Grocery Sh

Septembe

A Baromete

DB/bs/mt

opping

r 2005

r Report

1

2

Table of Contents

INTRODUCTION 3 NOTE ON REPORT FORMAT 4 SUMMARY & CONCLUSIONS 5 CHAPTER ONE 6 GROCERY PRICE PERCEPTIONS 6

1.1 Survey data confirms CPI increases 6 1.2 A continuing conflict between perceptions and reality 7

CHAPTER TWO 10 STORE USAGE 10

2.1 Changes in Usage over time 10 2.2 Market Share Estimates 11 2.3 Aldi/Lidl Brand Status Check 14 2.4 A wide range of Items bought 16

SECTION THREE 17 EVALUATING THE ALDI AND LIDL OFFER 17

3.1 Quality of products 17 3.2 Range of choice 18 3.3 Value for money rating 19 3.4 Prices vs. Main Supermarkets 20

SECTION FOUR 21 FUTURE USAGE PLANS 21

INTRODUCTION

This report presents the findings of a grocery shopping survey carried out by

Behaviour & Attitudes during September 2005.

The survey is the latest in a series which began in 2002, designed to track the

impact of Aldi/Lidl in the Irish market.

The questionnaire for the survey was very similar to that used in earlier

phases of the tracker but with a couple of additional questions designed to

establish frequency of shopping in Aldi and Lidl, and items bought on the last

occasion.

The questionnaire was included in our Barometer survey for September 2005.

Barometer is a syndicated survey covering a nationally representative sample

of 1,200 adults. The bulk of the questionnaire for this survey focussed on

people within that sample who claimed to be mainly responsible for household

shopping: 676 people in total.

The sample for the survey is quota controlled to be representative of the

national population in terms of gender, age, social class, region and area of

residence.

All interviewing on the project was conducted by trained members of the

Behaviour & Attitudes fieldforce, working under supervision and within the

guidelines of AIMRO and ESOMAR.

3

4

NOTE ON REPORT FORMAT

Following on from this introduction we present a brief resume of the key

findings from the research. This is then followed by a more detailed

commentary supported by relevant charts and summary tables.

The report is completed by a set of technical appendices covering an analysis

of the sample, the sampling locations for the survey and a copy of the

questionnaire used. Full tabular results of the survey are available on

request.

SUMMARY & CONCLUSIONS

• The average household now spends an estimated €132 per week

on groceries; a 4% increase as compared to last year.

• However shoppers continue to believe that grocery price inflation is

running ahead of the recorded (authentic) levels of increase.

• Tesco seems to be gaining market share, primarily at the expense

of Superquinn and SuperValu.

• Although Aldi and Lidl are continuing to grow in terms of overall

usage:

o There is no real growth in the numbers choosing LRD’s for their

main shopping and …

o Only a minority of users shop in these stores regularly.

• Although Aldi and Lidl continue to be seen to offer lower prices and

good value, the gap relative to more established competition is seen

to be narrowing.

• As a result, prospects for future market gains by the LRD’s seem to

be slowing down.

5

CHAPTER ONE GROCERY PRICE PERCEPTIONS

1.1 Survey data confirms CPI increases

In each of the surveys in this sequence, respondents who claimed to be

responsible for grocery shopping for their households were asked how much

they normally spent on their grocery shopping in a typical week. The average

figure for this year comes out at €132 per household. This represents a 4%

increase on last year: very much in line with the pattern of increases recorded

in preceding surveys as can be seen below.

6

he pattern of price increases recorded here is very much in line with the

AMOUNT SPENT ON GROCERIES PER WEEK(Base: Shoppers - 676)

108106

103102

127106

133123

173133

150137

124127

123125

133124

121117

138138

131117

132127

123119All shoppers

Main ShopDunnes

Tesco

SuperValu

Superquinn

Aldi/Lidl

Any symbol group

Growth %

+3+3+4

+12+5

-

+3+2+7

-2+3-2

+9-11+30

+8-20+20

+1+3+2

= ’02= ’03= ’04= ‘05

T

evidence available from the Consumer Price Index.

7

s one would expect, there are some differences in spending patterns,

oadly

.2 A continuing conflict between perceptions and reality

arlier in this sequence of surveys we discovered that, if one asked people

a

the current survey, as we have just seen, the average household spends

other words, these consumers felt

A

depending on the main store used for grocery shopping. These tell a br

consistent story over time although some of the store data (where the base of

users is relatively smaller) is slightly more volatile over time.

1

E

how much they were spending currently and how much they were spending

year earlier, there was a strong tendency for people to exaggerate the pattern

of increase.

In

€132 per week. When these same people were asked how much they were

spending last year their average estimate was significantly lower - €112.

