Basket case: How consumers’ food shopping experience is changing

The traditional once-a-week ‘big shop’, long associated with the Irish consumer, appears to be changing as are the products and foods we buy, meaning stores are scrambling to cater for our altered tastes and shopping desires, writes Niamh Hennessy.

Traditionally keeping the fridge full and the cupboards stocked involved on big shopping trip to the supermarket every week.

The days of the ‘big shop’ however seems to be over for many shoppers. Perhaps spurred on by tighter times consumers are looking for value more than ever before.

People are shopping more frequently and buying more own-brand goods. As well as that the surge in healthy eating means that market is booming, with sales of blueberries, water and fish growing hugely. 

Grocery shoppers now seem to be shopping around more than ever. The digital age is not to be ignored either with big Supermarkets like SuperValu and Tesco reporting big increases in people doing their shopping on-line.

Consumers are shopping for groceries more frequently but spending less per store visit, according to AIB’s Retail expert, David Ward.

“There is less brand loyalty, a demand for value for money and move towards private label from branded product,” he said.

“Recent years has seen the rise of ‘Health and Wellness’ and fresh products, as consumers demand high quality fresh produce. 

"Private label products have grown significantly as consumers become increasingly comfortable with the quality of the product and the Multiples continue to grow the number and quality of own brand products,” added Mr Ward.

In addition to this loyalty schemes are proving very popular with shoppers with recent research revealing the average Irish adult owns four loyalty cards.

“The larger supermarkets and discounters have benefited from these loyalty programs however it has had a significant effect on smaller convenience retailers,” said Mr Ward.

In the future, Mr Ward said grocery shopping will need to evolve to become a “destination experience” rather than a functional experience.

“Large grocery retailers are likely to invest in their shopping infrastructure to provide in store experiences such as coffee, dining, crèche,” he said.

According to Lidl they have seen Irish shopping habits change “quite a lot” over five years. 

“More and more people are choosing to do their full shop in Lidl and our average spend has risen considerably. There has been a notable shift to embracing more private label brands,” said a Lidl spokeswoman.

Lidl, which has 1.5 million weekly customers in Ireland, said fresh foods dominate its most popular categories.

“Our range expansion has centred around increased demand from young families so we have, for example, brought in more nappies, baby food and products such as formula milk,” said the Lidl spokesperson.

There’s no doubt that Aldi and Lidl offer value to customers but how can they do it so cheaply?

“We stock approximately 1,700 lines in our stores, which is considerably less than our competitors, however our aim is to provide customers with the best quality product at the lowest possible price. 

"For us everything revolves around value and price. We are also more focused on offering a superior shopping experience so we have invested heavily in upgrading the bakeries in our store and customer service programmes to meet growing customer expectations.” 

Things are looking good at Aldi too. The supermarket giant is currently engaged in a €100 million store expansion programme that will create 400 new jobs and see 20 new stores open in Ireland over the next three years. 

They said however that healthy eating is significantly influencing how consumers shop now. Last year alone Aldi saw a year-on-year sales increase of over 50% across its health food ranges, while sales of fish jumped 40% last year.

“In recent years we have witnessed a revolution in how people are consuming food in Ireland. Consumers’ demand for fresh, healthy food is extremely strong and continuing to grow. 

"Irish people are eating more fresh foods and they are much more health conscious. We have seen strong growth in sales of fish, fruit and vegetables, chilled products and fresh meat,” said an Aldi spokesman.

“Over the last three years we have doubled our fruit and vegetables range and now sell over three million units of fresh fruit and vegetables every week. 

"We have increased our chiller space by 40% enabling the merchandising of additional fresh and healthy eating products and developed a standalone chiller in all stores for fresh fish,” he added.

Aldi has also expanded its range of organic fruit and vegetables by 400% since 2014 and continues to develop its gluten-free range.

The supermarket sector in Ireland is worth €9 billion annually and there are 42,000 retail and wholesale businesses operating in Ireland, employing 275,000 people.

However, according to Kantar Worldpanel deflation is limiting growth in the grocery market as supermarket prices continue to fall.

Tesco, which has 149 stores in Ireland and 13,000 employees agrees that the shopping habits of its Irish customers have changed significantly over the last five years.

They said that with convenience now a “top priority” for consumers they have seen a “massive” increase in the area of grocery home shopping.

According to Tesco it has invested “significantly” to make online shopping easier for customers and it has seen double digit growth in orders year on year.

The one ‘big shop’ a week also seems to be less popular with shoppers. Consumers are now doing a number of top up shops a week rather than one large shop. Four out of 10 shoppers now spread their shopping over two or more trips each week, according to the B&A Retail Deep Dive 2016.

The original big supermarket, Dunnes Stores has launched a major campaign to hold onto it customers with probably the most aggressive money-saving campaign of all the supermarkets. 

Dunnes offer shoppers a €10 voucher for every €50 they spend on groceries. The catch is that the voucher must be used within a certain time-frame encouraging shoppers to return to Dunnes for their groceries. 

In addition to these 'Shop & Save' vouchers Dunnes also runs a loyalty card, offering shoppers vouchers to spend on groceries depending on how much they spend in their stores. 

Kantar Worldpanel has said the the Shop and Save vouchers offered by Dunnes is encouraging customers to buy more during each shop.

Meanwhile, Managing Director of SuperValu and Centra, Martin Kelleher said there has been three main themes in terms of how shopping habits have changed – health and wellness, interest in cooking and finding good value for money.

SuperValu has 2.6 million weekly customers across its 219 stores. The company said 75% of everything on SuperValu’s shelves is sourced in Ireland. 

Following retail sales of €2.67 billion in 2016, SuperValu plans to open three new stores in 2017, adding 190 jobs. Compared to five years ago, SuperValu had 195 stores, recorded retail sales of €2 billion in 2011 and employed 12,000 people.

Centra is also introducing healthier convenient food ranges as recently sales of Centra salad boxes jumped by 80%, while sales of raspberries, strawberries and blueberries increased 46% and water sales increased by 22%.

“By reducing shelf space for carbonates and promoting healthier alternatives instead, Centra sales of water have grown by over five times that of carbonates in the last year alone,” said Mr Kelleher.

“The shopper has become more convenience conscious, more foodie, more health conscious, more digitally engaged, and with that, more aware of international foods and food trends,” he added.

Online is also a growth area for SuperValu with online shopping growing by 22% in 2016. The shift to mobile was a key trend, with visits from customers browsing on smartphones up by 180%, they said.

Things are certainly changing on the grocery market scene and how supermarkets interact with their customers is also changing.

“Grocery retailers enjoy strong physical footfall to the stores; however mobile devices and e-commerce are providing customers with online solutions not seen before in the industry. 

"Although, people tend to buy items like footwear, jewellery and homeware online rather than food, there is evidence that online grocery shopping is on the increase,” said Mr Ward.

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