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Grocery Retailing - Multiples vs Discounters - Ireland - December 2015

Grocery Retailing – Multiples vs Discounters - Ireland - December 2015

“The grocery retailing sector in Ireland continues to be driven by price as supermarkets compete to offer the best value to drive footfall and market share. However, the deep discounting over the last 18-24 months has dictated grocery retailing to the point where supermarkets have seen their points of differentiation eroded. As such, moving away from purely price-based competition and creating a new immersive shopper experience will help supermarkets stand out from rivals and re-establish a unique proposition.”

– James Wilson, Research Analyst

This report answers the following questions:

What types of products are Irish consumers buying from the discounters?
How much are Irish consumers spending on groceries?
How have Irish consumers’ shopping habits changed?
Where are Irish consumers doing their main grocery shopping?


OVERVIEW
What you need to know
Issues covered in this report
EXECUTIVE SUMMARY
The market
Figure 1: Indexed estimated total retail sales of own-label groceries, NI and RoI, 2010-20
Forecast
Figure 2: Indexed estimated total grocery retail sales, NI and RoI, 2010-20
Market factors
Food price declines welcomed by Irish consumers
NI consumers spend £40-60 on groceries per week; RoI consumers spend €60-119
Consumers feeling the economic recovery in RoI while NI consumers seeing finances squeezed
Discounters growing store numbers across Ireland
Grocery retailers adopting the ‘Living Wage’
Companies and brands
The consumer
Women claim to be the main grocery shoppers, men share responsibility equally
Figure 3: Who is responsible for grocery retailing in a household, NI and RoI, September 2015
Irish consumers prefer to buy groceries in-store
Figure 4: How consumers do their main grocery shop, NI and RoI, September 2015
Tesco most popular supermarket for main grocery shopping…
Figure 5: Stores that consumers do their main grocery shopping with (in-store), NI, September 2015
Figure 6: Stores that consumers do their main grocery shopping with (in-store), RoI, September 2015
…while Lidl preferred for top-up shopping
Figure 7: Stores that consumers do their top-up shopping with (in-store), NI, September 2015
Figure 8: Stores that consumers do their top-up shopping with (in-store), RoI, September 2015
Fresh fruit and vegetables the most popular food items at Aldi and Lidl
Figure 9: Types of food and drink grocery products bought at Aldi and Lidl in the last three months, NI
and RoI, September 2015
Personal care is the top non-food category at Aldi and Lidl
Figure 10: Types of non-food grocery products bought at Aldi and Lidl in the last three months, NI and
RoI, September 2015
Consumers not able to buy all the groceries they need from discounters
Figure 11: Agreement with statements relating to purchasing groceries from discount retailers, NI and
RoI, September 2015
What we think
ISSUES AND INSIGHTS
What types of products are Irish consumers buying from the discounters?
The facts
The implications
How much are Irish consumers spending on groceries?
The facts
The implications
How have Irish consumers’ shopping habits changed?
The facts
The implications
Where are Irish consumers doing their main grocery shopping?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Grocery sales continue recovery in 2015
Food price deflation entrenched in Ireland
Personal finances impacting weekly grocery expenditure
Growth of discounters putting pressure on traditional supermarkets
‘Living Wage’ the new frontier in grocery retailing
MARKET SIZE AND FORECAST
Grocery sales increase in 2015
Figure 12: Estimated total grocery retail sales, IoI, NI and RoI, 2010-20
Continued expansion of discounters to drive growth in grocery sales
Figure 13: Indexed estimated total grocery retail sales, NI and RoI, 2010-20
Own-label sales grow as supermarkets continue promoting and investing in ranges
Figure 14: Estimated total retail sales of own-label groceries, IoI, NI and RoI, 2010-20
MARKET DRIVERS
Loss leaders continue to drive food price deflation in 2015
Figure 15: Consumer price index vs food inflation, UK (including NI), 2011-15
Food prices also falling in RoI
Figure 16: Consumer price index vs food inflation, RoI, 2011-15
Average grocery spend £40-60 in NI and €60-119 in RoI
Figure 17: Average amount that consumers spend each week for household groceries, NI, September
2015
Figure 18: Average amount that consumers spend each week for household groceries, RoI, September
2015
RoI consumers see rise in spending power
Figure 19: Financial health of Irish consumers, RoI, October 2014-September 2015