In that prices had inflated over the 12

reality, as we know from the preceding chart, the typical household last

ile

month period by approximately 18%.

In

year was spending €127 per week on grocery shopping. In short, the real

increase in grocery spending has been of the order of 4% over the year wh

people feel their expenditure has increased by 18%.

This pattern has been a consistent one over the four years of this programme

of research so there is an ever-widening gap between the actual increase in

grocery shopping expenditure and the intuitive belief that people have about

price increases. This gap is illustrated below:

LONG TERM PATTERN

8

Grocery PricesReal vs. “Intuitive” increases

(Index 2002 = 100)

111

115

159

135

100107

103

100100

110

120

130

140

150

160

2002 2003 2004 2005

Actual increase

Intuitive increase

Against that background it is not too surprising to find that a very substantial

proportion of shoppers feel that grocery prices are now much higher than they

were last year. This is evident in the following chart:

WEEKLY GROCERY SPEND

T

b

p

a

A

w

L

w

a

b

This year vs. last(Base: Shoppers - 676)

1%1%

17%

21%

60%

2%2%

12%

37%

47%

1%2%

22%

34%

39%

1%1%

17%

40%

40%

0%0%11%

37%

51%

2%2%

18%

41%

37%

1%3%

23%

43%

30%

0%0%

20%

42%

37%

1%2%

15%

40%

41%

Any shopping

High (130)

Med (91-130)

Total Spend €

Much higher

A little higher

About the sameA little/much lowerDon’t know/not sure

Low (-90)

Main

LRD Users

Ever2002 2003 2004 2005

here has been some amelioration in this tendency in the past couple of years

ut it is nevertheless the case that 4 in 10 shoppers believe that grocery

rices are much higher this year than last and a similar proportion believe they

re a little higher.

s can be seen from the chart, people who have a higher than average

eekly spend, are more prone to this perception of prices increasing sharply.

RD users (that is people who shop at Aldi and Lidl) are now very much in line

ith general perceptions of how grocery prices are increasing. Two years

go, Aldi and Lidl shoppers had a much higher than average propensity to

elieve that grocery prices were increasing particularly quickly. 9

CHAPTER TWO STORE USAGE

2.1 Changes in Usage over time The following chart summarises changes over time in the proportion of people

who ever shop at each of the main grocery options and those who do their

main shopping in each store.

STORE USAGE(Base: Shoppers - 676)

4% 45%5% 37%

7% 36%3% 15%

8% 33%8% 27%

10% 28%10% 21%

4% 11%8% 17%

6% 12%12% 20%

17% 33%19% 35%

22% 38%21% 38%

37% 58%26% 45%

26% 43%22% 43%

24% 46%26% 47%

22% 40%27% 45%

Dunnes

Tesco

SuperValu

Superquinn

Any symbol group

Any LRD

Main Shopping At all nowadays

2002200320042005

2002200320042005

2002200320042005

2002200320042005

2002200320042005

2002200320042005

The overall indicators would suggest that Tesco has fared particularly well

recently, primarily at the expense of SuperValu and Superquinn.

The proportion of people who ever do their shopping at LRD’s has increased

but the numbers claiming to do their main shopping at Aldi or Lidl have slipped

back from the peak recorded in 2003.

10

2.2 Market Share Estimates

In the surveys in this series we have attempted to make approximate market

share estimates. Shoppers are asked how much, out of every €100 they

spend on groceries, they would spend with each of the main retailers. The

resultant estimates are summarised below

MARKET SHARE ESTIMATES

T

g

B

D

s

S

(Based on average €100 spend)(Base: Shoppers - 676)

21%

3%5%

9%

20%

21%

21%

21%

4%

11%

6%

19%

21%

18%

20%

3%9%

7%

17%

22%

22%

16%

5%

12%

4%

15%

28%

20%

15%

5%

12%

5%13%

30%

23%

16%

6%

15%

4%

14%

30%

15%

20%

5%

9%4%

17%

24%

21%

All shoppers

Heavy Med Low

Dunnes

Tesco

SuperValu

SuperquinnLidlAldi

Other

Weekly grocery spend

2002 2003 2004 2005

his tends to broadly confirm the evidence from the preceding chart on

eneral levels of usage.

y these estimates, the market share for Tesco has grown significantly. The

unnes Stores’ share has been stable over the period, allowing for normal

ampling variations, while the indicators suggest some loss of share for

uperquinn and SuperValu.

11

The share estimate for Aldi and Lidl has varied from survey to survey:

reflecting the relatively small base of users. However the indicators are that

the 2005 market share is the highest recorded across the four years for the

LRD’s.

Aldi and Lidl seem to fare particularly well with those people whose grocery

spend falls into the medium category.

