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Consumer Shift in Shopping Preferences

28 February 2014

UK - Price is important but it is becoming less of a differentiator in the way consumers buy food, writes Chris Harris.

Speaking at the National Farmers Union annual conference in Birmingham, Edward Garner (pictured) from the market analysts Kantar Worldpanel, said there has been a shift in the way consumers are approaching purchasing food.

With the end of the era of price volatility, consumers are finding other incentives in making the choice of where they shop and what they buy.

In the UK now, consumers have started to move away from the traditional leading supermarkets of Tesco, Asda and Morrisons and have been choosing discounters such as Aldi and Lidl and the top range supermarket of Waitrose.

He said that Aldi had seen a growth of 30 per cent over the last year and Waitrose was growing at three times the average.

While more consumers are choosing discounters, Mr Garner said that the previous concept of the food being sold in them as cheap and poor quality, now the quality has risen while the stores have kept the prices down.

Discounters in the UK are also now moving more into the high streets, as they are in their home country of Germany, where in the past they had been largely out of topw large stores.

The only supermarket out of the big four – Tesco, Asda, Morrisons and Sainsbury – that is bucking the trend is Sainsbury.

In surveys of purchasing taken over the last three years, Tesco has seen its customer purchases drop by 1.5 per centage points, and Morrisons by nearly one percentage point, while Sainsbury’s customer purchasing had risen by 0.2 of a percentage point and Aldi, Lidle and Waitrose had seen their customer purchasing rise by 3.1 points.

While Aldi and Lidl had increased their share on the back of lower prices, particularly during the recession, and at the same time improving the quality of their food, Waitrose had improved its position through other drivers.

For the Waitrose customer, organic, locally produced, fair trade ethically produced, provenance and welfare were more important than price.

Similar changes in shopping habits have also been seen in the other major supermarket chains.

The value ranges in Tesco had seen sales decline while their premium “Finest Range” had increased sales.

While Asda was still strong on pricing, it had also shifted its emphasis towards fresh and chilled product.

Mr Garner said that Sainsbury had managed to achieve its success by balancing “value with values”.

Mr Garner said that Sainsbury customers had shown strong attraction to fair trade, environmentally friendly produced products as well as organic and the store’s premium range of Taste the Difference.

Mr Garner said that the supermarkets have been finding that own label produce has started to become a differentiator between chains and while budget ranges had seen sales fall, in the wake of the horsemeat scandal, premium ranges have been high performers..

He said that Tesco had seen a 12 per cent growth in its premium range and Sainsbury a nine per cent growth.

Justin KIng SainsburySainsbury CEO Justin King (pictured right) told the conference that the supermarket sources 50 per cent more British food than it did in 2007, which was the last time Mr King presented to NFU members.

And one of Sainsbury’s key 20x20 commitments made in 2011 is to double British sourcing by 2020.

Milk sales have increased by 38 per cent since 2007 but supplier numbers have remained largely the same, delivering £10 million to these farm business bottom lines.

“We believe in giving confidence and stability to farmers going forward,” Mr King said.

“I believe we have 145 years of backing British farming, over the last seven years since I was stood here last, we’ve shown that its real, long term and we’re prepared to invest.”

Chris Harris

Chris Harris

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