CONVENIENCE RETAILING: TRENDS & OPPORTUNITIES SPOTLIGHT EUROPE

Transcription

1 CONVENIENCE RETAILING: TRENDS & OPPORTUNITIES SPOTLIGHT EUROPE Val Kirillovs Research & Insights Director SUBTITLE HIM June 2018

2 WHO ARE WE Putting shoppers at the heart of everything we do. For 50 years HIM have been joining businesses together with the strength of world class shopper research and insights. At HIM we believe in the power of putting shoppers at the heart of everything we do. We are proud to be the trusted name for insight within convenience, forecourts, high street, wholesale and more. INFORM We speak to over 100,000 shoppers every year in the UK and internationally. INNOVATE We continuously look to develop our research to deliver to the most relevant and compelling insight. CONNECT We cover all channels, markets, retailers and wholesales in depth. INSPIRE We work with 100+ FMCG suppliers delivering competitor analysis, shopper experience insight and unique consultancy.

3 METHODOLOGY Unaffiliated Independents For our extensive UK survey, over 20,000 interviews across England, Scotland, Wales & Northern Ireland were conducted. Face-to-face in-store interviews speaking to shoppers as they enter and exit the store capturing moment of truth responses. Research covers all days of the week and from 7am 10pm each day. Conducted between 31 st Jan and 8 th April For our international data, we surveyed 200 individuals per country, online.

4 CONTENTS HEALTH IS HERE TO STAY SOCIAL CONSCIOUSNESS RADICAL TRANSPARENCY From plant-based eating to a growing focus on mental wellbeing Being socially and environmentally responsible has become a business imperative Consumers are looking for brands to court them with transparency, simplicity and evidence 04 TECHNOLOGY BRINGS RADICAL CHANGE TO HOW WE SHOP IT S ALL ABOUT EXPERIENCES CONVENIENCE CULTURE From contactless payment to 1-hour delivery options, we can now shop much more easily and impulsively In an increasingly automated world consumers desire unique, immersive and personal experiences How we now expect products and services to make our lives easier and opportunities for convenience retailing

5 HEALTH IS HERE TO STAY The majority of shoppers in the UK, Spain, Germany, Poland and Russia say they eat more fruit now than they did a year ago 3 in 4 Spanish shoppers exercise regularly, making them by far the most active nation compared to the rest* Source: HIM 2018 *UK, DE, PL, RU

6 PLANT-BASED EATING IS MOVING MAINSTREAM 1 in 2 shoppers in the UK, Spain, Germany, Poland and Russia now eat less meat than they did a year ago 13% of UK shoppers follow a vegetarian and/or vegan diet Source: HIM 2018

7 VEGGIE & VEGAN OPTIONS ARE NO LONGER A NICHE by Chloe., London: A vegan restaurant chain with locations in NYC, LA and London Irma, Denmark: The supermarket trials a dedicated vegetarian & vegan section under the sub-brand The Green Meal Lidl, Europe: Lidl launched a range of vegan pizza across several European countries earlier this year

8 IT S NO LONGER JUST ABOUT PHYSICAL HEALTH I pay attention to my mental wellbeing 83% 93% 79% 85% 79% Source: HIM 2018

9 UK C-STORES LEAD THE WAY WITH INITIATIVES TO MAKE PEOPLE FEEL MORE CONNECTED M&S, London: M&S host Frazzled Cafés in partnership with mental health campaigner Ruby Wax Co-op, UK: The co-operative has teamed up with the British Red Cross to tackle loneliness

10 SOCIAL MEDIA IS FOSTERING A GIVING BACK MENTALITY Almost 8 in 10 Millennials around the world have involved themselves in a charity or good cause * 84% of Spanish shoppers rate community involvement (very) important when it comes to grocery shopping Around 4 in 5 shoppers in Spain, Germany and Poland prefer shopping at stores that sell products from their local area *Source: Deloitte Source: HIM 2018

11 SOCIAL & ENVIRONMENTAL RESPONSIBILITY HAS BECOME A BUSINESS IMPERATIVE 66% of Polish consumers prefer to drink water from a recyclable bottle* 45% of year-old shoppers in the UK are willing to pay more for products that make an impact on issues they care about Source: HIM 2018 *Source: Mintel

