The strategic review undertaken by Sainsbury confirms how challenging and competitive food retailing has become in the past three years.
The announcement coincides with the lowest ever market share for Sainsbury for total till (food and non-foods) at 15.6% on Homescan TradeTrak in the 12 weeks to October 2. This time last year Sainsbury’s share was 15.9%. However, for the same period two years ago topline share was 16.9% and in 2001 it was 17.7%, suggesting that while trading remains difficult for Sainsbury there has been a slowing down in the loss of market share in the past 12 months.
The new kid on the block is of course Morrisons, currently number four in share of trade terms at 14.5% but now the number two for shopper penetration when both the Safeway and Morrison formats are included.
Over a typical three-month shopping cycle, which takes into consideration a range of shopping missions, ACNielsen research shows that 61% of all GB households visit Tesco, 47% shop at either Morrisons or Safeway while Sainsbury and Asda each attract 43% of shoppers (Homescan 12 weeks to Sept 18 2004).
While four-weekly penetration continues to fall at Safeway as stores are converted, it is rising in Morrisons and in the most recent four weeks is close to 20% and about to overtake Safeway.
Now that prices and ranges are aligning and conversions are well under way, this new opportunity to shop at Morrisons gives the superstore retailer a sling shot in the run-up to Christmas. Shoppers will want to trade up for certain foods - a trend that should also benefit Sainsbury - but at Morrisons it will be about increasing the size of the shop. Average spends per customer seasonally peak at about £120 at Sainsbury and above £130 at Tesco and Asda. In the Morrisons group stores the spend per household is between £71 and £82, but typically increases to over £100 later in the year.
So a reinvigorated Sainsbury will be competing on three fronts: on quality and service against a smaller but successful Waitrose; with the enlarged Morrisons which has more shoppers nationally and a proven value-driven customer offer; and head-to-head with price-conscious Asda and Tesco.
Tesco is having one its best ever years, with total till share of trade again increased to 29.1%.
The announcement coincides with the lowest ever market share for Sainsbury for total till (food and non-foods) at 15.6% on Homescan TradeTrak in the 12 weeks to October 2. This time last year Sainsbury’s share was 15.9%. However, for the same period two years ago topline share was 16.9% and in 2001 it was 17.7%, suggesting that while trading remains difficult for Sainsbury there has been a slowing down in the loss of market share in the past 12 months.
The new kid on the block is of course Morrisons, currently number four in share of trade terms at 14.5% but now the number two for shopper penetration when both the Safeway and Morrison formats are included.
Over a typical three-month shopping cycle, which takes into consideration a range of shopping missions, ACNielsen research shows that 61% of all GB households visit Tesco, 47% shop at either Morrisons or Safeway while Sainsbury and Asda each attract 43% of shoppers (Homescan 12 weeks to Sept 18 2004).
While four-weekly penetration continues to fall at Safeway as stores are converted, it is rising in Morrisons and in the most recent four weeks is close to 20% and about to overtake Safeway.
Now that prices and ranges are aligning and conversions are well under way, this new opportunity to shop at Morrisons gives the superstore retailer a sling shot in the run-up to Christmas. Shoppers will want to trade up for certain foods - a trend that should also benefit Sainsbury - but at Morrisons it will be about increasing the size of the shop. Average spends per customer seasonally peak at about £120 at Sainsbury and above £130 at Tesco and Asda. In the Morrisons group stores the spend per household is between £71 and £82, but typically increases to over £100 later in the year.
So a reinvigorated Sainsbury will be competing on three fronts: on quality and service against a smaller but successful Waitrose; with the enlarged Morrisons which has more shoppers nationally and a proven value-driven customer offer; and head-to-head with price-conscious Asda and Tesco.
Tesco is having one its best ever years, with total till share of trade again increased to 29.1%.
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