Retail market: supermarkets
Briefing notes and sales support
for newspaper media sales teams
What’s in this deck?
This deck is split into two sections:
Section 1
An overview of the Australian retail market
The 2015 Media i Industry Survey asked agencies “what
are the most important factors when dealing with media
owners”. The most common factor (52% agreed ) was
“understanding of your client’s business and category”.
Section 1 of this deck won’t make you an instant expert,
but it will help get you up to speed on the most
important facts about the category.
Section 2
Focus on supermarkets
This report will focus on supermarkets. Additional reports
will discuss other key retail sectors.
Section 3
Support slides for sales presentations
Every great sales presentation is tailored for each client,
but there some points fit most clients within a category.
Section 3 contains research about how consumers make
supermarket purchases, and the contribution newspaper
media makes in the decision process.
Section 1
Retail market: an overview
Retail: core of the consumer economy
•
•
Turnover: $23.7bn month
Over 135,000 retail businesses employing 1.2m people
– 1 in every 15 businesses is a retailer
– 1 out of every 10 employees work in retail
Sources: Australian Bureau of Statistics:
6291.0.55.003 - Labour Force, Australia, Detailed, Quarterly, May 2015
81650 Counts of Australian Businesses, including Entries and Exits, Jun 2010 to Jun 2014
Solid retail growth prospects for 2015
Australian Retail Sales YOY
5.5
•
•
5.5
5.7
5.2
5.7
5.0
4.5
Retail growth was strong for most
of 2014, slowed for the Christmas/
post-Christmas sales period, and
has recovered since.
Forecasts for the remainder of
2015 are very positive.
4.0
3.3
4.3
4.4
4.4
4.4
3.1
Source: www.trading economics.com/australia/retail-sales-annual/forecast; ABS
Retail: key sectors
Retail
$23.7 billion/month
Food
$9.7bn
Food dominates retail
(supermarket/grocery,
liquor, specialty food):
41% of all retail spend
Household goods
Cafes, restaurants
& takeaway food
$4.1bn
$3.3bn
Household goods (furniture,
housewares, electrical/ electronic
goods, hardware): 17%
Cafes, restaurants & takeaway: 14%
Clothing, footwear
& accessories
$1.8bn
Department stores
$1.5bn
Other retail
$3.3bn
Clothing, footwear, accessories: 8%
Department stores : 6%
Source: Australian Bureau of Statistics 8501.0 - Retail Trade, Australia, May 2015
Retailers: big spenders on main media
•
•
•
Retailers made up 4 of the top 5 advertisers
in 2014, and 11 of the top 25.
Retail accounts for 47% of total adspend for
the top 25 advertisers.
Across all their brands
–
–
–
–
Wesfarmers Limited spent $248m
Woolworths Group $203m
Harvey Norman Holdings $126m
Suncorp Metway $86m
Brand
Total Adex
Rank
Woolworths
$102m
2nd
Coles
$101m
3rd
Harvey Norman
$87m
4th
McDonald’s
$83m
5th
Bunnings
$50m
11th
Target
$46m
13th
Myer
$45m
14th
Hungry Jack’s
$42m
17th
Dan Murphy’s
$41m
21st
KFC
$38m
24th
Domayne
$37m
25th
Source: Ebiquity, 2014 Advertisers Report
Retail: big spenders on newspapers
•
Retailers make up almost
half of the top 25
newspaper advertisers.
Brand
Newspaper
Adex
Rank
Dan Murphy’s
$40m
1st
Coles Group
$32m
Harvey Norman
Brand
Newspaper
Adex
Rank
Domayne
$22m
10th
3rd
Bunnings
$19m
11th
$32m
4th
David Jones
$17m
12th
Woolworths
$29m
6th
Liquorland
$13m
17th
Myer
$29m
7th
IGA
$10m
22nd
Target
$26m
8th
BWS
$9.3m
25th
Source: Ebiquity, 2014 Advertisers Report
Section 2
Supermarkets
Supermarkets: #1 retail sector
•
Turnover $8.1bn each month
– 84% of food retail spend
– 34% of total retail spend
•
The average Grocery Buyer spends
$144 p.w. at the supermarket
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending June 2015.
Where do shoppers shop most often?
Supermarket: main usage (%)
•
•
•
Woolworths and Coles remain the
dominant supermarkets, with Coles
closing the gap on Woolworths.
Aldi is building its base, and has
overtaken IGA as most shoppers’
main supermarket.
IGA and smaller stores are falling
behind in the main-usage stakes.
40.0 40.3 39.0
30.2 30.8
Woolworths
Coles
Jun-13
32.4
Jun-14
8.5 8.9 10.1
9.5 9.3 8.5
Aldi
IGA
Jun-15
11.7 10.7
10.0
Other
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending June 2013, 2014, and 2015.
Buyers have repertoires of brands
•
•
•
Most shoppers buy from a range of
supermarkets.
The average shopper buys from 3.8
different supermarket brands/month.
