As some household names have disappeared from our high streets all together, no grocery retailer has yet succumbed to the same fate, thankfully. There seems to be an invisible layer of insulation that’s protecting them against the forces of the recession that’s hit the rest of retail industry. In fact, you could almost say that the UK’s retail food sector is thriving. People will always need to eat, after all.
Admittedly, none of us know what’s around the corner, but there are certainly deals to be had on everything as retailers kicked off 2009 with an aggressive price cutting war, with Asda and Tesco leading the way. And it’s not just food items that are on the hit list. Tesco recently slashed the prices of more than 700 of its clothing lines in a bid to lure customers away from cost-cutting heavyweights Primark and Matalan.
British supermarkets are becoming even more competitive, driving prices down to lure shoppers in a move to defend themselves against the likes of veteran discount chains Lidl and Aldi who have long reigned over the price-conscious consumer. These stores have seen a steady stream of customers who have ventured through its doors for the first time. These simple, no nonsense stores, renowned for low prices and low costs, are drawing customers away from larger, more expensive stores.
The Telegraph reports that Lidl’s car parks are now full of BMWs, Mercedes and Audis as it attracts more professionals to its stores.
The recession has forced consumers into shopping differently. It’s not just where they shop that’s changing; it’s how they’re shopping, and there are some interesting trends emerging amongst today’s cash-strapped consumers in terms of what they’re actually buying once they’re in store.
The weakening economy is driving people away from pubs and restaurants so as a result, more families are eating at home. The introduction of meal deal promotions such as M & S ‘Dine in for £10’ and Sainsbury’s ‘Feed your family for a fiver’ have been well timed to take advantage of this trend. And this in turn, has seen the return of the dinner party.
The Telegraph reports that sales of wine have rocketed by almost 200% as dining in has become the new eating out.
There are increasing levels of brand disloyalty as consumers go without their favourite brands in favour of own brand goods. Sainsbury’s ‘Switch and Save’ campaign actively encourages consumers to opt for its own label goods, whilst Tesco offers a lower priced own brand alternative to more expensive premium brands when shopping online.
It’s also what people are buying that’s changing. In
Asda’s Pulse of the Nation survey of 10,000 shoppers, it reports that UK consumers are turning off ready meals in favour of fresh fruit and vegetables and core ingredients, of which sales are up by 43%, as people are cooking meals from scratch. The store has also noticed a significant uplift in
sales of Tupperware and freezer bags as people are storing or freezing meals, making their food last longer and reducing wastage.
Also on the up are sales of seeds. We’re growing our own vegetables and herbs, reverting back to the lifestyle seen in sitcom The Good Life in the 1970s, making ‘growing your own’ fashionable again. There are also reports of increased sales of food processors and bread-makers as home baking grows in popularity.
Our buying habits are changing, but retailers need to continue to adapt accordingly to prosper. Overall, the effect on supermarkets seems positive with Morrisons planning to create 5000 jobs this year and Asda looking to take on an additional 7000 staff.
Although times are still hard, there have been some positive side effects from the current climate – we’re eating more healthily, taking advantage of competitive pricing, eating together as a family more, baking from scratch, growing our own vegetables and wasting less. Let’s hope these continue once we emerge from the recession a healthier, wealthier nation.
Sarah Hool
Marketing Manager
sarah.hool@zbdsolutions.com
