Mr Cowan assured that while many believe that the growth of discounters, like Aldi or Lidl, began with the recession, “it really started gaining traction around 2012, and now they command about 10% of the grocery market in the UK. In 2012, about 60% of Brits shopped in an Aldi or Lidl once a year; now they shop about 24 times, and on average there are 10 items in those baskets.”
Fresh produce is said to be one of the key categories that people seek out (the second largest after alcohol), and while “we know cheap prices attract them, other aspects also stand out, such as quality. It’s not just cheap stuff, and conveying this has all been down to the marketing and communication strategy in place for the past couple of years,” affirms Mr Cowan.
Kantar Worldpanel deals with four different retail channels in the UK: the big four (Asda, Tesco, Sainsbury’s and Morrisons), which account for 55% of the market share; the discounters, which are pushing 14%; high street convenience, and lastly, on-line stores. “In essence, we are getting more shoppers online and they are buying more frequently. Just within the produce market, 112 million pounds in the past year have moved from one of the big four into Aldi or Lidl and 10 million have moved from online into Aldi or Lidl.”
While we can infer from this that the big four have been successful in keeping their customers online, discounters are still growing, despite their smaller product ranges. “Again looking at produce, 1 in 4 baskets at the big four contain at least six different types of produce; in Aldi, it is more 1 in 3,” he affirms. This has collaterally pushed down their perceived value, so “it takes a lot more work just to remain constant in terms of sales, but the actual spending on produce at discounters has remained on par with that of the big retailers.”
In any case, in terms of product categories, he assures that, looking at 108 produce markets, between the end of 2011 and 2014, 65 categories grew ahead of the population growth, and some of those that failed to grow were turned around with actions and promotions. Looking at potatoes as a case study, “we tracked who was eating more or less, and in that period, potato consumption recorded a decline of about 20%.” With studies, it was able to determine what the challenges were, such as lack of knowledge about varieties or convenience, and to address them, successfully turning the situation around, with consumption stimulated across every demographic.
Ultimately, Mr Cowan states that “from my experience working with suppliers and retailers, it’s all about choosing battles; if you want to make prices your leader, by all means, do that; if you want the widest range on offer, by all means, do that, but if you want to remind people about quality, which often gets diluted if you start talking about cheap prices, too, that is where you have to focus. Retail battles can be very narrow and short-term wins, but to achieve long-term growth and security, it’s all about putting the consumer at the heart of it.”