Price and Value Study – Second Wave
May 2010
Report Structure
1
2
3
4
• Introduction & Objectives
Pages 2- 5
• Market Understanding
Pages 6 - 9
• Shopper Segmentation
Pages 10 - 21
• Category Dynamics
Pages 22 - 29
Context and Background

With the current economic climate, price is becoming an increasingly significant factor
in all sectors including food and drink.

Bord Bia’s “Feeling the Pinch” study in December 2009 confirmed that the consumer
behaviour throughout 2009 is likely to continue throughout 2010 with With 75% of
Irish consumers believing they spending will reduce a little or a lot. It also found 8 in
10 consumers agreed that they pay more attention to grocery prices in that last 6
months than previously. In this study 8 in 10 claim to be shopping around for value
more than before.
 The study also documented that the large majority will continue to be more likely to
‘choose special offers and deals’.

In light of these findings, Bord Bia commissioned this study in order to assist clients
with pricing strategies to help them compete more effectively.

Bord Bia want therefore to go beyond capturing stated interests and intents, to use a
statistically robust and reliable modelling technique.
A conjoint choice modelling study was employed to provide a robust price strategy
planning tool for its clients…
Objectives of the Study
Overall Objectives
 Analyse the effects price variants have on different types of categories of products and brands
within categories (Cheese, Water, Frozen Meat, Packaged Bread, Chocolates, Tea, Fresh Coffee,
Frozen Pizza, Spreads and Yoghurt)
 Explore price elasticity in relation to the use of promotions and its influence on brand choice
 Evaluate the influence of different types of sales promotions and price discounts on the brand
choice process

Specific Objectives





How will the market respond to a change in shelf price?
Competitive set- which brands compete most on the basis of price?
Cross price elasticity – variances in brand price and how they alter the demand of rival brands
What are the most appropriate promotional mechanics for food and drink categories?
What consumer behaviour is stimulated when a brand is on promotion – increased consumption/
stockpiling/ brand switching?
 Consumers price assessment – are there established reference prices for categories?
 Is there a width of price range for each brand, given its position in the category?
Methodology

April 2010
August 2009

We surveyed a total of n=1,811 main household grocery shoppers, online, in the
Republic of Ireland and the sample was representative in terms of sex, age, social class
and region
Following a generic initial section of the survey, respondents were directed to category
specific questions on the basis of their frequency of purchase.
Bread
n= 605
Weekly + Bread
purchasers
Cheddar
Cheese
Chocolates
Frozen meat
Tea
Water
n= 561
n= 602
n= 530
n= 573
n= 603
Quarterly +
Chocolates
purchasers
Monthly + Frozen
meat purchasers
Monthly + Tea
purchasers
Weekly + water
purchasers
Monthly + Cheese
purchasers
Fresh Coffee
Frozen Pizza
Butter/ Spreads
Potted Yoghurts
n= 812
n= 724
n= 821
n= 493
6 Weekly + Fresh Coffee
purchasers
Monthly + Cheese purchasers
2 weekly + Spreads purchasers
2 weekly + Yoghurt
purchasers


