10%
-1%
41%
Supermarket Loyalty
3.4
No of stores used
PRESSURE IS INCREASING ON
SUPERMARKET LOYALTY
CHANNELS DELIVERING
STRONGEST GROWTH
Grocery Discounters
On Line
Smaller food stores
Source: Nielsen Homescan Q2 2012
+30% sales growth at Aldi and Lidl
5% market share of all CPG / FMCG
1,000 square meters or less
WHAT DO SHOPPERS MEAN BY
CONVENIENCE?
5 mins 15 mins 30 mins 5 mins 15 mins
40% 22% 2% 7% 4%
Source: Nielsen Homescan Survey
in the UK, shopping “mission” is equally important
CONVENIENCE MEANS
MORE THAN DISTANCE
… and shopping more frequently
More packs purchased
% Year on year Change
FMCG Baskets
Source: Homescan FMCG excl General Merchandise and Tobacco : Convenience Stores (<300 sq m ) , 52w/e Apr 2011 vs Apr 2012
More Shoppers using C stores …
SHOPPER SPEND IS
SHIFTING TOWARDS CONVENIENCE
57%
37%
21%
17%
19%
15%
53%
44%
24%
18%
17%
14%
Convenient location
Good value for
money
Low prices
Good quality fresh
produce
Good range of
products
Ease of parking
2011
2012
Source: Nielsen Homescan Survey (GB) January 2012 v 2011
VALUE FOR MONEY HAS BECOME
MORE IMPORTANT
Dining in
Convenience
Cheaper
option
Health
Economising
Switch to
cheaper
trade
channel
Cooking
from
scratch
UK FOOD RETAILING
DRIVERS OF GROWTH
SAVING MONEY WHILE MEETING
LIFESTYLE NEEDS
Total Sales
Ambient Grocery
Crisps/Snacks
Soft Drinks
Produce
Fresh Ready
Meals
Frozen Foods
Milks/ CreamYogurts
PP Cooked Meats
Beers/ Lager/
Cider
Morning Goods
Dishwasher/ WUL
Chocolate / Sugar
Confectionery
-5
-3
-1
1
3
5
7
9
11
13
15
0 5 10 15 20 25 30 35
`
Convenience Stores Share of Trade
Cate
go
ry G
row
th C
on
ven
ien
ce S
tore
s
Table Stakes
Big Brands on Promotion
Food and Drink
for next 3 days
More Breadth
and Less Depth
Source: Nielsen Scantrack Convenience and Impulse
52 weeks to 31st March 2012
Tobacco share is 56% with a +14% growth
MULTIPLE CATEGORY
OPPORTUNITIES
Traditional Trolley
Bulging Baskets
Staple Top Ups
Small but Pricey
Super Trolley
Source: Nielsen Homescan Shopper Missions - 52 weeks to 4th February 2012
FIVE SHOPPER MISSIONS basket characteristics
CONVENIENCE AND SMALL HIGHSTREET:
50% OF TOP UP SPEND
49
28
25
44
55
65
18
9
10
19
23
20
11
13
14
12
11
10
13
19
23
18
10
4
9
31
27
8
2
1
0% 50% 100%
All Trips
Small but Pricey
Staple Top Ups
Bulging Baskets
Traditional Trolley
Super Trolley
£ Consumer Spend by Shopper Mission
Megastore Superstore Large High Street
Small High Street Convenience
116
15
8
127
4
31
0.0 50.0 100.0 150.0 200.0
Av Spend per Hhold
(£'s)
Av Spend per Visit (£'s)
Frequency of Purchase
Convenience Store Shopper Mission
Staple Top Ups Small but Pricey
70
15
5
111
6
20
1
0.0 50.0 100.0 150.0 200.0
Av Spend per Hhold
(£'s)
Av Spend per Visit (£'s)
Frequency of Purchase
Small High Street Shopper Mission
Source: Nielsen Homescan Shopper Missions -52 weeks to 4th February 2012
SMALL STORE
SHOPPING
More households
are shopping for
6 to 10 item
baskets
LITTLE AND
OFTEN
Sales growth
+16% for 1 to 5
item baskets
at Supermarkets
EATING OUT
LESS
Almost a quarter
eat at home
or bring
lunch to work
more often
Source: Nielsen Homescan Survey (GB) January 2012
TRENDING TOWARDS
SMALL STORES
● Entrepreneurial Independents e.g. Spar, Budgens, Londis, Nisa, Premier
● Co operatives - over 3000 small stores serving the local community
● Tesco Express / Sainsbury Local - over 2000 full range C stores and formats that raised the bar over the last 5 years
● M&S Simply Food - over 150 stores making indulgent food more accessible
● NEW : Fresh Food small stores from Morrisons and Waitrose
THE RISE OF THE
MODERN CONVENIENCE STORE
Selling area is increasing … up to 500 sq m
All Supermarkets are now developing or redeveloping small store formats 1
2
IMPLICATIONS
NEW CONVENIENCE FORMATS
ACROSS GROCERY MULTIPLES
M&S Simply Food Little Waitrose M (Morrisons) Local
M&S SIMPLY FOOD WAS THE FIRST
MODERN CONVENIENCE STORE
● Launched in 2005 as a food-only standalone
● Franchise operates in non-traditional locations, i.e. forecourts in partnership with BP
● Format success lead to development of larger stores in neighbourhood locations
● Targeted at local residents, commuters
and visitors
● A high dependence on fresh foods and
designed to fulfil daily shopper needs
● While also covering everyday essentials,
including non-food items
● 30 `little` Waitrose stores trading at June 2012
● Waitrose have aspirations for up to 500 stores
Image source: Waitrose : Source Nielsen / IGD
NEW CONVENIENCE CONCEPT
WAITROSE MEETS DAILY NEEDS
● Traditional Supermarket retailer with large store format until end of 2011
● Proposition: ease of shop, fresh to go and convenience foods - Differentiated by extended fresh foods area
● 3 trial M Local stores have been launched with a 500 sqm selling area
● Announced expansion plans for up to 100 Local stores in 2013
● M Kitchen range of Prepared Foods
: Source Nielsen / IGD
NEW CONVENIENCE CONCEPT
M LOCAL BY MORRISONS
1. The TOP4 supermarkets need to increase the loyalty of shoppers and reign in
promiscuity and this will require more focus on their smaller store formats.
2. Promotions, Coupons, Vouchers, Points are promotional mechanics that Convenience store shoppers will also respond to, by visiting more often or by spending more each visit.
3. Store choice is also about shopper mission not just location ; categories in growth in Convenience stores include Confectionery, Snacks, Drinks and also Chilled and Fresh Foods.
4. The primary focus of the modern Convenience stores in the UK is Fresh Food to take home and prepare, as well as food to go, with improved quality, and a wider but edited range of Grocery staples for the next 5 days.
5. Differentiation by CSR, food provenance and a community focus will also become increasingly important to shoppers using the Convenience store of the future.
FIVE POINTS TO
REMEMBER
Fresh foods with grocery staples
Shopping little and often
Integrated with local communities
The eating in occasion
IS THIS THE FUTURE OF
CONVENIENCE RETAILING?
Thank You [email protected]
CONTACT US FOR
MORE INFORMATION
send us an email: [email protected]
follow us on twitter: @markwohltmann
read our column: www.globalcstorefocus.com
stay tuned for our new, upcoming youtube series
meet us at the relevant global c-events
Sep 23rd, London, Future of Convenience Conference
Oct 08th, Las Vegas, NACS Show
Nov 04th, Cologne, first European Convenience Show