A SUMMARY UPDATE OF THE
IRISH GROCERY MARKET TO
21ST MARCH 2010
A Presentation to the National
Consumer Agency
May 2010
1
Headlines
1
The market declined by 5% in value, losing over €460 million over 52 weeks
2
Household grocery spend shrunk by 7.5% in the same period
3
Move away from premium to budget products
4
Huge shift to products priced under €3
5
Cross Border share falling back
2
© Kantar Worldpanel
The grocery market has shrunk by 5% year-on-year,
falling below 2008 value
52 we €000’s
12 we €000’s
€9,047,705 €9,338,228 €8,871,597
€2,140,442 €2,116,024 €1,957,723
52 w/e 23
Mar 08
+3.2%
- 5%
52 w/e 22
Mar 09
52 w/e 21
Mar 10
12 w/e 23
Mar 08
-1.1%
-7.5%
12 w/e 22
Mar 09
12 w/e 21
Mar 10
3
© Kantar Worldpanel
HOW IS THE MARKET PERFORMING ON TRENDED BASIS?
% VALUE CHANGE VS. LAST YEAR, 12 WEEKLY AND 4 WEEKLY TRENDED
4
12-weekly % Change
4-weekly % Change
2.2
2
0
-2
-1.5
-2.4
-4.0
-4
-5.2
-6
-8
-4.0
-4.7
-5.4
-6.1
-5.7
-7.0 -6.9
-7.5
-8.6
-10
12 w/e 22 12 w/e 19 12 w/e 17 12 w/e 14 12 w/e 12 12 w/e 09 12 w/e 06 12 w/e 04 12 w/e 01 12 w/e 29 12 w/e 27 12 w/e 24 12 w/e 21 12 w/e 21
Mar 09
Apr 09
May 09
Jun 09
Jul 09
Aug 09
Sep 09
Oct 09
Nov 09
Nov 09
Dec 09
Jan 10
Feb 10
Mar 10
4
© Kantar Worldpanel
Each household spent €456 less on groceries in the year to
21ST March 2010 versus same period last year
Annual Grocery Spend
Quarterly Grocery Spend
€1,340
€6,074
€5,618
52 we 2010
€449
€1,240
-7.5%
52 we 2009
Monthly Grocery Spend
€418
-7.5%
12 we 2009
12 we 2010
-7%
4 we 2009
4 we 2010
5
© Kantar Worldpanel
Contribution to % Change
Why are households spending less?
0.1
6.3
-6.3%
7.5
+4%
4.0
5.1
-5.1%
Deflation
Inflation
Volume
Volume per HH
per
Household
Store
Choice
Store Choice
Promotion
or Product
Choice
Promotion/ Product
Change
-7.5%
Spend
per
Spend Per HH
Household
6
© Kantar Worldpanel
58.1% of basket spend now on items priced under €3 – an
increase of 5 points on last year
Average grocery basket price bands
Under €1
2009
9.4
2010
11.9
€1-€2
24.6
27.7
€2-€3
€3-€4
19.2
€4-€5
13
18.5
9.1
12.4
€5-€6
5.4
8.1
4.9
€6+
19.4
16.5
5 point shift to items under €3
7
© Kantar Worldpanel
Budget products are the only ones showing sales growth
within total grocery
Share of sales
% Change in sales
60
8.7
8.6
50.4
50
40
24.9
30
20
33.7
10
0
-2.6
-10
-2.1
-5.8
-10.6
24.1
Super
Prem
% Packs
-20
Budget
Median -75%
Standard
Median -25%
Good
Median Price
Premium
Median +25%
Median +75%
8
© Kantar Worldpanel
Volume per Household
Store Choice
12 w/e 21 Feb 10
12 w/e 24 Jan 10
12 w/e 27 Dec 09
12 w/e 29 Nov 09
12 w/e 01 Nov 09
12 w/e 04 Oct 09
12 w/e 06 Sep 09
12 w/e 09 Aug 09
12 w/e 12 Jul 09
12 w/e 14 Jun 09
12 w/e 17 May 09
12 w/e 19 Apr 09
12 w/e 22 Mar 09
12 w/e 22 Feb 09
12 w/e 25 Jan 09
12 w/e 28 Dec 08
12 w/e 30 Nov 08
12 w/e 02 Nov 08
12 w/e 05 Oct 08
12 w/e 07 Sep 08
12 w/e 10 Aug 08
12 w/e 13 Jul 08
12 w/e 15 Jun 08
12 w/e 18 May 08
12 w/e 20 Apr 08
12 w/e 23 Mar 08
Contribution to % Change
Trading down retailer is becoming less important in driving down
household spend
How are shopper coping strategies changing over time?