The Interview length was between 15 and 20 minutes
The fieldwork was conducted between 1st and 10th April 2010
MARKET UNDERSTANDING
Attitude To Shopping – Value
(Base: All Main Grocery Shoppers, n= 1,811)
Value Orientated Statements
April 2010
August 2009
%
Any
Agree
%
Strongly
Agree
%
Any
Agree
89%
58%
89%
I tend to shop around for
value more than I used to
for groceries
85%
58%
87%
I generally shop around
for best deals when it comes
to grocery shopping
90%
53%
89%
I often choose which store
to do my grocery shop in on
the basis of value for money
78%
49%
84%
Value is the main reason I
tend to Shop where I shop
77%
46%
82%
Strongly Somewhat Somewhat
Disagree Disagree Agree
I regularly purchase brands on
promotion as part of my
grocery shop
(Q2)
Strongly
Agree
Value-oriented statements continue to attract significant levels of endorsement in the current
climate. However firmer endorsement of Value appears to have waned slightly given the
reduction in % agreeing strongly since August 2009, although there is no significant difference
in ‘Any Agree’. Overall Value remains key to the grocery shopper psyche.
Attitudes To Shopping – Quality
(Base: All Main Grocery Shoppers, n= 1,811)
Quality Orientated Statements
April 2010
August 2009
%
Any
Agree
%
Strongly
Agree
%
Any
Agree
79%
38%
82%
The quality of the items I
buy is more important to
me than the price I pay
for them
67%
24%
74%
I tend to choose products that
are healthy for me and my
family regardless of cost
62%
19%
69%
I prefer to purchase brands
I know rather than
looking for best price
60%
18%
60%
I tend to choose the store
that is closest to me
for my grocery shop
53%
18%
50%
Strongly Somewhat Somewhat
Agree
Having a wide range or Disagree Disagree
selection of items is the main
reason I choose store for
grocery shopping
Strongly
Agree
Little to differentiate endorsement of Quality statements from August 2009 with the exception
of a weaker endorsement of quality over price overall and for family. Overall, the quality
dimension to grocery shopping attracts lower levels of endorsement than Value.
(Q2)
Attitudes To Shopping - Budget
(Base: All Main Grocery Shoppers, n= 1,811)
Budgeting Statements
April 2010
Strongly Somewhat Somewhat
Disagree Disagree
Agree
I often spend more than I
had planned to when
grocery shopping
I have a set budget for my
grocery shop and stick to
it
August 2009
Strongly
Agree
%
Any
Agree
%
Strongly
Agree
%
Any
Agree
68%
28%
71%
45%
17%
52%
… interesting to note that almost 7 in 10 still spend more than they planned to when
shopping, despite the prevalence of Value consciousness, strict adherence to a budget
still is not the norm among grocery shoppers.
SHOPPER SEGMENTATION
Attitudinal Segmentation Process
Factor 1=Value Based
Factor Analysis
Factor 2=Brand Based
-Prefer to purchase brands I know
- Tend to choose the store that is closest
to me
-Quality of items I purchase is more
important than the price I pay
-I tend to choose products that are
healthy for me and my family regardless
of price
-Often spend more than I had planned to
when grocery shopping
1. Indulgers
Segmentation
2. Compromisers
Cluster
Analysis
Attitudinal
Statements
-Shop around for best deals
- Regularly purchase brands on promotion
-Shop for value more than I used to
- Value is main reason where I shop
- Often choose store to shop on basis of
value for money
-I have a set budget for my grocery shop
and stick to it
3. Strugglers
4. Value Hunters
The defined factors (value & brand) were fed into a cluster analysis process where 4 distinct
attitudinal segments emerged. This is a repeatable cluster model based on benchmarked
scores to quality for different segments, thus allowing the ability to assess over time.
Penetration Of Attitudinal Segments
(Base: All Main Grocery Shoppers, n= 1,811)
Compromisers
27%
Strugglers
26%
(582,838)
((28%))
(561,252)
((27%))
Indulgers
23%
Value hunters
(496,492)
((20%))
(518,079)
((25%))
24%
Quality
Oriented
Value
Oriented
( ) Population Number from CSO Estimates 2009
(( )) Segment % from August 2009
Consumers defined by their relative emphasis on quality vs value …
Very little movement over time, however a small jump in Indulgers at the
expense of a 1% drop in each of the other more at risk segments.
Most/Least Likely To Say By Segment
Indulgers
• Most likely to say:
– I prefer to purchase brands I know rather
than looking for best value.
– The quality of items I purchase in more
important than the price I pay.
– I tend to choose product that are healthy
for me regardless of cost.
• Least likely to say
– Value is the main reason I choose to shop
where I shop.
– I often choose which store to conduct my
