Opinion

Have supermarkets been superseded?

09 August 2016

Martin Lane, money.co.uk
Martin Lane

As the battle of the retailers continues, the industry has seen the worst decline in sales in two years, yet another blow to the likes of Tesco, Sainsbury’s, Asda and Morrisons. Shoppers have been voting with their feet over the past couple of years and the lessons are clear; they want value for money and convenience while brand loyalty is most definitely a thing of the past

Weather woes 

We’ve had a rather grotty summer, which means shoppers haven’t been rushing to the shops for their BBQ and Pimms but that hasn’t affected sales in the discount stores Aldi and Lidl. Sales continue to look bright for the two discount brands, suggesting price-conscious families have switched their habits due to careful budgeting and are willing to swap customer service for cheap goods when it comes to buying food. 

Posh nosh vs cheap eats

At the other end of the spectrum, M&S and Waitrose have surprisingly buoyant sales figures in stark contrast to the traditional big four. It just goes to show even the thriftiest of shoppers are allowing themselves to splurge on posh nosh for those special occasions. Consumers are switching shops according to what’s on their shopping list, buying staple goods at the discount stores then using the higher end retailers when it’s time to invite the neighbours over for dinner. This could be a sign of the times too – once-loyal shoppers of the big four are tightening their purse strings and the more affluent are sufficiently insulated to not have to change their shopping habits.

Convenience is key 

The days when families did one big shop at the weekend appear to be coming to an end. Time-pushed families don’t want to spend hours traipsing around the aisles of massive supermarkets on a Saturday and instead visit convenience stores more often. This is reflected in the Co-op’s results too. M&S is being well rewarded for its conveniently placed stores and its produce has changed as a result of this new movement as well. More staples and branded items have slowly been introduced into its lines as the retailer sees more members of the public pop in for their milk, bread, dog food and caviar.  

Cyber choice 

The biggest opportunity for the big supermarkets to claw back custom is online. More and more people are choosing to get their groceries delivered so serious investment into online and efficient delivery could really help the supermarkets to stay ahead of the curve. Great apps, a personalised shopping experience and helpful text reminders are all tools that the big four will have to adopt to keep up. Tesco, Asda, Sainsbury’s and Morrisons all have the financial resources and network of stores to achieve this, but with Ocado currently leading the way in this space, the big four still have a lot to do.

Health-conscious millennials 

The uprising of social media has also seen a revolution among health-conscious millennials who are more likely to pick the gym over the pub. Millennials are choosing to eat right and they brag about it too. You only have to look on Instagram to understand this trend – beautiful pictures of fresh fruit and vegetables and perfectly plated food are what users are sharing. You simply don’t see pictures of bowls of crisps and a packet of fags.
Celebrities such Jamie Oliver and Fearne Cotton are leading the trend, encouraging us all to eat healthily and prepare freshly cooked food. Staying fit and eating well is a recurring daily theme and the trend is bound to directly affect sales of certain goods in supermarkets. 

Socially conscious millennials

Alongside the trend to eat healthily, buying local is coming back into fashion too. The quaint fantasy of going back to the times of buying your meat from your local butchers, veg from your local grocers and popping up to your local farm for your milk and eggs is ever so slowly becoming the new reality. Supporting local isn’t going away and supermarkets profits will suffer for as long as being socially conscious remains cool with millennials. 

The rise of the organic 

The dramatic rise in veg box and organic goods sales means lots of people are choosing to go elsewhere to get their hands on unprocessed foods. The supermarket giants are trying to become part of the movement by producing wonky veg boxes of their very own, but I suspect many consumers won’t bite. While selling these boxes is a positive step that should reduce waste, the appeal of organic veg boxes is in buying direct from the suppliers, making it especially tricky for supermarkets to compete in this space.

Martin Lane is editorial team leader at independent price-comparison website money.co.uk after following a career in financial services.

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