THE CHANGING RETAIL LANDSCAPE - · PDF file% of sales of modern retailing from stores > 2,500...

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Copyright © 2017 The Nielsen Company. Confidential and proprietary.

Increased Competition for the Convenience Shopping Mission

Mike Watkins, Head of Retailer and Business Insight, UK and Europe June 13, 2017

THE CHANGING RETAIL LANDSCAPE

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THE TIMES THEY ARE A-CHANGIN` ….

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OPPORTUNITIES AND CHALLENGES

PROXIMITY RETAILING IS IMPORTANT FOR CONTINUED SUPERMARKET GROWTH

SHOPPERS ARE SPENDING MORE ON FRESH FOODS

CROSS CHANNEL MISSIONS ARE DRIVING INNOVATION IN CONVENIENCE RETAIL

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THE AGE OF PROXIMITY RETAIL

LITTLE AND OFTEN

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SHIFT OF SALES AWAY FROM LARGE STORES

Source: Nielsen

36%34%26%

14%

1980 1990

36%

2000 2005 2015

% of sales of modern retailing from stores > 2,500 sq m in Europe

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CHANNEL SHIFT LED BY CONSUMERS

Total Market Growth +1.1%

Convenience On Line Discounters

+13%

Share of FMCG Sales

6%26%

Source: Nielsen 52 weeks ending 31/12/2016

Supermarkets

12%

+15%+1%+0%

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THE NUMBER OF SHOPPING TRIPS IS GROWING FASTER IN UK

0

10

20

30

40

50

60

70

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

France Spain Germany Italy UK

Source: Nielsen Homescan : Av Number of visits to Supermarkets by shoppers over a 12 week period

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SPENDING MORE ON FRESH FOODS

INNOVATION IN PROUCT, STORE AND SUPPLY CHAIN

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A CHANGE IN SHOPPER BEHAVIOUR THAT BENEFITS CONVENIENCE STORES

+13%+15%+1%+0%

FREQUENT VISITS - Little and often

FRESH FOOD FOR NEXT 3 DAYS - Baskets of up to 10 items

FOOD TO GO - Spending Away from Home

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TRENDING TOWARDS CONVENIENCE

SMALL STORE SHOPPING

More households are shopping for

6 to 10 itembaskets

THE NEXT2 DAYS

Sales growth +4% for 1 to 5 item baskets

at Supermarkets

QUALITY MEALALTERNATIVE

Meals on the Move, Dining at

Home

Source: Nielsen Homescan 52w/e 31st December 2016

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TOP 10 RANKED ATTRIBUTES 2016

QUALITY FOOD IS THE MOST INFLUENCING FACTOR WHEN CHOSING A CONVENIENCE STORE

1

2

4

5

6

7

10 Good Displays Range of Products in Stock

Efficient Checkout

Promotions and Offers Convenient Location

Quality Food and Drink

Nielsen Shopper Trends CVS UK 2016

Premium Brands

Store Environment

Rewards Programme

Excellent customer service

Good Displays

Range of Products in Stock

3

8

9

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FRESH FOOD IS A GROWING CATEGORY IN CONVENIENCE STORES

Source: Nielsen Scantrack, Data 52we 31st December 2016 vs LY Convenience Stores 3000 sq ft and under

0.6

-3.1

4.7

0.4 0.91.6

2.1

0.1

-0.9

2.4

-4-3-2-10123456

TOTALSTORE

TOBACCO FRESH FOOD IMPULSE BWS HEALTHBEAUTY

TOILETRIES& BABY

NON FOOD AMBIENTGROCERY

HOUSEHOLD& PET

FROZEN

Value Growth YoY (%)

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FORMAT DEVELOPMENT IS HELPING FORECOURTS

Nielsen Scantrack Total Store Sales GB* Convenience = stores under 3,000 sq ft | Total Coverage exc Discounters

Sales growth by Channel | % growth in Value Sales | 12 weeks to 08.04.17

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LIVING WITHOUT TOBACCO … ATTRACTING NEW SHOPPER MISSIONS

Nielsen Scantrack | UK Multiple Forecourts | 52 weeks to 15.04.17

Fastest growing categories in Fresh Foods in Forecourts over the last 12 months

BAKERY

PRODUCE

CONVENIENCE & DELI

FRESH, NATURAL AND PREPARED FOODS WILL GROW STORE SALES

AND?OR?