Each month about
– 3 in 4 shop at Woolworths
– 2 in 3 shop at Coles
– 1 in 3 shop at Aldi and IGA
•
Only 3% of shoppers buy groceries
online each month
72.2
Supermarket: any vs. main usage (%)
67.3
33.2
36.4
Any
36.4
30.0
8.5
9.3
8.0
2.7
4.8
1.8
5.1
0.7
Main
7.8
2.9
0.7
2.2
0.7
0.5
1.4
0.5
3.7
0.4
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending June 2015.
Main Grocery Buyers: who are they?
•
Primarily (but not exclusively) female
• Female
• Male
•
73%
27%
40%
30%
Main Grocery Buyer
Slightly older than average
• Main Grocery Buyer
• Population 14+
Age profile comparison
MGB v Pop 14+
51
44
20%
Population
10%
0%
14-29
30-44
45-64
65+
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending June 2015.
Section 3
Support slides for sales presentations
About these slides
The following slides provide general
supporting arguments to assist sales
teams when building client-specific
presentations.
The purpose is to open discussion, to
demonstrate a basic understanding of
factors that drive supermarket sales, and
to show how newspaper media can help
to influence the sales process.
These slides are intended to be used in
a presentation after recapping the
brief, and before presenting analysis
and recommendations tailored to the
specific client.
Needless to say, they can and be should
be adapted to suit your particular
presentation requirements.
Recap client/agency brief
Supermarket industry
support slides
Client specific
analysis
Recommendations
The good news first
Expectations for continued growth in supermarket retailing for 2015-16:
2.5% annual growth forecast.
Source: IBIS World: Supermarkets and Grocery Stores Market Research Report | ANZSIC G4111 | Jul 2015
Unprecedented competition in supermarkets
Woolworths and Coles still
dominate, but discounters
are making gains.
Good news for consumers.
But tough for retailers.
“The competitive landscape
is changing…
While the sector has been dominated
by the big two [Woolworths and
Coles], Aldi and Costco are creeping in.
Metcash has been hit the hardest, but
Coles and Woolworths are feeling it.”
Hugh Dive, Head of Equity
Philo Capital Advisers
Source: http://www.afr.com/personal-finance/shares/the-supermarket-duopoly-is-starting-to-fray-20141115-11n8m4
How loyal are shoppers?
65%
of grocery buyers claim to be loyal
to their preferred supermarket.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending June 2015.
In practice, brand loyalty is weak
•
•
Supermarket brand repertoire:
number of brands shopped L4W
Over a four weeks the average shopper
buys from 3.8 supermarket brands.
Larger brands have higher loyalty –
but not much higher.
–
–
–
–
Woolworths customers:
Coles customers:
IGA:
Aldi:
2.9 brands
3.0
3.3
3.4
3.8
2.9
3.0
3.3
3.4
3.9
3.7
4.0
3.3
Shop at both
8.8m
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending June 2015.
Your customers are their customers. And vice versa.
•
Most Woolworths customers are also
Coles customers (and vice versa).
•
Large brands aren’t large brands
because they have more loyal
shoppers. They’re large brands
because they have more shoppers.
Woolworths
shoppers
12.5m
Coles
shoppers
11.7m
Shop at both
8.8m
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending June 2015.
High churn customers require constant wooing.
Newspapers excel at reaching
readers in the morning.
Television excels at reaching
readers in the evening.
70%
95%
of readers look into newspapers
between 6am and midday.
of viewers watch TV between
6pm and midnight.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending June 2015.
Which media do grocery buyers turn to?
Main media most useful when buying groceries and beverages
18%
Word-of-mouth is effective with
Grocery Buyers (36%), and
catalogues are popular (31%).
17%
13%
11%
7%
5%
4%
4%
3%
1%
But in main media TV and
newspapers are the most
important media used when
making buying decisions.
Source: The Nielsen Automotive Report 2012
Newspaper media excels at reaching grocery buyers
6.9 million
Main Grocery Buyers
In Australia.
5.2 million
read newspaper media
each month.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending May 2015.
In print and digital
The combined reach of print
and digital newspaper media:
83%
60%
93%
of grocery buyers.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending May 2015.
TV and newspapers complement each other
TV builds awareness and brand
linkage, priming viewers.
Newspapers reinforce and
remind to prompt retail action.
Newspaper ads provide high tactical flexibility
Conventional product and price ads…
…and to promote competitions,
promotions, and special offers
Client specific analysis & recommendations
This is the point to bridge to a client specific discussion.
Each presentation will need to be individually tailored to suit the client and their
objectives, but the logical flow from here is to move on to
• Analyses that address the client’s specific situation, challenges and opportunities.
• Solutions using your inventory, giving clear reasons why they are appropriate to the
client’s specific needs, and suggestions on how they can be used most effectively.
About The Author
Brian Rock, Research & Insights Manager at The Newspaper Works, is a media research
professional with more than 30 years experience in the advertising, marketing and media industries.
Prior to joining The Newspaper Works he spent 11 years at Network Ten as Strategic Insights Manager, and three years as Research Director at
Mitchell Media Partners. He has also held account management positions at several leading advertising agencies, including George Patterson
Bates and Saatchi & Saatchi, as well as six years in academia, lecturing in advertising and marketing at Melbourne's RMIT University.
For more information on this deck, please email brianrock@thenewspaperworks.com.au