grocery shop on the basis of value for
money.
– I generally shop around for the best deals
when it comes to grocery shopping.
– I have a set budget for my grocery shop and
stick to it
27%
Compromisers
• Most likely to say:
– I prefer to purchase brands I know rather
than looking for best price.
– I tend to shop around for value more than I
used to for groceries.
– The quality of items I purchase in more
important than the price I pay.
– I regularly purchase brands on promotion as
part of my grocery shop.
• Least likely to say
– Value is the main reason I choose to shop
where I shop.
– I have a set budget for my grocery shop and
stick to it
Most/Least Likely To Say By Segment
Strugglers
24%
Value Hunters
• Most likely to say:
– I tend to shop around for value more than I
used to for groceries.
– I generally shop around for best deals when it
comes to grocery shopping.
– I regularly purchase brands on promotion as
part of my grocery shop.
• Most likely to say:
– Value is the main reason I choose to shop
where I shop.
– I generally shop around for the best deals
when it comes to my grocery shopping.
– I often choose which store to conduct my
grocery shop on the basis of value for
money.
• Least likely to say
– I tend to purchase brands I know rather than
looking for best price.
– I tend to choose the store that is closest to
me for my grocery shop.
– I often spend more than I had planned to
when grocery shopping
• Least likely to say
– The quality of items I purchase is more
important to me than the price I pay for
them.
– I tend to choose the store that is closest to
me for my grocery shop.
– I prefer to purchase brands I know rather
than looking for the best price.
Quality Orientated Statements By Segment
(Base: All Main Grocery Shoppers, n= 1,811)
Index vs Total
Brand Orientated Statements
Based On
Strongly Agree
Value
Indulgers Compromisers Strugglers Hunters
Having a wide range or selection of items is the
main reason I choose store for grocery shopping
137
103
97
67
The quality of the items I have is more
important to me than the price I pay for them
247
107
40
20
I tend to choose products that are healthy
for me and my family regardless of cost
223
108
69
15
I prefer to purchase brand I know rather than
looking for best price
254
100
46
8
I tend to choose the store that is closer to me
for my grocery shop
200
119
69
25
I often spend more than I had
planned to when grocery shopping
110
100
100
86
I have a set budget for my grocery
shop and stick to it
58
75
117
183
Budget Orientated Statements
Indulgers are evidently less price-conscious with a significantly greater emphasis on
quality over value. Compromisers tend to act in a similar way, but are more at risk of
becoming more Value orientated.
Value Orientated Statements By Segment
(Base: All Main Grocery Shoppers, n= 1,810)
Index vs. Total (Total = 100)
Value Orientated Statements
Based On
Strongly Agree
Value
Indulgers Compromisers Strugglers Hunters
I regularly purchase brand on
promotion as part of my
grocery shop
60
91
110
113
I tend to shop around for
value more than I used to
for groceries
32
85
119
146
I generally shop around
for best deals when it comes
to grocery shopping
34
74
125
157
I often choose which store to do my
grocery shop in on the basis of value
for money
22
66
120
172
Value is the main reason I tend to
Shop where I shop
26
72
113
178
As the name suggests, Value Hunters place singular emphasis on the quest for value – a
stark contrast with Indulgers. Although note emphasis around value for the Struggler
segment also... An important target for Irish producers.
Segmentation Profile - I
(Base: All Main Grocery Shoppers, n= 1,811)
Index vs Total
Total Sample
Indulgers Compromisers Strugglers Value Hunters
Male
110
105
95
85
Female
93
97
103
110
18-24
122
100
78
100
25-34
89
109
91
106
35-44
81
96
115
104
45+
120
90
100
90
Yes
83
93
109
111
No
115
106
93
91
Gender
Age
Dep Kids
Value seeking and family commitments go hand in hand!
Pen Portrait - Indulger
•
John is 55 years old and lives in Clontarf. He is married to Elaine and they have
two children, Brian and Emma. Brian is 26 and has just started working for a Bank
in the city centre. Emma is 24 and is currently doing her masters in UCD. Both
Brian and Emma do not live at home, but are fond of coming home every couple
of weekends for a well cooked meal by Elaine.
•
John is a senior manager in an Insurance company in the city centre and drives his
Saab 93 to work every morning. He enjoys playing golf with his friends on
Saturdays, and usually eats out with his wife and friends on a Saturday night. He
