verdict – 27 years of retail research think retail, think verdict
DESCRIPTION
Verdict – 27 years of retail research Think Retail, Think Verdict. Food & Grocery Retail in 2012. Retailer reaction. Verdict overview. Economic Outlook. Shopping behaviour. Inflation & volumes. Verdict overview. UK market leader in retail research & analysis. - PowerPoint PPT PresentationTRANSCRIPT
Verdict – 27 years of retail research
Think Retail, Think Verdict
Verdict overview
EconomicOutlook
Shoppingbehaviour
Retailerreaction
Food & Grocery Retail in 2012
Inflation &volumes
Verdict overview
Who we are Our credentials
UK market leader in retail research & analysis
In-house team of analysts covering all major retail sectors globally
Strong relationship with leading retailers & unique in-house data
Culture of high quality analysis and independent opinion backed up by robust data
VerdictOverview
Verdict core output
What we do Products and services
SectorsConsumers Channels Locations Forecasts News, comment
Food & grocery
How Britain Shops
Where Britain Shops
Customer Satisfaction
Customer Insight
E-Retail
Remote Shopping
Home Delivery & Fulfilment
Click & Collect
Neighbourhood retailing
Convenience retailing
Regional briefs
Retail Futures:
Annual five year sector forecasts
Quarterly two year forecasts
by sector
+ online
Daily retail news via e-mail
Regular opinion & comment on new
stories and breaking news
Updates & comment on
retailer results
VerdictOverview
Space
Channels
New entrants
Costs
Demographics
Economy
Housing market
Treasury/BOE
Item Club, consensus
Press, media
Consumer trends
Retailers
Regulation
Market sizing & shares
Briefings
Interviews
Results meetings
Forecasts
Trade associations
Govt statistics
Historical data
Company accounts
Retailers
Press, media
Consumer research
How we do itSector and retailer research - methodology
VerdictOverview
Recovery from the recession
Changes to store development plans
Transactional websites
High/low growth areas
New product areas
Changes in price positioning
Provide strategic insight…
How we do itTrade interviews
VerdictOverview
Important to have a feel for the retailers you are profiling…
How we do itStore audits
Price positioning
Visual Merchandising
Stock Density
Fixtures
Mix of Product – Sub brands
Store format/Ambiance
Customers
VerdictOverview
Economicoutlook
EconomyYearly GDP view
2009
-4.4 +2.1
GDP growth patterns, year-on-year change (%)
2010 2011 2012 2013 2014 2015
+0.7 +0.6 +1.6 +2.3 +2.5
NormalityRecession RecessionRecovery
Economicoutlook
EconomyUnemployment (national)
5.4 5.7 7.8 8.0 8.2 8.6 8.3 7.7 7.5
2007 2008 2009 2010 2011 2012 2013 2014 2015
Unemployment rate by year, % LFS measure
Economicoutlook
EconomyInflation prospects
Inflation forecasts for RPI and CPI
2.83.2
4.34.0
-0.5
4.65.2
3.4 3.2 3.3 3.4
2.1 2.3 2.3
3.6
2.2
3.3
4.4
2.92.5 2.3 2.2
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
RPI measure CPI measure
%
Economicoutlook
2.9% 1.9% 2.0%
Retail inflation rates for 2012
EconomyInflation
Economicoutlook
EconomyConsumer confidence index
Nationwide consumer confidence index
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Nov
-04
Mar
-05
Jul-0
5
Nov
-05
Mar
-06
Jul-0
6
Nov
-06
Mar
-07
Jul-0
7
Nov
-07
Mar
-08
Jul-0
8
Nov
-08
Mar
-09
Jul-0
9
Nov
-09
Mar
-10
Jul-1
0
Nov
-10
Mar
-11
Jul-1
1
Nov
-11
Nationwide consumer confidence index Spending index
Economicoutlook
EconomyHousehold income
Real household disposable income (year on year change, %)
2009 2010 2011 2012 2013 2014 2015
+1.6% -0.2% -1.2% -0.7% +0.3% +1.1% +1.5%
Economicoutlook
Inflation &volumes
UK Food & Grocery MarketMarket growth
Inflation&
Volumes
0.3
2.93.2
2012
%
Volume growth Inflation Total growth
UK Food & Grocery MarketImpact of inflation on volumes
0.4
2.13.0
6.4
4.5
2.43.0 2.9 2.8 2.7 2.6
1.2 1.0
-0.9
0.9 1.10.1 0.3 0.5 0.5 0.5
1.6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
%
Food Inflation Food Volume
Inflation&
Volumes
UK Food & Grocery MarketWhat does low volumes mean for retailers?
