Food Retailing

Food Retailing - UK - November 2008
Brand Elements
This section provides an insightful and competitive look at brand dynamics in the
food retailing marketplace. Mintel assesses both rational and emotional
characteristics of brand performance and consumer impact. Mintel also comments on
selected brands which best illustrate the scope of the market.
We have drawn insight from an independent survey, conducted by GMI on behalf of

Mintel during September 2008, using a GB Internet sample of 1,000 internet users,
aged 16+. The survey examines eight main elements of brand evaluation (usage,
consideration, momentum, satisfaction, commitment, loyalty, engagement and
image), and we have added motivation questions. We analyse brands in the context
of their own market, in category, which is where consumers engage with them.
Further details are available from the Brand Intelligence team.
BRAND MAP
The Mintel Brand Elements Map below illustrates a three-dimensional brandscape
based on: differentiation – an indication of vitality and profitability; trust – an
indication of brand integrity and stature; and experience – consumers who have ever
used or would consider the brand – an indication of knowledge and presence in the
category.
This map gives a snapshot of the current strength and quality of selected food
retailer brands, where they are in their growth and how healthy they are.
This report is supplied in accordance with Mintel's terms and conditions. Supplied to De Montfort
University.
© Mintel International Group Limited.
FIGURE 29: Attitudes and usage of food retailer brands, September 2008
Base: all internet users aged 16+ who have heard of the brand
The food retailing market is highly competitive, but this brand map shows the major
supermarkets are clearly differentiated – each clearly stands for something. The Co-
op’s focus on ethical concerns is enough to differentiate it from Somerfield (which it
has just bought) and also to increase trust in the brand. Aldi and Lidl are
interchangeable.
The whole category has however lost 10% trust since last year. Consumers who
have ever used the brand increasing by 17% indicating some variety seeking going
on. This is more likely to reflect trading down out of necessity to extend purse
power, as a its perceived to be 6% less 'worth paying more for', 10% less value and
4% less satisfaction than the year before.
TESCO
What the brand is trying to achieve
Background Founded 1924 by Jack Cohen. One of the first into
supermarkets in the 1950s. Drifted in the 1960s and
70s. Recovery started in 1977. Overtook Sainsbury’s to
become market leader in mid-1990s. Now bigger than
Asda and Sainsbury combined. Middle mass-market,
quality, value, wide choice, convenience. Sub-brands
aim to capture the whole market range from entry level
(Value) to premium (Finest). Strong, complementary
non-food offer.
Positioning (10/08) The country’s biggest discounter.
Values Quality, freshness, value, choice, low prices.
Proposition Every little helps.
Recent advertising Focus on price. High profile celebrities used in the past,
less in evidence in 2008.
University.
What the consumer thinks
FIGURE 30: Attitudes towards the Tesco brand, September 2008
Personality:
outperforms on
accessibility,
friendliness,
vibrancy. But
also most likely
to be only
interested in
profits (up 7%
on last year)
Strengths:
everything, but
particularly best
value; bestrides
the world like a
colossus with
momentum like
a steamroller
Weaknesses:
reputation
trailing
Sainsbury’s and
M&S
● The market leader, familiar to almost everyone. Achieves above average

ratings in almost every sphere and is five percentage points ahead of Asda and
Sainsbury’s. Over half use it as their main grocery shop.
● Rated highly for value and is even seen as most friendly putting it with the
highest retention of supermarkets and in the top ten of Mintel’s brands at 76%.
● Does not seem to have suffered from the media campaign against it except
that no company ranks higher for being only interested in profits, a further increase
on last year. This could indicate that consumer attitudes to Tesco could switch
quickly.
● In spite of its size it is widely perceived as still growing. As the other market
research in this report shows, it is taking more business from the hard discounters
than it is losing to them but it’s also seen to be losing value and satisfaction as a
result.
● A retailer is only as good as this year’s ranges, but this is a picture of a
retailer ‘firing on all cylinders’.
SAINSBURY’S
University.
Background 1869 – first shop in Drury lane, a dairy trading with the
strapline ‘The best butter in the world’. Lost its way in the
90s and has been fighting for a sense of identity ever
since, now aiming to corner the best for healthy food
corner. Middle mass market.
Positioning Sainsbury's Supermarkets is the UK's longest standing
major food retailing chain with a heritage of providing
customers with healthy, safe, fresh and tasty food at fair
prices.
Values Quality, freshness, product innovation, value for money.
Proposition Try something new today, though the emphasis is now
shifting back to price.
Recent advertising “Feed your family for a fiver”. Advertising campaigns
have been headed by Jamie Oliver.