12 TODAY S CONSUMERS DEMAND UNCOMPROMISING TRANSPARENCY I think it s important that brands are transparent about how they produce their products. 90% 94% 89% 87% 90% I prefer buying brands that are transparent about how their products are produced. 82% 92% 83% 78% 86% Source: HIM 2018 UK ES DE PL RU

13 AND IF THEY DON T GET IT, THEY LL HAPPILY GO SOMEWHERE ELSE 1 in 3 UK shoppers have switched to another brand that was more transparent or socially responsible Source: HIM 2018

14 INTERNET & SOCIAL MEDIA HAVE ENABLED CONSTANT AND INSTANT SCRUTINY 60% of Polish consumers agree that social media is forcing food and drink companies to be more transparent* *Source: Mintel

15 TECHNOLOGY BRINGS RADICAL CHANGE TO HOW WE SHOP Amazon Go Apple Pay Tossed

16 HOW OPEN ARE EUROPEAN SHOPPERS TO NEW TECHNOLOGY? Which of the following would you use/do you use at a grocery store?* Contactless payment 48% 60% 61% 69% 73% Click & collect Self-checkout 50% 49% 50% 49% 60% 60% 72% 75% 72% 75% UK Spain Germany Poland Russia Mobile app for online shopping 24% 32% 40% 47% 51% *net of (would) always use and (would) use sometimes Source: HIM 2018

17 IT S ALL ABOUT EXPERIENCES In an increasingly automated world consumers desire unique, immersive and personal experiences. $8.0 trillion The value of what consumers will spend globally on experiences like travel, leisure and foodservice by 2030* Source: HIM 2018 *Source: Euromonitor

18 EUROPEAN SHOPPER SEEMS TO PLACE HIGH IMPORTANCE ON HUMAN INTERACTION Germany Shoppers who (would) never or (would) almost never use selfcheckouts 49% 95% Shoppers who rate staff friendliness/helpfulness important 91% 91% 85% 84% Spain 47% Russia 33% UK 28% Poland 21% Spain Germany Russia UK Poland Source: HIM 2018

19 FOR UK CONVENIENCE SHOPPERS EXPERIENCE RELATED FACTORS OUTWEIGH PRICE Top factors that are important to shoppers Top 3 factors relate to shopping experience Ranked 8th Convenience Quality of staff Store appearance Ease of shop Product availability Range of products Speed of service Value for money Prices Promotions Quality of fresh produce Supermarkets Prices Product availability Quality of fresh produce Value for money Range of products Cleanliness of store Ease of shop Quality of staff Speed of service Promotions Ranked 1st Source: HIM CTP 2018, HIM High Street 2017

20 DO THESE INSPIRE YOU?

21 EXAMPLES OF BEST IN CLASS BRANDS

22 CONVENIENCE IS NOW INGRAINED IN OUR LIVES 86% of Russian shoppers say it is important that a grocery store is within 5 minutes walking from where they are 1 in 3 shoppers in the UK, Spain and Russia consider it important for a grocery store to offer convenient solutions (e.g. pre-cut veg/fruit) Source: HIM 2018

23 I WANT IT AND I WANT IT NOW! Tesco, London: The leading supermarket chain launched Tesco Now earlier in 2018, allowing for up to 20 items to be delivered within 60 minutes UberEats, global: UberEats is now available across the globe, making it possible for users to order their favourite restaurant meal at the push of a button

24 IS THE ONLINE GROCERY SHOPPING OPPORTUNITY UNDER- EXPLORED? Shoppers who (would) always use or (would) sometimes use the selected options Delivery to your home 38% 51% 50% 53% 48% Mobile app for online shopping 24% 32% 40% 47% 51% UK Spain Germany Poland Russia Source: HIM 2018

25 FOOD-TO-GO IS A DRIVER TO STORE, PARTICULARLY IN THE UK, SPAIN AND POLAND Shoppers who agree with the selected statement I am more likely to visit grocery stores that have a good food to go offer. 42% 60% 63% Dunnes in Dublin focuses on freshness and premium quality of ingredients for its food-to-go offering 64% 30% UK Spain Germany Poland Russia In Germany, Rewe launched Rewe To Go which has a strong focus on health Source: HIM 2018