4
2
0
-2
-4
-6
-8
-10
Promotion or Product Choice
© Kantar Worldpanel
9
12 w/e 21 Mar 10
12 w/e 21 Feb 10
12 w/e 24 Jan 10
12 w/e 27 Dec 09
12 w/e 29 Nov 09
12 w/e 01 Nov 09
12 w/e 04 Oct 09
12 w/e 06 Sep 09
12 w/e 09 Aug 09
15%
12 w/e 12 Jul 09
12 w/e 14 Jun 09
12 w/e 17 May 09
12 w/e 19 Apr 09
12 w/e 22 Mar 09
-5%
12 w/e 22 Feb 09
12 w/e 25 Jan 09
12 w/e 28 Dec 08
12 w/e 30 Nov 08
12 w/e 02 Nov 08
12 w/e 05 Oct 08
12 w/e 07 Sep 08
12 w/e 10 Aug 08
12 w/e 13 Jul 08
12 w/e 15 Jun 08
12 w/e 18 May 08
12 w/e 20 Apr 08
12 w/e 23 Mar 08
So the gap between deflation and household spend is reducing
Inflation / Deflation
10%
% Change in Household Spend
5%
0%
1 point gap
6 point gap
-10%
-15%
© Kantar Worldpanel
10
Why are shoppers staying down South?
1
They stocked up over the Christmas period
Spend per Trip in December €60
Spend per Trip in March €53
11
© Kantar Worldpanel
Why are shoppers staying down South?
2
Exchange rate advantage continued to erode
0.92
0.92
0.92
0.90 0.90
0.90
0.89
0.89
0.88
0.88
0.88
0.86
Jan- Feb- Mar- Apr- May- Jun09
09
09
09
09
09
0.86 0.86
Jul09
Aug- Sep- Oct- Nov- Dec- Jan- Feb09
09
09
09
09
10
10
Source: www.x-rates.com
12
© Kantar Worldpanel
Why are shoppers staying down South?
3
Shopping in the Republic is becoming cheaper still
Cost of
basket of 85
commonly
purchased
branded
goods and
fresh
produce fell
by 7% last
year
13
© Kantar Worldpanel
Why are shoppers staying down South?
4
The Big Freeze
14
© Kantar Worldpanel
Brief Overview of UK
Market
15
© Kantar Worldpanel
Inflation And Household Spend Growth
Trading up not as high as in previous months
10%
9%
8%
% change
7%
6%
5%
4%
3%
2%
1%
Grocery (RST) 12we 21 Mar 2010 (KWP P04)
12 we Household Spend Growth
21 Mar 10
21 Feb 10
24 Jan 10
27 Dec 09
29 Nov 09
01 Nov 09
04 Oct 09
06 Sep 09
09 Aug 09
12 Jul 09
14 Jun 09
17 May 09
19 Apr 09
22 Mar 09
22 Feb 09
25 Jan 09
28 Dec 08
30 Nov 08
02 Nov 08
0%
12 we Inflation
16
© Kantar Worldpanel
While in the UK Standard and Super-Premium offerings are
showing strongest growth as shoppers are beginning to
trade back up into brands
% Change in sales
Share of sales
8.8
7.5
8
7
6.3
12
6
5
34
4
3
2.5
2.0
2
22
1
0
-1
-0.6
-0.7
24
-2
All
Budget Standard
Purchasing
Good
Premium
Super
Premium
% Packs
Median -75% Median -25% Median Price Median +25% Median +75%
17
© Kantar Worldpanel
Grocery Coping Strategies
Consumers using promotions to trade up in volume and quality
contribution to change %pts
0.2
- 1.6
1.2
0.5
2.2
1.8
Inflation
HH Volume
Change
Store Choice
Promotion
Choice
Product Choice
HH Spend
Change
Grocery (RST) 12we 21 Mar 2010 (KWP P04)
18
© Kantar Worldpanel
Volume change
Store Choice
Promotions
21 Mar 10
21 Feb 10
24 Jan 10
27 Dec 09
29 Nov 09
01 Nov 09
04 Oct 09
06 Sep 09
09 Aug 09
12 Jul 09
14 Jun 09
17 May 09
19 Apr 09
22 Mar 09
22 Feb 09
25 Jan 09
28 Dec 08
30 Nov 08
02 Nov 08
05 Oct 08
07 Sep 08
10 Aug 08
13 Jul 08
15 Jun 08
18 May 08
20 Apr 08
contribution to change %pts
Grocery Coping Strategies
Trading up increasingly driven by volume and less about quality
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
-6%
Product Choice
Grocery (RST) 12we 21 Mar 2010 (KWP P04)
© Kantar Worldpanel
19
Promotional Mechanics Contribution To Growth
% extra free and price cuts drive growth, as full price sales continue to fall
Contribution to growth %pts
10%
8%
6%
4%
2%
0%
-2%
Full price
Price reduction
Multibuy
Y for £X
21 Mar 10
21 Feb 10
24 Jan 10
27 Dec 09
29 Nov 09
01 Nov 09
04 Oct 09
06 Sep 09
09 Aug 09
12 Jul 09
14 Jun 09
17 May 09
19 Apr 09
22 Mar 09
-4%
Market growth
Grocery (RST) 12we 21 Mar 2010 (KWP P04)
20
© Kantar Worldpanel