iri weekly fmcg news update - w/c 21st november 2016

IRI Weekly News updateYour window on the latest trends in Packaged Groceries

Stephen Hall

Friday 25th November

Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 2

• Nisa’s partnership with Center Parcs goes from strength to strength• Dunnes stores becomes Ireland’s largest supermarket• Lidl UK launches new Twitter price drop campaign • Solid quarter for Kingfisher• Morrisons boosts its convenience presence and brings back Safeway • Food-To-Go market set to grow by 35% over next five years• Disappointing week for Waitrose and John Lewis• Co-op to overhaul packaging to improve recycling levels• Black Friday in the UK: Retailer activities compared • Warnings of food price increases underline importance of British food production• Flooding causes Booths 2015/16 sales decline • Station shopping trends point to changing consumer habits as sales grow by 3.5%• Increasingly image-conscious men and baby boomers boosting the beauty market

Weekly News Summary – 21st November 2016


Nisa’s Partnership With Center Parcs Goes From Strength To Strength

Nisa has announced that its long term relationship with Center Parcs continues to go from strength to strength following a redevelopment of the ParcMarket store at Sherwood Forest.

Nisa said it has worked closely with the team at Center Parcs for a number of years after agreeing a supply contract back in 2013. The group said it played a key role in the development of the forest short break provider’s latest village supermarket development at its Sherwood Forest location.

The new Sherwood Forest ParcMarket has been extensively developed to a high specification and is Center Parcs’ latest design, with Nisa assisting in creating a unique layout. The development was eight months in the planning and the Nisaretail team worked closely with Center Parcs team to create bespoke ranges ideal for families.

Steve Leach, sale director at Nisa, said, “We’re delighted to see a further strengthening of Nisa’s relationship with CenterParcs with the development of their store at Sherwood Forest.

“Their commitment and store standards are second to none and an excellent example of a company trading very successfully under their own branding. We wish the team at Sherwood Forest every success with this latest venture and look forward to working closely with them for years to come.”

Nick Martin at Center Parcs added: “We’ve been Nisa members for many years. We’re long-term members and the relationship works very well. We’re delighted to extend that relationship further with this latest development and look forward to continuing high levels of service so that our guests can benefit from the fantastic shopping experience we deliver.”

Source: NamNews 21st November 2016


Dunnes Stores Becomes Ireland’s Largest Supermarket

The latest supermarket share figures from Kantar Worldpanel in Ireland for the 12 weeks ending 6 November 2016 show Dunnes Stores is now Ireland’s largest grocery retailer. The retailer increased its market share to 22.6% during the past 12 weeks to clinch the top spot – up from 22.0% this time last year.

David Berry, director at Kantar Worldpanel, explained: “Dunnes’ strong performance is largely down to its continued success in encouraging larger shopping trips via its “Shop & Save” promotional campaign. Persuading shoppers to add one extra item to every basket – worth €3.20 on average – may not sound like much, but across the country this adds up to an additional €2.8 million each week. Growth across a wide range of categories has contributed to the retailer’s overall sales increase of 6.7% year on year, with toiletries, alcohol, frozen food and confectionery performing particularly well.”

Now capturing 22.4% of grocery spending, SuperValu continues to enjoy a positive performance with an increase in sales of 2.3% year-on-year. More shoppers have chosen to visit the retailer this year but they have also spent more, parting with an additional 80c per trip on average.

Tesco remained on an upward trajectory, with value sales falling by just 0.6% in the past 12 weeks and volume sales increasing compared with last year: the grocer’s market share now stands at 21.4%.

Berry continued: “Lidl’s share of the market has increased slightly to 11.4%, with sales growth of 5.3%. Aldi’s strong performance continues with sales growing by 6.6% year on year – leading to a healthy increase in market share from 11.1% last year to 11.3% in the past 12 weeks. Aldi has seen the biggest boost to its shopper numbers during the latest quarter with an extra 40,000 households visiting the retailer and also returning more often.”

