Exclusive research for The Grocer looks at what drives shoppers to use alternatives to the big four. Liz Hamson reports
Jackie Vaughan, senior analyst at Claritas, says: “It’s interesting that non-food is such a low priority. People don’t have any expectations other than grocery.”
Customer service has thrown up one anomaly, she adds. Although the overall rating for customer service is very low in percentage terms, against an index of the national average (see tables), it is higher than average at Iceland, despite the fact that the chain does not major on it terms of marketing.
The findings will also challenge the beliefs of those retailers that see their growth prospects primarily in non-food. Only shoppers at the multiples expect a sophisticated offer, it suggests. In the second tier, consumers mainly want grocery.
The big four grocers are rightly proud of the 70% of the UK market they have carved for themselves. Their prices are growing ever keener, the choice of products ever wider and their customer service even sharper.
But what of the very sizeable 30% of shoppers who do not turn to the multiples for their regular main shop?
In an attempt to find out if their profiles match the preconceptions that are often touted by the industry, The Grocer commissioned exclusive research from consumer information company Claritas to reveal who chooses to shop outside the major multiples and why.
The company crunched the results of its main annual National Shoppers Survey of about one million households across the UK, profiling shoppers by age, income and household size. And the findings reveal that convenience, value for money and proximity are the main factors that influence shoppers to use the smaller multiples, c-stores and discounters for their main shop.
In comparison to the national average, they care little about the customer service, non-food offers or loyalty cards of which the major multiples boast. Just under 46% regard convenience as one of two key priorities for a main shop store, and 35.4% say price is a major influence while 32.3% value a store’s proximity. Only 0.5% are influenced by the non-food range, 2.8% take account of customer service and 7.9% the loyalty card.
When it comes to the c-stores, the survey suggests that consumers are sometimes prepared to forego quality and good value for convenience.
A third more Co-op shoppers than the national average cited convenience as their main reason for shopping there and only half the national average were driven by quality or price.
Vaughan comments: “It’s an unusual combination: usually if shoppers are not concerned about quality they are about price. With the Co-op, it’s totally about convenience - in stark contrast to the discount supermarkets.”
Any preconception that it is mainly housewives and pensioners who watch the pennies when it comes to the weekly shop is also called into question. While the overall percentage of 18- to 24-year-olds who shop for groceries is lower than in other age groups, a higher than average number shop at discounters such as Farm Foods, Netto and Iceland, while fewer than average in the age group shop at Marks and Spencer food halls, Somerfield or Waitrose.
For older shoppers who want to keep the cost of shopping bills down, value for money is often overriden by other considerations, suggests the survey. While shoppers over the age of 65 make up only 19.3% of Netto shoppers, they represent 31.3% of Kwik Save customers.
This could reflect lower awareness in this age group of the Netto brand, says Vaughan, but it is likely to have more to do with accessibility. “Kwik Save has high street presence whereas Nettos are often a bit out of the way. Even if you are bargain-driven, if you haven’t got the means to get there you’re not going to shop there.”
Other findings are more in line with expectations. The discounters attract a higher proportion of customers doing the family shop than do the other second tier grocers. Of Iceland and Netto shoppers, 38.3% and 37.2% respectively are from households with children, whereas only 10.4% of M&S’ shoppers have children at home.
The typical shopper at M&S is also older than average - over-65’s make up more than 40% of the customer base - indicating that quality and convenience respectively are key drivers for this age group.
There are not many surprises in household incomes either. Budgens, the Co-op, Farm Foods, Somerfield, Iceland, Kwik Save, Lidl and Netto attract a higher proportion than average of low-income earners - households bringing in less than £10,000 a year - with Farm Foods at more than twice the average.
M&S and Waitrose shoppers top the income table: 12.8% of M&S shoppers earn more than £50,000 a year against a national average of 7.4%, and nearly 40% of Waitrose shoppers earn over £35,000, against an average of 21.2%.
Jackie Vaughan, senior analyst at Claritas, says: “It’s interesting that non-food is such a low priority. People don’t have any expectations other than grocery.”
Customer service has thrown up one anomaly, she adds. Although the overall rating for customer service is very low in percentage terms, against an index of the national average (see tables), it is higher than average at Iceland, despite the fact that the chain does not major on it terms of marketing.
The findings will also challenge the beliefs of those retailers that see their growth prospects primarily in non-food. Only shoppers at the multiples expect a sophisticated offer, it suggests. In the second tier, consumers mainly want grocery.
The big four grocers are rightly proud of the 70% of the UK market they have carved for themselves. Their prices are growing ever keener, the choice of products ever wider and their customer service even sharper.
But what of the very sizeable 30% of shoppers who do not turn to the multiples for their regular main shop?
In an attempt to find out if their profiles match the preconceptions that are often touted by the industry, The Grocer commissioned exclusive research from consumer information company Claritas to reveal who chooses to shop outside the major multiples and why.
The company crunched the results of its main annual National Shoppers Survey of about one million households across the UK, profiling shoppers by age, income and household size. And the findings reveal that convenience, value for money and proximity are the main factors that influence shoppers to use the smaller multiples, c-stores and discounters for their main shop.
In comparison to the national average, they care little about the customer service, non-food offers or loyalty cards of which the major multiples boast. Just under 46% regard convenience as one of two key priorities for a main shop store, and 35.4% say price is a major influence while 32.3% value a store’s proximity. Only 0.5% are influenced by the non-food range, 2.8% take account of customer service and 7.9% the loyalty card.
When it comes to the c-stores, the survey suggests that consumers are sometimes prepared to forego quality and good value for convenience.
A third more Co-op shoppers than the national average cited convenience as their main reason for shopping there and only half the national average were driven by quality or price.
Vaughan comments: “It’s an unusual combination: usually if shoppers are not concerned about quality they are about price. With the Co-op, it’s totally about convenience - in stark contrast to the discount supermarkets.”
Any preconception that it is mainly housewives and pensioners who watch the pennies when it comes to the weekly shop is also called into question. While the overall percentage of 18- to 24-year-olds who shop for groceries is lower than in other age groups, a higher than average number shop at discounters such as Farm Foods, Netto and Iceland, while fewer than average in the age group shop at Marks and Spencer food halls, Somerfield or Waitrose.
For older shoppers who want to keep the cost of shopping bills down, value for money is often overriden by other considerations, suggests the survey. While shoppers over the age of 65 make up only 19.3% of Netto shoppers, they represent 31.3% of Kwik Save customers.
This could reflect lower awareness in this age group of the Netto brand, says Vaughan, but it is likely to have more to do with accessibility. “Kwik Save has high street presence whereas Nettos are often a bit out of the way. Even if you are bargain-driven, if you haven’t got the means to get there you’re not going to shop there.”
Other findings are more in line with expectations. The discounters attract a higher proportion of customers doing the family shop than do the other second tier grocers. Of Iceland and Netto shoppers, 38.3% and 37.2% respectively are from households with children, whereas only 10.4% of M&S’ shoppers have children at home.
The typical shopper at M&S is also older than average - over-65’s make up more than 40% of the customer base - indicating that quality and convenience respectively are key drivers for this age group.
There are not many surprises in household incomes either. Budgens, the Co-op, Farm Foods, Somerfield, Iceland, Kwik Save, Lidl and Netto attract a higher proportion than average of low-income earners - households bringing in less than £10,000 a year - with Farm Foods at more than twice the average.
M&S and Waitrose shoppers top the income table: 12.8% of M&S shoppers earn more than £50,000 a year against a national average of 7.4%, and nearly 40% of Waitrose shoppers earn over £35,000, against an average of 21.2%.
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