26 UK CASE STUDY THE FOOD- TO-GO OPPORTUNITY SUBTITLE How to tap into the thriving food-to-go trend

27 WHILE UK FTG MARKET IS IN GOOD HEALTH, FTG MISSION IN CONVENIENCE IS STRUGGLING UK FTG markets vs. FTG mission in convenience UK FTG market value, bn FTG mission in convenience 25% 25 bn 20% 20% 17.81bn bn bn bn bn 20 bn 15% 18% 15% 15% 13% 15 bn 10% 10 bn 5% 5 bn 0% (F) 0 bn Source: HIM CTP 2018, MCA Eating Out Report 2018

28 WHY IS FOOD-TO-GO IMPORTANT TO CONVENIENCE Shoppers missions by age profile 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Food to go Newsagent 46% 42% 37% 31% 27% 21% 21% 13% 15% 16% 13% 11% 7% 2% 4% 1% Source: HIM CTP 2018

29 LACK OF MEAL DEALS IS A KEY BARRIER TO BUY MORE FTG Main reasons preventing FTG shoppers to buy more food/drink to go than they currently do No meal deal offer 27% Not many meal deal offers Uninspiring choices They don't stock enough items in general Not enough fresh choices 17% 15% 13% 13% They don't introduce that many new items that often A restricted chilled prepacked Sandwich range Sandwich range within a meal deal Too many unhealthy items 8% 8% 8% 6% The portions are too small 4% Source: HIM CTP 2018

30 MEAL DEALS NEED IMPROVEMENT ACROSS VARIOUS FACTORS: CHOICE, QUALITY & PRICE What would you like to see improved about the meal deals in this store? Include a wider range of products to choose from 15% Better quality sandwiches 11% A cheaper price 11% Healthier alternatives for snacks (i.e. fruit) 11% Make it clearer about what products are included and which are not 8% Include more well-known brands 7% Budgens, Three Mile Cross Source: HIM CTP 2018

31 FASCIAS WITH HIGH FTG PENETRATION WHAT ARE THEY DOING WELL? On average, 13% of convenience shoppers are on a FTG mission. This is considerably higher for Little Waitrose (20%), Tesco Express (19%) and BP (19%). Below some examples of how these fascias are pushing their FTG offerings. Little Waitrose Blackfriars: Food for Now section with seating area, fresh/hot food, coffee Tesco Express Blackfriars: Extensive Meal Deal on the Go section BP/M&S Midhurst: M&S food-to-go & Wild Bean Café with hot food Source: HIM CTP 2018

32 INVEST IN FRESH SOLUTIONS TO BOOST QUALITY AND HEALTH PERCEPTIONS OF FTG Dunnes Dublin Centra Dame Street Dublin Dollard & Co Dublin

33 INNOVATIVE FTG CONCEPTS TO WATCH Vita Mojo: healthy, tech-led convenience, ingredient quality & freshness Ole & Steen: novelty factor (Scandinavian), ingredient quality & freshness Veggie Pret: affordable sustainability, ingredient quality & freshness

34 THOUGHTS FROM HIM OUR CONVENIENCE-DRIVEN LIFESTYLE IS GREAT NEWS FOR THE CONVENIENCE SECTOR BEING CONVENIENT ONLY IS NO LONGER A STRONG ENOUGH SELLING POINT CREATE STAND-OUT AND BUILD LOYALTY BY PROVIDING A UNIQUE SHOPPING EXPERIENCE We live active, often very busy lives which only makes our desire for convenient products, services and solutions stronger. Our convenience culture plays hugely to the convenience sector s advantage, however, with other channels stepping up their game in terms of convenient offerings, the sector needs to ensure it meets shoppers needs better than other channels. Today s shopper is a demanding one and this is unlikely to change in the future. Convenience on its own is no longer a strong enough selling point and convenience retailers must ensure to meet shoppers demands in terms of health, shopping experience and social responsibility. This of course will differ by country and what works in one might not be successful in another. We live in a time in which consumers are expecting an experience with the products and services they buy. Convenience retailers can create memorable experiences in multiple ways such as offering great customer service, getting involved in their local community through events and charity, or simply offering a range that is tailored to their local customer base (something which larger retailers are not necessarily able to do).

35 THANKS FOR YOUR ATTENTION! SUBTITLE

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