Source: NamNews 21st November 2016


Lidl UK launches new Twitter price drop campaign

Lidl has launched a new and innovative price campaign that encourages Twitter users to tweet about Lidl's products in order to lower their price in the run up to Christmas.

The Lidl Social Price DropThe Lidl Social Price Drop (LSPD) will run from Monday 21st November to Saturday 17th December. During this four-week period, a new product will be announced every Monday on Twitter at 8am and the price drop will close the following day at 6pm. Depending on how many tweets the products gets over the 1.5 days, Lidl will drop the price accordingly on the Saturday for shoppers to buy in-store. The price drop will be announced via social media platforms Twitter and Facebook on the Wednesday, giving shoppers time to plan their shopping trip.

Using social media in new waysThis new campaign shows once again how Lidl aims to stand out in the UK grocery market and do things differently, however always with the customer in mind. In order to get the campaign trending, Lidl asks Tweeters to use its established hash tag #LidlSurprises and name the product. In week 1, this is Lidl's premium private label Deluxe Whole Cooked Lobster 350g priced £5.99, which could be discounted by £3 to a maximum reduced price of £2.99.

What do we think?The weeks before Christmas can be the most costly time of the year for many, and so by allowing customers to play a role in reducing prices, Lidl is able to both promote itself and encourage shoppers to engage with Lidl on social media at an expensive time of year. Some celebrities have tweeted about how much they love the price drop, showing how Lidl is gaining wide attention on Twitter and how influential this platform can be. Other retailers can learn from this refreshingly different initiative, driving excitement over the festive period while promoting products and price using simple social media tactics.

Source: IGD 21st November 2016


Solid Quarter For Kingfisher

Kingfisher has posted solid third-quarter results, as strong growth in its domestic operations offset weak performance in France.

For period ended 31 October, group like-for-like sales rose by 1.8%, a slight slowdown from the 3% growth recorded in the previous quarter.

Amid store closures and restructuring of its UK business, like-for-like sales at the B&Q chain increased 3.5%, whilst sales at Screwfix jumped 12.7%.

However, in France, like-for-like sales were down 3.6% in a weak market. Less promotional activity contributed to Castorama suffering a drop of 3.8%, whilst sales at Brico Depot were down 3.3%.

Véronique Laury, Chief Executive Officer, said: “Q3 trading conditions have followed a similar trend to the first half. We have delivered another solid sales performance overall, trading in line with expectations. Sales have been driven by Poland and the UK, especially Screwfix, offset by softer sales in France.

“We continue to make good progress on our strategic milestones in the first year of our five year ONE Kingfisher transformation, and remain on track. In addition, we are gearing up for next year when the level of transformation activity will significantly increase. We remain confident in our ability to deliver our ambitious plan, based on always putting customer needs first, supported by the expertise and energy of our colleagues.”

Source: NamNews 22nd November 2016


Morrisons boosts its convenience presence and brings back Safeway

Morrisons is to increase its convenience market presence, using two initiatives, that will see it open ten new stores in a partnership with forecourt operator Rontec and revive the Safeway brand for wholesale and independent retailers.

Rontec joins Motor Fuel Group as trial partnerJust under a year ago Morrisons re-entered the convenience channel after its sell off of M Local with the the MorrisonsDaily concept. This was a two store trial with forecourt operator Motor Fuel Group. Today Morrisons announced a similar pilot that will see it open ten new forecourt stores with another forecourt group, Rontec. These sites will be supplied by Palmer & Harvey, who have worked with Rontec for over 40 years, and will sell a mixture of branded and Morrisons own brand products. Four sites will open before Christmas with another six opening in the new year.