plans to retire in 5 years, and has invested his money wisely despite the recent
economic problems.
•
John generally does the main grocery shopping with Elaine in Superquinn on a
Sunday afternoon, and often gets requests from Elaine to pick up certain things
from Marks & Spenser in the city during the week. John also finds himself forever
having to nip out to the local Spar in the evening time to pick up certain treats for
Elaine, and his local off license for a bottle of wine.
•
John always purchases the brands he knows and likes. He does not have time for
looking for the best deal, especially as he is just generally shopping for himself and
Elaine. He has however become more aware of healthier options available to him,
but would only ever look for these alternatives within brands that he knows and
trusts.
Pen Portrait - Compromiser
•
Sean is 30 years old and is a primary school teacher in Galway. He recently bought
a new apartment, where he lives and rent the spare bedroom to a friend of his.
He is currently single, but has been seeing Jane on and off for a while.
•
Sean likes socialising with his friends at the weekend, and plays football on a
Wednesday night with the lads to keep fit and enjoy the craic. He does however
notice the few Euro less in his account every month since the introduction of the
pension levy, but still has enough money to pay his mortgage and go out at least
one night every weekend.
•
Sean has always generally shopped in Dunnes Stores, but he has noticed that the
new Tesco in town does some great offers on meat and beer. He also tends to
make about one trip a month to Aldi, where he tends to purchase some cheese
that he likes and washing powder in bulk. He has recently also discovered a white
wine that he likes which is only €4.99 here so he buys 4 to have them.
•
Sean find himself often swayed by promotions on brands that he likes, especially
for beer, biscuits and bottled water. He generally does not use all the food he
buys on promotion and has to throw it out when it passed the best before date.
He will not however shop around on his favourite meat, bread and sauces.
Pen Portrait - Struggler
•
Marie is 35 years old and is a housewife from Monaghan. She is married to Barry,
who works in a local factory. Barry recently had to take a 20% cut in salary, but
avoided being made redundant, as a number of his colleagues were let go.
•
Marie and Barry have 3 young children, aged 6, 3 and 2. Marie has contemplated
looking for some part time work to help out, but there is very little out there at
the moment and the cost of child care means there is little point in pursuing this
at the moment. She has certainly noticed how much more difficult it is to make
ends meet, and had to cancel their summer holiday earlier this year.
•
Marie shops mainly in Tesco nowadays, given the money she can save with the
new ‘change for good’ campaign. She feels she saves almost €50 on her weekly
shop now compared to what she used to pay in Superquinn. She visits Lidl on a
regular basis as she finds it great to stock up on a number of items for the kids, as
well as washing powder and some toiletries. She finds it hard now to justify
shopping in Superquinn except for special occasions.
•
Marie is fearful for the future of her family, and doesn’t know what would happen
if Barry lost his job. She sticks very closely to her shopping list and would rarely go
over budget unless there was a promotion on something like meat, tea or
nappies, something that will be used up in the future.
Pen Portrait – Value Hunter
•
Siobhán is 42 years old and is from Limerick. She is married to Jim who is a self
employed joiner but is struggling to get consistent work at the moment, its mainly
cash in hand. They have 4 children, aged 16, 11, 8 and 4.
•
Siobhán always seems to struggle paying the mortgage and bills, but this is
especially the case at the moment as Jim tries to look for something more
consistent. She is fearful for the future given the amount of negative media out
there about the future of the construction industry, and she had to fork out for
new school books for her children recently.
•
She has started going back to Tesco since she heard from friends about the
savings they made, but she shops in other places also. She tends to do 1 grocery
shop per week, generally on a Saturday morning when Jim looks after the kids.
She takes the family car and goes to Tesco, then Lidl to stock up on the household
goods she needs. She also goes to Dunnes Stores when they advertise special
offers that are relevant to her.
•
Siobhán is long since converted to purchasing mainly private label groceries and