FIGURE 31: Attitudes towards the Sainsbury’s brand, September 2008
Personality:
one of the most
friendly, vibrant,
accessible, if
slightly less so
than Tesco. But
less calculating
than Tesco as
well.
Strengths:
trust, stronger
quality and
reputation than
Tesco. Worth
paying more for
than Tesco, (but
not as much as
M&S and
Waitrose).
Weaknesses:
not good value –
a major
drawback at
present vs Tesco
and Asda.
Standing still.
University.
● The number two in the market, though trading from smaller stores than the
three other majors. This is a problem for Sainsbury’s as it wants to expand its non-
foods.
● Built up on the quality of its own brands, Sainsbury’s now lives in the shadow
of Tesco – outperforming on quality and reputation, but, crucially, underperforming
on trust and value.
● Its momentum is poor and it is perceived as standing still. This suggests that
the recent recovery will be short lived or perceptions haven’t caught up yet. Their
reassertion of healthy is the way to steal some high ground on Tesco, but it needs
wider exposure to push that through.
● Satisfaction is high – much the same as Tesco and only a short way behind
M&S, which scores highest.
● Commitment to the brand is strong – well above average in criteria such as
worth paying up for, being recommendable. That should help it support its slightly
premium position during the downturn.
ASDA
Background 1949 – founded as the retail arm of Associated Dairies
but branded ASDA (ASquith and DAiries) in 1965.
Famous for ‘Asda Price’ campaign reintroduced in 80s.
Moved quickly into superstores, but non-foods only
really gained credibility with the launch of George in
1990. Bought by Wal-Mart in 1999. Pitched at the lower
mass market, price and value-led, engaged in open price
war with Tesco.
Positioning Britain's third-largest supermarket chain and winner of
Britain's lowest priced supermarket award for ten years
running.
Values People. Prices. Planet – Low prices, affordable, consumer
champion.
Proposition Asda Price; Asda – why pay more?
Recent advertising Price led – aimed at combating competition from the
discounters; Rollback – ongoing price led promotion. Has
featured Victoria Wood, Ian Wright, James Nesbitt and
Paul Whitehouse.
University.
FIGURE 32: Attitudes towards the Asda brand, September 2008
Personality:
accessible, friendly
and most fun.
Strengths: Best
value with Tesco,
gaining second
most ground with
other discounters;
high satisfaction,
high trust.
Weaknesses:
Quality and pride
only average,
significantly behind
Tesco.
● Asda, together with Tesco, is seen as the value retailer and scores strongest
of all in this survey for good value
● It has excellent momentum, second only to Tesco, but has lost a little ground
since last year on great service and being the friendliest – one of its core
differentiators.
● It scores well on motivation and ranks second in the market for the number of
people using it for their main shop. (But Asda shoppers spend less per person and
Asda’s market share is lower than Sainsbury’s.
● Asda ranks well on commitment – it is above average for being
recommendable, but is not seen as being worth paying more for, its overall customer
satisfaction is above average, but behind its peers. This is unfortunately the effect of
beating the price-led and nothing else drum.
MORRISONS
Background 1899 – founded by William Morrison. 1961 first
superstore opened. 2004- bought Safeway, a major
mistake. Now the 4th largest supermarket chain.
Founder of present business, Ken Morrison, retired
2008. Historically has competed alongside Asda – lower
mass market, price led. Post-Safeway a greater
emphasis on fresh and quality goods. Non-foods
strong, but no clothing. Rebranding in July 2007 is
starting to take effect.
Positioning Morrisons makes and prepares a wider range of fresh
food in-store every day than any other supermarket
Values Quality, value, freshness.
Proposition The food specialist for everyone.
University.
Recent advertising Fresh choice for you, led by various ‘celebrities’. Recent
campaign ‘ savings for you’.
Celebrities: Denise van Outen, Lulu, Alan Hansen,
Diarmuid Gavin and most recently Richard Hammond.