Safeway brand revived for independent retailersIt is almost 11 years to the day that the last Safeway store disappeared from the high street in the UK. It was announced that in early 2017 the brand will be reintroduced to provide a range of products to independent and wholesale retailers. With over 30,000 convenience stores independently owned, the Safeway brand will give those retailers opportunity to build their ranges with access to differentiated products coming out of Morrisons sixteen UK factories.

Morrisons keen to rebuild presence in the channelWith the convenience sector forecast to outgrow the total market over the next five years it is clearly a place that Morrisons wish to operate in. These two initiatives would allow Morrisons to take a lower risk operation within convenience and branch out into wholesale to get a presence in the growing convenience food market. It also provides a further example of how forecourts may play a a big part of the future within the convenience sector. As forecourt site numbers continue to decline the revenue generated has levelled out as the remaining sites perform better with imporved grocery and foodservice offers.Commenting on the announcement Chief executive David Potts said: "These are two capital-light ways of growing in the convenience food market. By working with well-established partners and reviving the Safeway brand, we are making our products more accessible to more customers."

Source: IGD 22nd November 2016


Food-To-Go Market Set To Grow By 35% Over Next Five Years

IGD is predicting that the food-to-go market will grow by nearly 35% over the next five years to be worth £21.7bn, offering significant growth opportunities for suppliers.

IGD splits the market, currently worth £16.1bn, into five segments, with all expected to increase significantly by 2021:Food-to-go specialists have been growing their scale and impact across the UK and will be the strongest climbers, with a predicted worth of up to £7.1bn in five years

Quick service restaurants (QSRs) will be the second largest segment of food-to-go, and will be worth up to £6bn by 2021Coffee specialists will be the second-fastest growers and could be worth as much as £3.9bn by 2021

Food-to-go sales at convenience, forecourts and other retailers are predicted to be worth as much as £3.3bn in five years’ timeSupermarkets and hypermarkets will also expand their food-to-go ranges over the next five years, to be worth up to £1.4bn

Joanne Denney-Finch, IGD chief executive, said: “Over the next five years, we are forecasting growth of up to 35% for the overall food-to-go market, providing there is a favourable economic backdrop. Suppliers are seeking ways to expand, so the growth potential of this dynamic and rapidly shifting sector represents a really clear opportunity. However, food-to-go is a different market to grocery retail and requires a distinct approach to succeed.”

Looking at food-to-go and coffee specialists, Denney-Finch said: “Changing shopper habits will contribute greatly towards the strong growth of these two segments. We are seeing a rise in coffee culture and our research shows that almost half (48%) of drink on-the-go shoppers are purchasing hot drinks. Shoppers are also beginning to adopt food-to-go as a lifestyle choice which presents a clear opportunity for these operators, and coffee specialists are responding to this by focusing more on food and improved lunchtime options.”

On the growth of QSRs, Denney-Finch commented: “Almost all shoppers (92%) say that speed of service is key to their food-to-go experience, which is partly why quick service restaurants are forecasted to be the second-biggest segment in value by 2021.

“A new, modern generation of burger bars and an increased focus on healthier options is really helping to drive this part of the market. Some 20% of shoppers are purchasing lunch on-the-go more than twice a week, which is another key driver of growth for QSR operators.”Meanwhile, looking at supermarkets, hypermarkets, convenience stores and forecourts, Denney-Finch added: “Busy, flexible lifestyles mean shoppers are shopping little and often, and this culture is causing a boom in food-to-go for convenience stores, which have a strong forecasted annual compound growth of 5.8% . To ensure they meet this demand, we have seen convenience retailers introducing specialist food-to-go counters in their stores, as well tailoring their ranges to the different times of the day shoppers purchase this category.

“Supermarkets and hypermarkets are also increasingly thinking about their food-to-go offering and have been trialling new formats, counters and ideas in-store. It’s obviously appealing to shoppers, as our research shows that supermarkets are the most popular place to buy a drink on-the-go (30%) and breakfast-on-the-go (27%).”