has always felt the Tesco and Dunnes Stores own label goods are the same as any
others. She is very rigid at sticking to her shopping budget and always knows
exactly where she will get the best value for the groceries she needs.
CATEGORY DYNAMICS
Purchase Frequency For Main Food Categories
(Base: All Main Grocery Shoppers, August 2009 (n=1810), May 2010 (n= 1,811)
August 2009
May 2010
Frozen
Cheddar Frozen Tea Boxes of
Beef
Fresh Frozen
Spreads
Bread Water Cheese Chicken Bags Chocolates Burgers Coffee Pizza Yoghurts Butter
More than once a week
61%
17%
10%
8%
3%
2%
2%
2%
6%
21%
10%
Once a week
29%
24%
47%
22%
18%
3%
13%
9%
26%
48%
40%
Once every 2 weeks
5%
13%
24%
16%
24%
4%
12%
12%
18%
14%
25%
Once a month
2%
11%
9%
14%
28%
11%
16%
20%
17%
6%
16%
Every 6 weeks
n/a
n/a
n/a
n/a
n/a
n/a
n/a
5%
5%
2%
4%
Every 2-3 months
1%
8%
4%
12%
16%
22%
13%
12%
9%
3%
3%
Every 6 months
0%
6%
2%
6%
5%
23%
9%
8%
6%
1%
1%
Once a year
0%
2%
0%
4%
2%
21%
5%
5%
2%
0%
0%
Less than once a year
0%
3%
0%
4%
1%
9%
6%
6%
3%
1%
0%
Never
1%
16%
3%
14%
3%
5%
24%
21%
8%
3%
1%
AVERAGE PER MONTH
6.2
2.7
3.3
2.1
1.8
0.6
1.2
1.0
2.1
4.0
3.1
Unsurprisingly Bread, Yoghurt, Spreads and Cheese are the most commonly
purchased items, making it into the basket almost once a week or more.
Average Times Per Month Main Categories Purchased In Multiples
(Base: All Main Grocery Shoppers, August 2009 (n=1810), May 2010 (n= 1,811)
Index vs Total
Total Sample
Average Times Purchased
Per Month
Indulgers Compromisers
Strugglers
Value Hunters
Bread
94
98
103
104
Yoghurt
95
107
101
96
Cheddar Cheese
88
101
104
104
Spreads/Butter
94
102
101
104
Water
100
106
96
98
Frozen Pizza
85
110
100
102
Frozen Chicken
94
96
96
114
Tea Bags
97
105
100
97
Frozen Beef Burgers
86
100
98
113
Fresh Coffee
110
120
89
80
Box Of Chocolates
127
121
88
68
The table above depicts the difference (in indexed form) in terms of the frequency of
purchase of the various categories across the Value segments.
Category Purchase Tendency Towards Private Label
and Branded Items
(Base: All Main Grocery Shoppers, August 2009 (n=1810), May 2010 (n= 1,811)
On a 10 point scale, where do you belong in terms of your purchasing of … for your household?
Tend to buy
Private Label
(1-3)
Tend to buy
Branded
(4-7)
(8-10)
Tea (n=530)
Yoghurt (n=473)
Boxed Chocolates (n=561)
Spreads/Butter (n=875)
Bread (n=605)
Frozen Pizza (n=724)
Fresh Coffee (n=821)
Cheese (n=603)
Frozen Meat (n=602)
Water (n=573)
Clear to see that Tea, Yoghurt, Chocolates and Spreads are more branded orientated
categories for purchase, while the major player in water is PL.
Branded Purchase For Categories By Segment
(Base: All Main Grocery Shoppers, August 2009 (n=1810), May 2010 (n= 1,811)
Diff vs Total Indexed
Branded Incidence Total
(Base on Score 8-10 from Q1a)
Indulgers Compromisers
Strugglers
Value Hunters
Tea
114
106
79
86
Yoghurt
119
106
97
68
Boxed Chocolates
117
103
98
97
Spreads/Butter
121
105
91
89
Bread
113
120
88
69
Frozen Pizza
122
104
94
86
Fresh Coffee
135
98
94
73
Cheese
148
114
76
67
Frozen Meat
121
126
82
84
Water
142
130
85
55
Unsurprisingly, branded incidence is more strongly endorsed among the
Indulger group, however branded incidence is strong across all segments for
Tea, Chocolates, Spreads, Frozen Pizza and Frozen Meat.
Private Label Purchase For Categories By Segment
(Base: All Main Grocery Shoppers, August 2009 (n=1810), May 2010 (n= 1,811)
Diff vs Total Indexed
Private Label
Incidence Total
(Base on Score 1-3 from Q3a)
Indulgers Compromisers
Strugglers
Value Hunters
Water
66
71
111
149
Cheese
39
65
103
157
Breads
70
70
85
175
Spreads/Butter
65
70
120
140
Fresh Coffee
61
89
106
161
Frozen Pizza
81
81
113
138
Frozen Meat
94
63
106
138
Yoghurt
60
67
87
207
Boxed Chocolate
81
78
111
122
Tea
56
78
89
167
High purchase frequency categories like Water, Bread, Spreads and Frozen Pizza have
relatively high levels of Indulger and compromiser purchase incidence relative to the
other categories.
Category Purchase Routine Vs Experimentation
(Base: All Main Grocery Shoppers, August 2009 (n=1810), May 2010 (n= 1,811)
On a 10 point scale, where do you belong in terms of your purchasing of … for your household?
Tend to buy same…
(1-3)
Tend to Experiment…
(4-7)
(8-10)
Spreads/Butter (n=875)
Tea (n=530)
Water (n=573)
Yoghurt (n=473)
Bread (n=605)
Frozen Pizza (n=724)
Frozen Meat (n=602)
Fresh Coffee (n=821)
Cheese (n=603)
Boxed Chocolates (n=561)
Greatest loyalty occurs for more commonly purchased categories… e.g. Spreads, Tea,
Water and Yoghurt. Cheese, Fresh Coffee and Frozen Pizza tend to experience more
experimentation in relative terms.
Price and Value Study – Second Wave
May 2010