The following chart presents a further breakdown of the data by age, social

class and area.

MARKET SHARE ESTIMATES (2)

T

D

e

(Based on average €100 spend)(Base: Shoppers - 676)

8%

6%

13%

4%

14%

34%

20%

14%

6%

13%

4%

14%

28%

21%

22%

4%

10%

5%

16%

24%

19%

11%

6%

11%

6%

16%

31%

19%

14%

5%

12%3%13%

30%

23%

35%

3%

13%

3%

19%

13%

14%

11%

5%10%

6%

11%

33%

24%

22%

5%

14%

2%

20%

22%

15%

AGE

Dunnes

Tesco

SuperValu

SuperquinnLidlAldi

Other

-35 35-49 50+

CLASS

ABC1 C2DE F

AREA

Urban Rural

esco seems to be faring particularly well with younger urbanites.

unnes Stores market share is more heavily working class, urban and is very

venly distributed by age.

12

13

Aldi and Lidl seem to fare equally well with all shopper groups up to the age of

50. Their share is well spread in social class terms but is higher in rural than in

urban areas.

2.3 Aldi/Lidl Brand Status Check

The following chart summarises the key indicators in the performance of Aldi

and Lidl for 2005, with figures for 2004 shown in brackets.

B

r

a

I

v

f

BRAND STATUS CHECK(Base: Shoppers - 676)

Main grocery shop

Use monthly+

Ever shopped at

Ever visited

Available locally*

Aware of

* Within 5 miles radiusFigures in bracket are for 2004

(1)

(13)

(30)

(37)

(33)

(94)

(3)

(32)

(59)

(66)

(43)

(98)96%

46%

35%

18%

1%

*18% 33%

99%

66%

58%

39%

3%

*34% 41%(12) (34)

oth stores are almost universally known at this stage. There has been

elatively little change in the number of shoppers who fall within the catchment

rea of either store in the past 12 months.

n the case of Lidl there has been little advance in the numbers who have

isited or ever shopped at the stores. These indices are continuing to grow

or Aldi.

14

The main growth, for both stores has been in the number of shoppers visiting

them on a monthly basis. The numbers using either store for their main

grocery shopping have remained static.

This pattern of development was beginning to become evident over the past

couple of years so and, in the current survey, we added questions to establish

how often shoppers use either of the two stores. The relative frequency

patterns, for those who ever shop at either store are as follows:-

T

o

FREQUENCY OF SHOPPING IN ALDI/LIDL(Base: All shoppers at each store)

49%

18%

16%

17%

35%

21%

21%

23%Weekly+

Fortnightly

Monthly

Less often

Base: Unweighted (238) (392)

he frequency pattern for Lidl is higher than that for Aldi but for both stores

ccasional shoppers outnumber regular visitors.

15

2.4 A wide range of Items bought

The general perception is that shoppers with Aldi and Lidl tend to buy a

relatively narrow range of products. In fact, when we asked people which

items they had bought on their last visit, a very wide listing of items emerged,

as can be seen in the following chart

16

ITEMS BOUGHT ON LAST VISIT (1)Aldi & Lidl

Base: 376 223

52Not stated/dk107Other33Pickles/chutney/relish25Furniture46Flour55Nappies37Footwear66Rice/cous cous86Spirits77Nuts89Desserts/chilled desserts910Frozen chicken711Tools711Squash/fruit squash/cordials

139Tinned food (other)1011Chips1011Sauces/ketchup1012Fresh meat1212Pizzas1412Pasta/noodles816Electrical appliances

1215Beer1116Hardware1216Ice cream1515Pet food1915Confectionery1618DIY items1818Cakes1520Tinned fruit1819Soft drinks2319Frozen foods2121Cereals2123Bacon/Rashers2827Wine2928Household products2933Juices/fruit juices3335Detergents/washing powder3339Toiletries3441Cheese3143Toilet tissues/rolls3842Biscuits3945Fresh fruit & veg.4246Household cleaners

52Not stated/dk107Other33Pickles/chutney/relish25Furniture46Flour55Nappies37Footwear66Rice/cous cous86Spirits77Nuts89Desserts/chilled desserts910Frozen chicken711Tools711Squash/fruit squash/cordials

139Tinned food (other)1011Chips1011Sauces/ketchup1012Fresh meat1212Pizzas1412Pasta/noodles816Electrical appliances

1215Beer1116Hardware1216Ice cream1515Pet food1915Confectionery1618DIY items1818Cakes1520Tinned fruit1819Soft drinks2319Frozen foods2121Cereals2123Bacon/Rashers2827Wine2928Household products2933Juices/fruit juices3335Detergents/washing powder3339Toiletries3441Cheese3143Toilet tissues/rolls3842Biscuits3945Fresh fruit & veg.4246Household cleaners