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MEETING THE EXPECTATIONS OF SHOPPERS

38%Visit new C stores as they pass by ..

17% Intend to

buy food to go

24% Increase in JV stores

in UK Convenience …the fastest growing

business model


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FOOD SERVICE FOR GROWTH

LOCATION, LIFESTYLE AND LEISURE

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65%

SUPERMARKETS NEED TO FIND NEW GROWTH

Share of Calories that Supermarket shoppers purchase at large Supermarkets (Source: UK Supermarket Retailer)

Market size of UK Food Service (Source: Verdict)£86b

£143b Food Retail sales in UK (Source: Nielsen)

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REASON FOR VISITING A C-STORE

MEAL PREPARATION IS NOW A REASON FOR VISITING A CONVENIENCE STORE

Nielsen Shopper Trends CVS UK 2016 *Top up is combination of planned and distress

55%TOP UP SHOP*

17%FOOD TO GO SHOP

11%MEAL PREP SHOP

IMMEDIATE NEEDS E.G. FTG

TOP UP NEEDS/MEAL PREP

STOCK UP NEEDS

Store layouts should reflect mission based shopping

Strategy should be to convert top up shoppers to FTG mission – leading with hot

food to go and drinks to go

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DRIVEN BY THE YOUNGER GENERATION OF SHOPPERS

18-34yrs.

35-49 yrs.

50-65 yrs.

16%11%

25%

ON A FOOD TO GO MISSION – REASON FOR VISITING A C-STORE


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…AND WE ARE SEEING THE EVOLUTION OF THE FOOD SERVICE IN CONVENIENCE STORES

Forecourt and branded food to go partnerships

High quality food to go services/sit-in FTGHot food

to go offering

Quick food, personalisation –ability to control .calories & quantities. Recipe transparency

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WHAT`S NEXT ?

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Convenience Retailing

Coffee and Bakery shops

Local, WeeklyGrocery Shop

Modern ConvenienceStores

NeighbourhoodShopping

STRUCTURAL CHANGE IS UNDERWAY

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CHANGING THE CONVENIENCE MODEL

DifferentiatedFRESH

Sourcing LOCAL

Different Eating OccasionsFOOD SERVICE

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THE FUTURE IS PESONALISED CONVENIENCE

Fresh Foods with Top Up Staples

Food to Go and Meal Preparation

Franchised Business Models

The Eating In Occasion

Speciality Stores

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NEW FORMATS, SELL OFFS AND CONSOLIDATION

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COMPETITION FOR CONVENIENCE MISSIONSONLINE SHARE OF CPG IN UK WILL REACH 10% IN 2020

SPEED EXPERIENCEPERSONALISATION

With new technology and channel blurring, C-store retailers must differentiate to stay relevant.

In Store Experience and Online work can work together

Convenience/Speed will still be the core driver of visits to

store AND to online Retailers need to deliver on

these values every time

Industry leaders are developing mobile apps. and some form of Digital

Rewards program for Convenience

CHANNEL CLASSIFICATION IS BECOMING LESS RELEVANT

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GLOBAL SOURCING

FRESH FOODS

HEALTH AND

WELLNESS

LITTLE AND OFTEN

CLICK AND COLLECT

GLOBALTRENDS WITH IMPLICATIONS FOR CONVENIENCE

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FIVE STRATEGIES FOR SUCCESS

Format Development

Food Service

Personalised Convenience

Local Services Hub

Technology

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REMEMBER … IT`S ALL ABOUT THE 3 `L`s

LOCATION LITTLE & OFTEN

LIFESTYLE

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“ An acceleration of proximity retailing, a shift towards fresh and natural foods and the development of food service will be the route to growth in Convenience retail in the next 3 years”

[email protected]

THE CHANGING RETAIL LANDSCAPE - · PDF file% of sales of modern retailing from stores > 2,500...

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