Retail industry consultant, director at Food First Consulting, and partner International Private Label Consult and Uspire Ltd, Malachy O’Connor does his monthly deep dive into Kantar Worldpanel’s monthly share statistics
The Kantar Worldpanel data for the 12 weeks to 1 November sees Dunnes on 22.2% taking back first place for the first time since March 2020. SuperValu are in second place on 21.9%. Tesco stay third on 21.2%, Lidl are fourth with 12.7% and Aldi are fifth with 12.3%.
The market grew by +14.4% during this latest 12 week period. This is considerably down on the +25% growth we saw during the mid-summer lockdown. Growth of +14.4% equates to over €360 million extra spent on groceries over the 12 weeks.
Restrictions Reimposed
The most recent Kantar data spans a 12-week period from Monday, 10 August to Sunday, 1 November and is made up of seven weeks of normal(ish) shopping where consumers had re-engaged with the food service sector and the growth in take-home groceries had moderated to about +12% year-on-year.
The following five weeks saw uplifted sales, with the Dublin Level-3 restrictions (18/09) eventually rolling out nationwide (07/10) and being quickly followed by Level 5 restrictions nationwide (22/10).
These restrictions had a noticeable effect, albeit without any significant panic-buying. Retailers did observe a cohort of shoppers stocking up and getting ready to stay at home and restrict their movements. Many of the dynamics are similar to the first lockdown period, but there are some additional points to note.
Dunnes & SuperValu
This second lockdown is quite different in nature to the first. Firstly, the restrictions are not so onerous as in April, May and June. We’re not restricted to 2km, and while we are encouraged to work from home, the roads are quite busy and the economy is largely still functioning. Certainly, there are none of the ghost town drone videos circulating on social media.
Secondly, there’s a sense of fatigue with regard to the restrictions. People appear willing to test the extremes of their 5km limit, but we are all wearing masks as standard and anxiety levels are lower. As a result, shoppers are not shopping ultra-locally to the same extent as the summer and they are not competing for delivery slots from online orders.
In line with this, the fortunes of Dunnes Stores and SuperValu appear to be closely linked. SuperValu’s +220 stores and online infrastructure are less of an advantage this time around.
Equally, Dunnes late start with online groceries, and their +100-store estate, are less of a handicap for them. This dynamic sees Dunnes return to first place and SuperValu slip to second, but it’s worth noting that SuperValu’s share is still 0.7ppts above last year and Dunnes’ share is still -0.6ppts behind last year.
Tesco’s latest market share sees improvement. Again, with the second lockdown, their large stores can handle more footfall and their online offer is the best in the market. They have also overlapped the loss of the Douglas Shopping Centre store and relaunched major revamps in Dundrum and Swords. Finally, their competitive position is sharper compared to last year, having invested in both branded and private label price cuts.
Lidl are managing the pandemic well. They have a lot in common with Aldi, but lots to differentiate them too. They are much further along with their online business via Buymie.ie now covering Dublin, Greater Dublin and Cork.
Their stores are bigger on average than Aldi’s and they have a 20-store advantage, which is handy if the market uplifts by 20% and the shoppers need a bit more space. They have also been much more open to stocking branded food and drink products, both in core range and as special buys.
Aldi are growing, just not as fast as their competitors. As a result, their market share fell back to 12.3% in this latest 12 weeks. September and October are usually a peak market share period for the discounters since they are relatively stronger at Back to School and Halloween than at Christmas.
But a subdued Halloween, and the limitations on selling non-essential items, appears to have impacted Aldi badly, especially their middle aisle proposition. Bear in mind that Aldi are carrying the benefit of five new store openings and eight project fresh refurbishments in these numbers.
For many years, Aldi could be rightly satisfied that they were able to generate higher market share from less stores than Lidl. But in the pandemic, it would appear that having less stores and smaller stores than Lidl is a disadvantage that is compounded by not having an established online offer.
On the upside, as of mid-November, Aldi have extended the Deliveroo trial and are now covering Dublin, Cork, Galway and Limerick with up to 330 products available for online ordering and rapid delivery for a fixed €4.99 fee.
Aldi UK are currently trialling click and collect, so watch this space for a trial in Ireland too. Aldi Sud also opened an XXL super-large format in October, with almost 2,000 square metres of sales space in Mulheim, so they can’t be accused of not addressing their challenges.
Christmas 2020
As we approach our first lockdown Christmas, retail staff have a mammoth task ahead. Trying to make Christmas as ‘normal’ as possible, maximising on-shelf availability and managing the flow of customers.
Christmas week sales can be two or three times a normal week, so retailers will need to think about how they manage social distancing and spread out this peak footfall to allow for everyone who needs to buy a Turkey that isn’t available until 19 December.
Tesco have acted early and have launched radio ads to remind us to stick to one person per trolley where possible and to use the quieter days and times to avoid the queues.
The other magic ingredient to a successful Christmas is ‘The Big Ad’. This is a huge opportunity to connect with shoppers as fellow people, tugging heart strings, saying “we get what you’re going through”. So, it remains to be seen who will win the battle of the Christmas ads.
Lidl and Aldi have ignored the pandemic altogether with their mischievous elves and Kevin the Carrot doing Top Gun. Tesco are focusing on the funny side of the pandemic with their ‘naughty list’ ad. SuperValu’s ‘little boy and his grandad’ ad is a beautiful example of gently capturing the moment.
I think it will place them strongly in Irish consumer’s hearts this Christmas. And at a time when ‘shop local’ is the mantra, there is an opportunity for SuperValu to leverage their store advantage and online capacity and maybe get back to number one. They’ve just got to believe.
#kantar for 12w/e 01/11 has #dunnesstores in 1st at 22.2% share, #supervalu 2nd @ 21.9% and #Tesco @ 21.1%. #Lidl & #Aldi 4th/5th on 12.7% & 12.3%.
The market grew +14.4% (+18.8% for October) as regional and national lockdowns encouraged anxious shoppers to stock up and stay home.
Food service is take-away only & non-essential retail is closed but both are much better equipped for engaging customers and selling online this time around, explaining why sales are up around +20% (not +25% as per the summer lockdown).
Anxiety levels are lower than the last lockdown & people are open to testing the limits of their 5km radius. So, SuperValu’s proximity advantage is less relevant and Dunnes’ late start online is less of a handicap.
The subdued Halloween and restrictions on selling non-essential items is impacting Aldi. Like the last lockdown, their high sales densities limit their capacity to absorb a 20% uplift in the market.
In-depth article to follow - register here for my next #AMA #askemeanything live webinar on Friday December 11th at 10:00 https://www.eventbrite.ie/e/ask-me-anything-11th-december-2020-tickets-129470282099
#insights #supermarkets #retailerbrands #pl #negotiationskills #discounters #retail #groceryretail
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