Source: NameNews 22nd November 2016


Disappointing Week For Waitrose And John Lewis

Sales data for Waitrose and John Lewis covering the seven days to 19 November, suggests both chains had a slightly disappointing week.

At Waitrose, sales were unchanged on the same week last year, despite a boost from customers beginning to prepare for Christmas. The group said that turkey and frozen party food sales were up 15% and 28% respectively, whilst Christmas homeware sales jumped 30%.

Overall, sales in the ambient category were down 1.5%, whilst sales in Chilled, Fruit, Vegetables & Horticulture, and Bakery increased 1%. The Meat, Fish, Frozen & Dairy category saw sales slip 0.2%, whilst Home & Leisure rose 11.8%.At sister chain John Lewis, store sales fell 2.6%. “With five weeks to go to Christmas people are beginning to decorate their homes but seem to be waiting for the Black Friday deals to do much of their gift buying,” said Director of Shop Trade, Maggie Porteous.

Sales in the chain’s Home department were up 0.6%, whilst fashion sales dipped 0.4%. However, the electricals department, where customers expect to see the biggest Black Friday deals, was the worst performer with sales down 8.2%.

Source: NameNews 23rd November 2016


Co-op To Overhaul Packaging To Improve Recycling Levels

The Co-op has launched a plan to have 80% of all its own brand packaging recyclable by 2020 as part of efforts to improve current low levels of recycling.

The society is calling on other retailers to follow its lead on developing new packaging after finding that two thirds of allplastic packaging used for consumer products in the UK is being sent to landfill or incineration with only one third being recycled.

The Co-op’s study also found that only half a million of the 1.5 million tonnes of recyclable plastic waste created every year is being reused as intended. It said the problems lie with a lack of knowledge about which packaging can be recycled along with local authorities lacking the facilities to deal with it.

Iain Ferguson, Co-op Environment Manager, said: “It is shocking that such a small percentage of plastic packaging is being recycled, especially materials that are already easy to recycle like plastic bottles. We are concerned that so much still goes to landfill every year.

“We need to stop thinking about this plastic as a waste and start to use it as a resource. What is needed is a co-ordinated response to the problem. This should start with retailers and major brands listening to recyclers and developing packaging that is better for recycling.

“Our long term ambition is for ALL packaging to be recycled where it can be, and we are making a bold start by setting a target that, by 2020, 80% of our products will have packaging that is easy to recycle.”

Source: NameNews 23rd November 2016


Black Friday in the UK: Retailer activities compared

Three years on from Asda bringing Walmart Black Friday to the UK, retailers are deploying learnings from previous experience to create an event that attracts pre-Christmas footfall without disrupting store operations or risking customer disappointment. Here we round up the activities of the major players.

Tesco: Event extended to 11 daysThis year Tesco has broadened its Black Friday event, spreading it over a longer time frame and involving more stores, a move that should improve on-shelf availability and broaden the event's reach to more customers. Black Friday activity will stretch from November 21st to Thursday 1st on Tesco Direct and over 700 stores will offer promotions from Friday November 25th. Some 650 lines will be on promotion during the Black Friday event, up from 200 items last year. Discounts of up to 50% are being offered on electricals, toys and home lines.

Morrisons: Food and drink focus Morrisons Black Friday concept builds on its WIGIG promotions offered through the year, but focuses on food and drink lines. Deals include Prosecco and beer kegs for £10, Serrano ham for £32 and whole lobsters. Offers are spread over five days and promoted with the strapline "Black Five days - why wait 'til Friday". Morrisons is also supporting the event with a fuel promotion: Customers spending £50 or more in-store this week will receive a voucher saving them 10p/litre.

Sainsbury's: one day event onlySainsbury's this year is limiting the event to just the Friday and focusing it on a limited range of electricals. Example products include a Dyson V6 vacuum cleaner for £185 and a 40 inch TV for £150. Deals are advertised online but will only be available from a selection of larger stores. Sister fascia Argos has however spread activity over 13 days, with deals available across technology, toys and domestic appliances.