Financial struggles continue for NI consumers
Figure 20: Financial health of Irish consumers, NI, October 2014-September 2015
Aldi and Lidl grow store presence in Ireland
Lidl the first to adopt ‘Living Wage’ in RoI and NI
Online grocery market offers potential for new entrants
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Aldi
Asda
Dunnes Stores
Lidl
Marks & Spencer
Sainsbury’s
SuperValu
Tesco
COMPETITIVE STRATEGIES – KEY PLAYERS
Aldi
Sales and growth plan
Marketing activities
Asda
Sales and growth plan
Marketing activities
Dunnes Stores
Sales and growth plan
Marketing activities
Lidl
Sales and growth plan
Marketing activities
Marks & Spencer
Sales and growth plan
Marketing activities
Sainsbury’s
Sales and growth plan
Marketing activities
SuperValu
Sales and growth plan
Marketing activities
Tesco
Sales and growth plan
Marketing activities
THE CONSUMER – WHAT YOU NEED TO KNOW
Women claim to be mainly responsible for grocery shopping
Men more likely to buy groceries online
Irish consumers’ shopping habits moving to an ‘as needs’ basis
Fresh goods and personal care the top categories at Aldi and Lidl
Improvements in product quality noticed at discounters
THE CONSUMER – WHO SHOPS FOR GROCERIES?
Irish women the main grocery shoppers in Ireland
Figure 21: Who is responsible for grocery retailing in a household, NI and RoI, September 2015
Figure 22: Who is mainly/wholly responsible for grocery retailing in a household, by gender, NI and RoI,
September 2015
Early Millennials least likely to grocery shop
Figure 23: Who is mainly/wholly responsible for grocery retailing in a household, by age, NI and RoI,
September 2015
THE CONSUMER – HOW DO IRISH CONSUMERS SHOP?
Irish consumers prefer in-store grocery shopping
Figure 24: How consumers do their main grocery shop, NI and RoI, September 2015
Online grocery retailing skewed towards younger generation
Figure 25: Consumers who have purchased groceries online, by age, NI and RoI, September 2015
Parents favour online grocery shopping
Figure 26: Consumers who have purchased groceries online, by presence of children in the household,
NI and RoI, September 2015
THE CONSUMER – WHERE DO IRISH CONSUMERS DO THEIR MAIN GROCERY SHOPPING?
NI consumers visiting Tesco for main grocery shopping
Figure 27: Stores that consumers do their main grocery shopping with (in-store), NI, September 2015
Women show a preference for shopping at Tesco
Figure 28: Consumers who have visited Tesco to do their main grocery shopping, by gender, age and
social class, NI, September 2015
Tesco preferred for main grocery shopping in RoI, Aldi a close second
Figure 29: Stores that consumers do their main grocery shopping with (in-store), RoI, September 2015
Late Millennials doing main grocery shopping at Tesco
Figure 30: Stores that consumers do their main grocery shopping with (in-store), by gender, age and
social class, RoI, September 2015
THE CONSUMER – WHERE DO IRISH CONSUMERS DO THEIR TOP-UP SHOPPING?
NI consumers prefer to top-up at Lidl and Tesco
Figure 31: Stores that consumers do their top-up shopping with (in-store), NI, September 2015
ABC1s topping up at Lidl and Tesco
Figure 32: Stores that consumers do their top-up shopping with (in-store), by gender, age and social
class, NI, September 2015
Lidl also the most popular top-up shop in RoI
Figure 33: Stores that consumers do their top-up shopping with (in-store), RoI, September 2015
Young children an influence on top-up shopping
Figure 34: Stores that consumers do their top-up shopping with (in-store), by presence of children in
the household, RoI, September 2015
THE CONSUMER – TYPES OF GROCERY PRODUCTS BOUGHT AT DISCOUNT SUPERMARKETS
Fresh fruit and vegetables popular at Aldi and Lidl
Figure 35: Types of food and drink grocery products bought at Aldi and Lidl in the last three months, NI
and RoI, September 2015
Children influencing the purchasing of fresh fruit and vegetables
Figure 36: Consumers who have bought fresh fruit and vegetables from Aldi and Lidl in the last three
months, by gender and presence of children in the household, NI and RoI, September 2015
Working consumers key purchasers of Aldi and Lidl’s bread
Figure 37: Consumers who have bought bread (packaged or baked in-store) from Aldi and Lidl in the
last three months, by work status, NI and RoI, September 2015
THE CONSUMER – TYPES OF NON-FOOD GROCERY PRODUCTS BOUGHT AT DISCOUNT SUPERMARKETS
Personal care the top non-food category at the discounters
Figure 38: Types of non-food grocery products bought at Aldi and Lidl in the last three months, NI and
RoI, September 2015
Women the main buyers of personal care products at Aldi and Lidl
Figure 39: Consumers who have bought personal care items at Aldi and Lidl in the last three months,