0.80.3 0.2 0.2 0.4
3.2
2.4
3.2 3.5 3.4 3.3
1.7
-1.4
0.5
-1.4-1.7 -1.7
-1.5 -2.0
-1.0
0.0
1.0
2.0
3.0
4.0
2010 2011e 2012e 2013e 2014e 2015e
Grocers space growthGrocers sales density growth (current)Grocers sales density growth (constant)
Inflation&
Volumes
UK Food & Grocery MarketGrowth of expenditure online vs total
Inflation&
Volumes
4.8 5.6 6.5 7.5 8.5 9.5
124.1 127.9 132.0 136.4 140.7 145.1
2010 2011 2012 2013 2014 2015
£bn
Online F&G expenditure Total F&G expenditure
UK Food & Grocery MarketGrowth of sales in convenience vs total
Inflation&
Volumes
32.3 33.7 36.4 37.6 38.9
133.6 137.9 142.5 147.3 152.1 157.2
35.2
2010 2011 2012 2013 2014 2015
£bn
Convenience sales Total F&G sales
Shoppingbehaviour
UK Food & Grocery MarketWhat it all means for shopper behaviour
Shoppingbehaviour
Save money
Save time Trade up
Retailerreaction
Shopper trendsWhat it means for retailers
Retailerreaction
Be Cheaper
Enable Quicker
Offer Better
Better: Affordable indulgence Quicker: Top-up shopping
Cheaper: Pricing & promotions
Retailerreaction
Shopper trendsRetailer reaction
Better – affordable indulgence
Polarisation of demand
Quality & Freshness Alternative to dining out
Respite from austere climate
Disposable incomestight
Own label alternatives Price sensitivity
Shopper trendsRetailer reaction
Better – affordable indulgence
Quality perception – Cooking from scratch drives demand
Shopper trendsRetailer reaction
Better – affordable indulgence
Trading up in own brand – product innovation
Shopper trendsRetailer reaction
Better – affordable indulgence
Providing respite from restricted budgets, alternative to dining out
Better: Affordable indulgence Quicker: Top-up shopping
Cheaper: Pricing & promotions
Shopper trendsRetailer reaction
Convenience as driver of loyalty
45.3 45.0 46.1 48.4 46.2 47.4 45.842.335
2005 2006 2007 2008 2009 2010 2011 2012
%
Shopper trendsRetailer reaction
Quicker – more convenient shopping
Grocers expansion
Top-up shopping
Online shopping
Further consolidation
Space churn
New entrantsbring innovation
Declining salesdensities
Changing market dynamics for convenience retailers
Shopper trendsRetailer reaction
New strategies for gaining loyalty
Shopper trendsRetailer reaction
Quicker – Growth in c-stores
Shopper trendsRetailer reaction
Quicker – Innovation in convenience food
Fresh & food to go focus
Click & collect
Price focus
Engaging with local community
SpecialisationInsulation from inflation
Increased spend in convenience sectorLeverage local loyalty
Local retailer loyalty
Leveraging buying power
Retaining over recruiting
Grocers
Symbols
Indies
Better: Affordable indulgence Quicker: Top-up shopping
Cheaper: Pricing & promotions
Shopper trendsShopper reaction
Cheaper- pricing & promotions
Price sensitivity
45.8
47.348.0
49.9
47.1
42.142.6
46.8
48.6
50.9
48.2
40.0
45.0
50.0
55.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
%
UK Food & Grocery MarketInflation impacts price sensitivity
2.33.6
2.21.3
3.0
6.4
-9.0
4.7
-7.5
-1.9
6.1
14.5
1.5
-1.2-0.6
4.0
1.3 1.4
1.3
3.34.4
2.32.1
4.5
2.4 3.0
-0.1
2.2
2.10.4
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
%
Price sensitivity yoy change CPI Inflation Food Inflation
at round price
Price comparison
Multibuys Meal Deals
Extension of multibuys to meal solutions
Price focus
Discounting Meal planners & Fuel promotions
Culture of promotional activity
Shopper focus
Shopper trendsRetailer reaction
Cheaper – price focus
Shopper trendsRetailer reaction
Cheaper – Price comparison & matching
at round price
Price comparison
Shopper trendsRetailer reaction - Couponing
Cheaper – pricing and promotions
Retailer positioningWhere they are – and where they are going
Thanks for listening