Asda: not taking partLike last year, Asda has again chosen not to participate in Black Friday activity this year, still scarred by negative publicity surrounding the frenzy created in some stores in 2014. To explain its position, Asda's PR team has released a "mannequin challenge" tongue-in-cheek video featuring 'frozen' colleagues coping with a flash sale. “Last year we said that we were stepping away from Black Friday because, as much as we had developed a well organised and executed event the feedback from our customers was clear that they didn’t want thepressure of a ‘flash sale’ and preferred to know we were offering low prices throughout the festive season,” explained Russell Craig, media relations director for Asda.

High street discounters: opportunity to sell higher ticket itemsPoundland is using Black Friday to sell a range of electricals, fragrances and toys, priced well beyond its usual one pound price point. Promoted products online include a Star Wars Loopin Chewin game £5 and a Daewoo Air Fryer for £35. B&M meanwhile promises its biggest ever Black Friday activity with deep discount deals available on the day itself only.

Source: IGD 24th November 2016


Warnings Of Food Price Increases Underline Importance Of British Food Production

The NFU has said that the recent warnings of food price rises next year adds gravitas to the need for a “strong, secure and viable” domestic food production system in the UK.

A host of retail commentators have suggested the nation’s reliance on imported food combined with the low value of sterling will result in higher food prices in supermarkets.

Meurig Raymond, NFU President, said that these warnings demonstrate the danger of being increasingly reliant on imported foods. He commented: “The nation’s self-sufficiency in food is falling. Whilst we could not and would not want to be entirely self-sufficient, today’s warnings demonstrate the potential impacts of becoming more and more reliant on the rest of the world to feed us, especially in these times of volatility. Britain currently produces 61% of the food it needs tofeed itself. Some sectors like horticulture are much worse.”

Raymond added: “Not only do Britain’s farmers play a vital role in feeding the nation, British farming can be the solution to so many other issues after Brexit. Farming is the bedrock of the UK’s largest manufacturing industry – food and drink –which is worth £108bn and employs 3.9 million people.

“Along with food self-sufficiency, the economic importance of the farming sector and its role as a key employer is why we have to ensure that British food and farming has a viable and resilient future.“Our focus now is to make sure retailers, food service and food processors as well as MPs and shoppers Back British Farming.”

Source: NamNews 24th November 2016


Flooding causes Booths 2015/16 sales decline

2015 Lake District flooding prevented Booths from growing its business by +0.7%.

Total sales slip by -0.7%Storm Desmond, which struck in December 2015, centred around Cumbria, parts of Lincolnshire and the Scottish Borders and seriously affected many of Booths' northern stores. Subsequent temporary store closures resulted in an adverse effect on total sales performance of -1.4%.

With overall sales down by -0.7% to £276.6 million, the adverse weather of last December prevented what would have been a year of growth for Booths of +0.7%. Booths has also referred to the challenging trading conditions created by overall market deflation, heavy discounting and "a tight consumer market".

Booths branded products to receive greater attentionWith regards to the future, Booths confirmed its commitment to increasing its emphasis on Booths branded products; signalling continued opportunities for strategic partnerships with local suppliers.

Booths private label has undergone a significant brand overhaul in recent years to deliver a more consistent look and feel, enabling the retailer to link the food values for which its stores are renowned with its own products. The decision to forego tiered options in favour of a single tier, delivers simplicity and communicates the retailer's uncompromising dedication to producing the best possible food at an affordable price.

Source: IGD 25th November 2016


Station shopping trends point to changing consumer habits as sales grow by 3.5%

Coffee shops and ‘food on the go’ purchases showed the strongest growth with the equivalent of 4.8 million cups of coffee sold in the quarter.

Asian food outlets and grocery sales were also strong sector performers across Network Rail’s managed stations, with 10% and 6% growth recorded respectively.