% %

SECTION THREE EVALUATING THE ALDI AND LIDL OFFER

As in earlier surveys, respondents who used either Aldi or Lidl were asked to

assess the offering in these stores, under a number of headings:

3.1 Quality of products

The rating of product quality in both Aldi and Lidl improved between 2002 and

2003 but has fallen back slightly since then, as is evident here:

Toc: Next: Previous: 13

RATING THE LRD OFFER - Quality of Products –

(Base: All current users of each)

2%2%

17%

39%

32%

9%

2% 1%5%

30%

44%

18%

9%0%

4%

36%

34%

16%

5%2%

6%

33%

40%

13%

1%1%

14%

46%

26%

11%

1%1%

5%

37%

43%

14%

5%1%

7%

38%

36%

13%

3%1%

7%

36%

41%

12%Very high

Fairly high

About average

Fairly poor

Very poor

Don’t know

2002 2003 2004 2005 2002 2003 2004 2005

Very/fairly high 41 62 50 53 37 57 49 53

The 2005 ratings are a slight improvement on those recorded in 2004.

17

3.2 Range of choice

A similar pattern is evident in regard to ratings for range of choice

RATING THE LRD OFFER

T

s

a

- The range of choice -(Base: All current users of each)

2%4%

15%

43%

30%

6%

2%2%

8%

36%

39%

12%

10%2%

6%

47%

30%

6%

5%3%

7%

42%

37%

6%

1%2%

14%

46%

27%

10%

1%1%9%

46%

37%

7%

5%2%9%

47%

30%

6%

3%2%10%

44%

35%

6%Excellent

Very good

Fairly good

Fairly poor

Very poorDon’t know

2002 2003 2004 2005 2002 2003 2004 2005

here was a significant improvement in ratings under this heading for both

tores in 2003 as compared to a year earlier. These ratings fell back in 2004

nd have improved, slightly, in 2005.

18

3.3 Value for money rating

Aldi and Lidl continue to be very well regarded in terms of value for money but

their special proposition in this regard has slipped back quite considerably

since the peak recorded in 2003:

RATING THE LRD OFFER

T

f

d

- Value for money –(Base: All current users of each)

2%6%

13%

41%

39%

2%2%

5%

40%

51%

9%1%9%

38%

42%

5%2%

11%

48%

34%

1%5%

13%

47%

36%

1% 2%

10%

39%

48%

5%1%9%

42%

42%

3%2%

13%

44%

38%Very good value

Fairly good value

About average

Fairly/very poorDon’t know

2002 2003 2004 2005 2002 2003 2004 2005

he proportion of shoppers rating Aldi’s value for money as very good has

allen from 51% in 2003 to 34% in 2005. In the case of Lidl, the equivalent

rop is from 48% to 38%.

19

3.4 Prices vs. Main Supermarkets

This shift in attitudes is also evident if we consider the perceived pricing of

items, as distinct from value for money.

The vast majority of Aldi and Lidl shoppers still consider prices in these stores

to be lower than competitors. The number who would go so far as to describe

the prices in Aldi and Lidl as being much lower has declined quite sharply

however.

RATING THE LRD OFFER

In

mu

co

- Price Comparison with Main Supermarkets –(Base: All current users of each)

2%

46%

48%

6%1%

2%

56%

38%

1%3%

9%

40%

42%

9%

1%

5%

30%

50%

13%

1%

1%

42%

48%

8%2%

1%

50%

43%

5%1%

6%

36%

48%

8%1%

2%

33%

49%

12%2%Much/a little higher

About the same

A little lower

Much lower

Don’t know

2002 2003 2004 2005 2002 2003 2004 2005

the case of Aldi, 56% of their shoppers described prices in Aldi stores as

ch lower than competition in 2003. By 2005 this has fallen to 30%. The

mparable figures for Lidl show a decline from 50% to 33%.

20

SECTION FOUR FUTURE USAGE PLANS

Finally, current users of Aldi and Lidl were asked to describe their

expectations in relation to future shopping in the two stores. Their answers

are summarised below:

O

g

FUTURE USAGE PLANS(Base: Current users of each)

5%

9%

9%

46%

18%

7%

18%

5%4%

46%

19%

3%

11%

3%7%

59%

18%

3%

2%4%

7%

49%

18%

11%

15%

4%

5%

52%

18%

6%

9%

3%5%

55%

23%

5%

All shoppers2003 2004 2005

Will buy a lot more there

Will buy a little more there

The same

Less

Will not use

Don’t know

All shoppers2003 2004 2005

n the basis of these data, one might expect some slowdown in the rate of

ains by these stores in future.

21