Every possible media outlet has run some kind of piece recently about how the big supermarkets are dinosaurs and, basically, deserve every bit of ill fortune they might experience.
But I’ve yet to read a piece which compares the speed at which shopping habits are changing (i.e. very quickly) with how much time it takes a major grocer to reconfigure their property portfolio (the answer is years – have you tried to get planning permission for anything recently?)
Put simply, Tesco, Asda, Sainsbury’s and Morrisons can’t react fast enough to changing shopping habits because the size and positioning of their current stores commits them to a certain business model.
So how ARE people shopping now? Well according to all the research, overlaid with the hundred-odd grocery and FMCG focus groups I’ve moderated or viewed over the last five or six years (and in very simple terms!) it has been a gradual shift. As the recession originally hit, the weekly shop stopped being loyal to one store and became more about who had the best deals on that week, with shoppers prepared to drive out of the way to save a few pounds on a BOGOF on a Sunday joint. Then, they realised that all the store were doing deals so visited a couple of different ones each week to cream off the best buys.
When the recession really started to bite, many shoppers started moving to doing a big monthly payday shop at their favourite supermarket with top-ups once or twice weekly in between, at whichever store was most convenient or looked like best value. And with the advent of widely available Home Delivery that very big shop could suddenly be delivered to your door.
As with many things, shopping habits went towards two extremes, so as well as the Big Monthly Shop we saw the rise of the Nearly Every Day Shop. Shoppers reasoned that if they bought only what they needed for that day there would be less wasted food (but since the grocers are so good at instore Shopper Marketing, for all but the most strong willed any money saved went on impulse buys anyway). I was gobsmacked last year when I discovered by accident that the average ‘basket spend’ in an extra-large store of a particular Well-Known-Grocer was just £17. You can see why the grocers started rolling out small convenience stores faster than the breweries could shut the pubs they were taking over (massively ironic, since the pubs were shutting due to drinking relocating from the pub to home, thanks to cheap supermarket booze deals…).
At the same time the discounters arrived in force. They wooed shoppers with a triple threat of price (headline deals, value own-brands), convenience (central locations with easy parking and a quicker shop) and even quality (lobster! champagne! taste-test-award-winners!– check out Aldi’s Christmas range).
So we got used to shopping at the supermarket and a discounter. Or even just at a discounter. The supermarkets meanwhile decided the solution was a price war, which merely served to convince shoppers that they’d been ripped off all along by the supermarkets and that none of the big 4 were any better value than the others.
Let me get this straight, Sainsbury’s – you’re doing deals and low everyday prices too? Hold the front page!
We now have four very big organisations with an increasingly disloyal, confused and suspicious customer base, aggressively growing competition from the discount sector and a property estate no-longer fit for purpose but unable to be changed at any speed. Good luck with that, BigFour.