A consumer research expert has branded Tesco “paranoid” said Morrisons’ lack of online facilities a “glaring omission”, and doubted the short-term performance of the discounters in the UK market.
In giving an insight into shopping habits in the UK, Ed Garner, communications director at the recently rebranded Kantar Worldpanel, told delegates at the FARMA conference this week that the recession was hard to detect in the grocery market and competition is notably fierce.
Garner studied each retailer in detail, notably suggesting that Marc Bolland may have a tough task ahead at Marks & Spencer, with consumer loyalty slipping and the introduction of brands into the retailer likely to prove tricky, as he takes up the role of chief executive.
The research specialist said the German discounters, Lidl and Aldi, which had seen benefits in the recession, were being hit hard by euro-sterling issues and a lack of repeat purchasing, and urged them to simply open more stores to increase their customer bases.
He praised the UK’s number-one supermarket for its Tesco Finest range, which contributed to a better Christmas 2009 than 2008, and said “it has a broad range of price points and store formats - they are paranoid about everyone else, but at least it is not complacent”. According to latest figures, Tesco has slightly increased its market share to 30.3 per cent, with Asda at 16.9, Sainsbury’s 16.1 and Morrisons 11.7 per cent.
Garner said: “Morrisons much prefers to have price reductions than multi-buy offers. It has been phenomenally successful in the last few years and its smaller formats are likely to do well. The one glaring omission is its lack of online shopping but that could easily change.
“At Asda, their approach has been ‘less is more’ - rather than offering BOGOFs and saying the products are cheap, they have used messages about reduced packaging and reduced energy, leading to lower prices.”
Garner offered advice to FARMA delegates, many of whom own one or two retail outlets and showed concern at the strength the multiples hold on the UK market.
He said: “You can differentiate yourself with provenance, service levels, providing an excellent shopping experience and, in that environment, price slips down the agenda for shoppers.
“It is always simple when supermarkets are nearby - you can feed off their traffic if you create a point of difference. The one thing you can’t do is take them head on.”
Will Edmonds, owner of Roots at Rushwick agreed. He said: “Our shop directly benefits from having a supermarket nearby. The traffic comes past us and the fact we have more than 20 unique products and a number of diversified attractions draws people in.”
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