Seven ways supermarkets are evolving
Discounters
Customers are shopping around more to save money. German chains Aldi and Lidl – which are substantially cheaper than the main chains on many basic items – now control 8.3% of the £175bn UK grocery market, up from 6.7% a year ago, with sales growing at up to 30% a year. Major supermarkets are being forced to cut prices to keep customers. Industry research body IGD predicts that sales at discounters will double in the next five years.
Convenience stores
Shoppers are deserting big edge-of-town stores, preferring to shop little, local and often. Modern lifestyles mean people are less likely to plan their meals too far in advance while Tesco and Sainsbury’s decision to open small local stores has helped upped standards across the board so there’s fresher, more attractive food to buy at the corner shop. Industry research body IGD forecasts that sales in small neighbourhood stores will increase 31%, to £49bn, by 2019.
Eating out
Eating out is no longer an occasional treat, but a way of life, with breakfast on the go, lunch in a coffee shop and takeaways for dinner. Every pound spent in those establishments means less cash in supermarket tills. The eating out market is expected to increase 3% this year, the highest level of growth since the recession started, according to Allegra Foodservice.
Online
All the major supermarkets are having to invest in costly home deliveries or “click and collect” services. Online grocery sales are up 17% on last year and now account for £1 of every £20 spent on food. Fashion sales – once a big profit centre for out-of-town grocers – are also shifting online.
Big stores
Nearly 75% of groceries are still bought in large supermarkets, but they’re in decline; analysts say sales through big stores are down 10% on last year. Tesco is bringing in other retailers, opening restaurants and soft play areas to fill unwanted space and has started mothballing unwanted stores.
Waste reduction
Environmental concerns and financial worries have got Britons shopping more carefully to cut down on waste. The volume of food sold is also declining as people consume fewer calories. Household food waste dived by a fifth between 2007 and 2012, saving UK consumers almost £13bn, according to the government-backed waste reduction quango Wrap. But we still throw away more than 7m tonnes of food and drink a year.
Slowing inflation
Food price rises are virtually zero – which hits sales growth. The cost of fresh produce is down about 5% this year as the result of good harvests. Potato prices are down 20%, according to Sainsbury’s. Changes in exchange rates and cheaper fuel prices have also helped reduce the cost of goods.
source: theguardian.com
