In January this year, astounded US consumers saw a man drive for half an hour in a car powered only by two AA batteries. It did only manage 1.9 miles per hour, and the driver only weighed seven stone four pounds, but it is still a fact that the same batteries that fit a digital camera have powered a car.
Ingenuity such as this from Panasonic has become something of a must for battery suppliers that are keen to re-inject some excitement into a market that has been highly price-promoted in the past year.
TNS data reveals that the market grew by less than 4% in value during the year to May 22, thanks to a proliferation of value-busting buy-one-get-one-free or four+four promotions on the biggest AA and AAA size alkaline sectors.
According to TNS, this activity depressed both the overall value growth of the market as well as the growth in grocers’ dominant share of battery sales compared with the previous year.
Such promotions look set to remain a dominant force in the alkaline sector, Panasonic marketing manager Tim Clark believes. His research reveals that consumers now buy more batteries per trip - on average 5.8% more batteries per trip than a year ago.
He says: “Go into any supermarket and you will see that there are still a lot of high-volume promotions out there. Customers simply demand them - they are aware of the number of appliances they have and the demands these make on their batteries.”
Batteries are one of grocers’ most important non-food impulse markets. Duracell research reveals that around 75% of battery sales are bought on impulse, which is why Morrisons, for one, believes that multibuy offers are an important way of bringing battery customers in store. “We are convinced, given the impulse nature of the battery market, that regular monthly promotions are successful at driving volume sales,” says Andrew Pleasance, home and leisure director at Morrisons.
According to Mintel, eight in every 10 consumers now owns a battery-powered appliance, most spending up to £4 on batteries in a three-month period. According to TGI, one in 10 are high spenders in the category, spending between £6 and £15 every three months.
Key influences on spend include affluence, age and presence of children. The
heaviest users, though, are most likely to be male and to be aged between 25-44. They are also likely to own high-drain appliances such as digital cameras and MP3 players, sales of which have rocketed over the past few years, taking with them the value of the specialist battery sector.
According to TNS, in the year to May 22, the specialist sector recorded a 20% value sales growth compared with the 1.6% growth rates seen in the general purpose (alkaline and zinc) market.
However, pundits are now beginning to ask whether this enforced trade-up to more premium-priced specialist batteries can continue. Recent Bank of England interest rates cut have hinted at a slowdown in consumer spending, something appliance retailers consider is behind the declining number of upgrade purchases.
According to Sandy Chadha, MD of distributor Supreme Imports, battery retailers are also beginning to cut down on their stockholdings.
Increasingly, appliances are being supplied with integral rechargeable batteries, TNS states, and, as the price points between primary and rechargeable batteries converge, premium-priced primary batteries could find themselves squeezed by a market previously considered a niche.
As Panasonic’s Clark admits: “There is a price ceiling below which the
rechargeable sector begins to become more financially viable.”
Energizer, as the strong number two in the primary market, has made strides on Duracell’s leading market position in the past year on the back of the performance of its alkaline Energizer Ultimate range, and is predicting that super-premium is set to become the fastest-growing sector.
However, as Clark warns, the new battery technologies will only sell if customers understand when to buy alkaline and when to pay for a more powerful battery. “The different chemistries on the market have created difficulties for the customer. It is up to us to work with retailers to make the fixture easier to shop.”