Overall sales growth was strongest in London with King’s Cross at 13% followed by Paddington at 9%. Outside London, Manchester Birmingham and Glasgow also performed well with respective growth of 10%, 8% and 6%.

The largest Network Rail managed stations by sales value were Waterloo at £27 million, Liverpool Street at £23 million and Euston at £21 million.

The number of people shopping at stations as a percentage of total station visitors was in line with the previous quarter at 31%.

Network Rail said its ongoing investment at stations across the UK, including Birmingham New Street, King’s Cross, Glasgow Central and Manchester Piccadilly, has helped deliver stations that are not just places to travel to and from, but destinations in their own right.

This investment is continuing with retail enhancement projects underway at London’s Liverpool Street, Paddington, Euston and London Bridge stations.

David Biggs, Network Rail’s managing director of property, said: “The trend in our results reflect the changes in how consumers are choosing to shop. Busy commuters and other people who use our stations want to be able to shop at a time and place that works for them. And that is why the upgrades we’ve made and are continuing to make to stations across Britain are proving so popular.

“Station retail investment is improving stations for our customers, while crucially generating vital funds to reinvest back into the railway.”

Source: Retail Bulletin 25th November 2016


Increasingly Image-Conscious Men And Baby Boomers Boosting The Beauty Market

Although image-consciousness is a trait traditionally associated with women and young adults, men and older generations are becoming more susceptible to its influence, as their desire to impress peers and colleagues is growing, according to consumer insight firm Canadean.

The company’s report states that the increasingly visually-oriented culture of society often means consumers associate image with success. While women are 1.3 times more likely to feel under pressure to look good than men, both genders associate appearance with success in personal and professional lives, with 66% of women and 61% of men subscribing to this belief.

The belief that image correlates with success is strong across all age groups, with over half of consumers agreeing. Young adults aged 16-24, however, are likely to be most influenced by this notion, with 65% agreeing, decreasing to 60% among those aged 55 and over.

According to Veronika Zhupanova, Analyst for Canadean: “This trend reflects how image-consciousness is catching up with men and baby boomers, demonstrating narrowing gender and age disparities in the beauty market.”

The increasing number of occasions when men use skincare products exhibits this trend. For example, among major global economies, men used skincare products on 453 billion occasions in 2011, which shot up to 557 billion occasions in 2015. Meanwhile, as image-conscious consumers age, the desire to maximize appearance among the older generation will increase.

Zhupanova notes: “With image-consciousness becoming ever-more pervasive among aging populations in developed economies and the pension age rising, competition to look good among this demographic will drive demand in categories such as anti-aging skincare and make-up, as consumers seek to impress employers and appear as dynamic as younger colleagues.”

Amongst the young, social media, now a popular daily ritual, can be a significant driver of image-consciousness. “Selfie” culture encourages the taking of close-up photographs as a means of self-expression and impressing peers. The close-up nature of the shots, however, means potential for skin imperfections to be captured is high, and may encourage people to seek out products to minimize this.

Zhupanova continues: “While there have been a number of launches targeting photo occasions for young adults, such as Estee Lauder’s Flash Photo Powder, older consumers remain overlooked despite increasing social media use. This demographic offers prime opportunities in the make-up and skincare categories to innovate in line with the latest trends, such as the desire to be always“photoready” during busy days. In order to make the most of this opportunity, companies should be subtle in their marketing towards older consumers, emphasizing the important role photos have in making memories, for example.”

Source: NamNews 25th November 2016

http://store.globaldata.com/market-reports/consumer/trendsights-analysis-image-consciousness-exploring-consumers-attitudes-towards-image-and-beauty?utm_source=mediacenter&utm_medium=pr&utm_campaign=161121a_cd_pr_image_consciousness&utm_nooveride=1

IRI Weekly News updateYour window on the latest trends in Packaged Groceries

Stephen Hall

Friday 25th November