by gender and age, NI and RoI, September 2015
Children influencing the purchase of cleaning products
Figure 40: Consumers who have bought household cleaning (eg washing detergent, surface cleaner,
toilet cleaner) products at Aldi and Lidl in the last three months, by presence of children in the
household, NI and RoI, September 2015
THE CONSUMER – ATTITUDES TOWARDS DISCOUNT RETAILERS
Irish consumers see improvements in quality of discounter groceries
Figure 41: Agreement with statements relating to purchasing groceries from discount retailers, NI and
RoI, September 2015
Women and late Millennials not able to buy all groceries they need from discounters
Figure 42: Agreement with statements relating to purchasing groceries from discount retailers, by
gender and age, NI, September 2015
Figure 43: Agreement with statements relating to purchasing groceries from discount retailers, by
gender and age, RoI, September 2015
Early Gen-Xers to buy non-grocery items from discounters
Figure 44: Agreement with statements relating to purchasing groceries from discount retailers, by age,
NI, September 2015
Figure 45: Agreement with statements relating to purchasing groceries from discount retailers, by age,
RoI, September 2015
Older consumers most likely to notice improvements in product quality
Figure 46: Agreement with statements relating to purchasing groceries from discount retailers, by
gender and age, RoI, September 2015
Figure 47: Agreement with statements relating to purchasing groceries from discount retailers, by
gender and age, NI, September 2015
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Market size rationale
Abbreviations
APPENDIX – THE CONSUMER
NI Toluna
Figure 48: Who is responsible for grocery retailing in a household, by demographics, NI, September
2015
Figure 49: How consumers do their main grocery shop, by demographics, NI, September 2015
Figure 50: Stores that consumers do their main grocery shopping with (in-store), by demographics, NI,
September 2015
Figure 51: Stores that consumers do their main grocery shopping with (in-store), by demographics, NI,
September 2015 (continued)
Figure 52: Stores that consumers do their top-up shopping with (in-store), by demographics, NI,
September 2015
Figure 53: Stores that consumers do their top-up shopping with (in-store), by demographics, NI,
September 2015 (continued)
Figure 54: Stores that consumers do their top-up shopping with (in-store), by demographics, NI,
September 2015 (continued)
Figure 55: Average amount that consumers spend each week for household groceries, by
demographics, NI, September 2015
Figure 56: Types of food and drink grocery products bought at Lidl in the last three months, by
demographics, NI, September 2015
Figure 57: Types of food and drink grocery products bought at Lidl in the last three months, by
demographics, NI, September 2015 (continued)
Figure 58: Types of food and drink grocery products bought at Lidl in the last three months, by
demographics, NI, September 2015 (continued)
Figure 59: Types of non-food grocery products bought at Lidl in the last three months, by
demographics, NI, September 2015
Figure 60: Types of non-food grocery products bought at Lidl in the last three months, by
demographics, NI, September 2015 (continued)
Figure 61: Agreement with the statement ‘The choice of well-known brands available at discount
supermarkets has improved in the last 12 months’, by demographics, NI, September 2015
Figure 62: Agreement with the statement ‘The quality of fresh bakery products at discount
supermarkets has improved in the last 12 months’, by demographics, NI, September 2015
Figure 63: Agreement with the statement ‘The quality of fresh fruit and vegetables at discount
supermarkets has improved in the last 12 months’, by demographics, NI, September 2015
Figure 64: Agreement with the statement ‘I have visited discount supermarkets specifically to buy nongrocery
items I have seen advertised (eg electrical items, clothing, homewares)’, by demographics, NI,
September 2015
Figure 65: Agreement with the statement ‘I cannot buy all the groceries I need at discount
supermarkets’, by demographics, NI, September 2015
Figure 66: Agreement with the statement ‘I sometimes buy non-grocery items (eg electrical, clothing,
homewares) I did not plan to buy when shopping at discount supermarkets’, by demographics, NI,
September 2015
Figure 67: Agreement with the statement ‘I do more of my grocery shopping at discount supermarkets
than I did 12 months ago’, by demographics, NI, September 2015
Figure 68: Agreement with the statement ‘I would like to see a bigger choice of non-grocery items (eg
electrical) at discount supermarkets’, by demographics, NI, September 2015
Figure 69: Agreement with the statement ‘I shop at discounters because money is tight’, by
demographics, NI, September 2015
Figure 70: Agreement with the statement ‘The choice of items available within certain ranges (eg chilled
ready meals) at discount supermarkets is too limited’, by demographics, NI, September 2015
Figure 71: Agreement with the statement ‘I would be willing to use discounter-branded services (eg
banking, telephone, broadband)’, by demographics, NI, September 2015
Figure 72: Agreement with the statement ‘I would spend more of my weekly grocery budget at
discounters if they offered more of my favourite brands (eg Coca-Cola, Kellogg’s, etc)’, by
demographics, NI, September 2015
RoI Toluna
Figure 73: Who is responsible for grocery retailing in a household, by demographics, RoI, September
2015
Figure 74: How consumers do their main grocery shop, by demographics, RoI, September 2015
Figure 75: Stores that consumers do their main grocery shopping with (in-store), by demographics, RoI,
September 2015
Figure 76: Stores that consumers do their main grocery shopping with (in-store), by demographics, RoI,
September 2015 (continued)
Figure 77: Stores that consumers do their top-up shopping with (in-store), by demographics, RoI,
September 2015
Figure 78: Stores that consumers do their top-up shopping with (in-store), by demographics, RoI,
September 2015 (Continued)
Figure 79: Stores that consumers do their top-up shopping with (in-store), by demographics, RoI,
September 2015 (continued)
Figure 80: Average amount that consumers spend each week for household groceries, by
demographics, RoI, September 2015
Figure 81: Types of food and drink grocery products bought at Aldi and Lidl in the last three months, by
demographics, RoI, September 2015
Figure 82: Types of food and drink grocery products bought at Aldi and Lidl in the last three months, by
demographics, RoI, September 2015 (continued)
Figure 83: Types of food and drink grocery products bought at Aldi and Lidl in the last three months, by
demographics, RoI, September 2015 (continued)
Figure 84: Types of non-food grocery products bought at Aldi and Lidl in the last three months, by
demographics, RoI, September 2015
Figure 85: Types of non-food grocery products bought at Aldi and Lidl in the last three months, by
demographics, RoI, September 2015 (continued)
Figure 86: Agreement with the statement ‘The choice of well-known brands available at discount
supermarkets has improved in the last 12 months’, by demographics, RoI, September 2015
Figure 87: Agreement with the statement ‘The quality of fresh bakery products at discount
supermarkets has improved in the last 12 months’, by demographics, RoI, September 2015
Figure 88: Agreement with the statement ‘The quality of fresh fruit and vegetables at discount
supermarkets has improved in the last 12 months’, by demographics, RoI, September 2015
Figure 89: Agreement with the statement ‘I have visited discount supermarkets specifically to buy nongrocery
items I have seen advertised (eg electrical items, clothing, homewares)’, by demographics,
RoI, September 2015
Figure 90: Agreement with the statement ‘I cannot buy all the groceries I need at discount
supermarkets’, by demographics, RoI, September 2015
Figure 91: Agreement with the statement ‘I sometimes buy non-grocery items (eg electrical, clothing,
homewares) I did not plan to buy when shopping at discount supermarkets’, by demographics, RoI,
September 2015
Figure 92: Agreement with the statement ‘I do more of my grocery shopping at discount supermarkets
than I did 12 months ago’, by demographics, RoI, September 2015
Figure 93: Agreement with the statement ‘I would like to see a bigger choice of non-grocery items (eg
electrical) at discount supermarkets’, by demographics, RoI, September 2015
Figure 94: Agreement with the statement ‘I shop at discounters because money is tight’, by
demographics, RoI, September 2015
Figure 95: Agreement with the statement ‘The choice of items available within certain ranges (eg chilled
ready meals) at discount supermarkets is too limited’, by demographics, RoI, September 2015
Figure 96: Agreement with the statement ‘I would be willing to use discounter-branded services (eg
banking, telephone, broadband)’, by demographics, RoI, September 2015
Figure 97: Agreement with the statement ‘I would spend more of my weekly grocery budget at
discounters if they offered more of my favourite brands (eg Coca-Cola, Kellogg’s, etc)’, by
demographics, RoI, September 2015
UK RESEARCH METHODOLOGY
Consumer research
Sampling and weighting
Definitions
Qualitative Research
Further Analysis
Brand & Social Media Research
Trade research
Informal
Formal
Desk research
Statistical Forecasting

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