FIGURE 33: Attitudes towards the Morrisons brand, September 2008
Personality: does
not stand out.
Perhaps because of
the Safeway merger,
it seems to lack
personality or
distinctiveness.
Accessible, reliable
and friendly.
Strengths: good
value, gaining some
ground.
Weaknesses:
innovation,
distinctiveness
although making
progress from last
year and quality
● Morrisons is rated for its value, but to nothing like the same extent as Asda,
its closest rival as a lower mass market grocer, or Tesco the market leader, although
it does manage to beat Sainsbury’s.
● Its momentum is positive. Again it beats Sainsbury’s, but falls well behind
Tesco, Asda and the discounters.
● Of all the superstores targeting primary shoppers, Morrisons’ satisfaction is
lowest. It is above average, but that reflects the levels of dissatisfaction with the
others.
● Morrisons ranks poorly on innovation – one of the key drivers at present –
above average on value, but the overall impression is of a lack of personality.
● We believe Morrisons’ problems are the legacy of the Safeway merger. The
two businesses were too different. Former Morrisons customers were loyal and rated
the business highly, but former Safeway customers probably shop at Morrisons for
want of anything better.
● The performance is improving and that is a sound base from which to address
these fundamental brand problems. It is making ground on differentiation so there
are signs that its brand campaign is having a steady build, borrowing celebrities for
impact, but it should take care to build its own personality to sustain on its own as
University.
well.
THE CO-OPERATIVE MOVEMENT

Background 1857 – The first co-operative, The Rochdale pioneers,
started. The Co-operative group has grown out of the
CWS and a series of acquisitions to dominate the
movement. Now purely a C-store business, operating
small supermarkets on secondary high streets and
neighbourhoods. Since 2004 the movement has been
planning to unify its community under one brand with
its Fairtrade proposition and now it faces another
marketing challenge with the acquisition of Somerfield
propelling the mutual into a £1.56 billion rebrand of its
3,178 UK outlets, (which range from pharmacies to
banks) as well as a £50 million ad relaunch in 2009.
Positioning A community food retailer – Britain’s largest farmer – A
unique family of businesses, owned by its customers
and led by principles working together to make changes
for the better.
Values Convenient, ethical, caring.
Proposition 'Good for everyone' and ‘Good with Food’.
Recent advertising John Hannah (TV) campaign voice, focusing on Best of
British and Fairtrade.
A good deal locally.
University.
FIGURE 34: Attitudes towards the Co-op brand, September 2008
Personality: ranks
extremely highly for
being ethical with a
third; otherwise seen
as tired and as boring
as …Somerfield.
Strengths: socially
responsible, ethical,
caring for animals –
none of which are
apparently priorities
for customers.
Weaknesses:
Value,
distinctiveness,
innovation, quality –
all the things that
customers are
concerned about.
● Note: All the remaining co-operative groups trade under a Co-op name. The
largest member of the movement (with approaching two thirds of sales) is the Co-
operative.
● The co-operative movement has pulled out of superstore retailing and its
strongest businesses are non-retail – funerals, financial services and travel. As a
retailer it now concentrates on small stores, complementary to the superstores
rather than being in direct competition with them.
● Satisfaction is low and so is loyalty, but that is to be expected in a top-up
shop. Its decision to focus on ethical matters is questionable since that is not
something that influences much where consumers decide to shop.
● It has been widely seen as a business in decline, though in fact recent results
have not been too bad and results compared to last year here show +24%
respondents experiencing the brand.
● It has grown by acquiring businesses – most recently when the Co-operative
Group bought Somerfield, whose image is even worse than that of the Co-op itself.
But the acquisition could be fortuitous in improving accessibility as the biggest
convenience retailer chain in the UK with rebranding in 2009 to further air its high
campaign production values.
ALDI
University.
Background Founded in post-war Germany, where it has a dominant,
if not market leading position. 360 stores in the UK. Aldi
is an international leader in grocery retailing. Limited
assortment discounter – a small range of fast moving
lines sold at very competitive prices, passing on
‘unbeatable prices’ and quality good enough to attract a
wide range of customers.
Positioning Aldi’s buying power means it can offer an honest,
straightforward deal: buying at better rates, reducing
costs by cutting out gimmicks. Discount prices.
Values Price, price, price, quality and price.
Proposition Aldi – Spend a little, live a lot.
Recent advertising “This month’s super 6 campaign” – fruit & veg, or deli
meats.
Link-up with celebrity chef Phil Vickery to endorse
credentials of premium ranges.

FIGURE 35: Attitudes towards the Aldi brand, September 2008
Personality: the
most tacky,
unappealing, lacking
accessibility,
reliability, and
friendliness.
Strengths:
excellent value,
value, value and
value (although just
short of Lidl). Good
momentum ahead of
the premium players
and Morrisons.
Weaknesses : lacks
some familiarity –
nearly two-fifths
have never heard of
Aldi and nearly three-
quarters have never
experienced it.
● Aldi is about selling good quality products at the lowest possible price. To do
this it cuts all costs as low as possible and the result is an unpleasant shopping
experience.
University.
● But Aldi attracts customers because it offers excellent value. And that
combination of value and a poor experience is what comes out in the ratings, despite
its respectable advertising.
● Aldi ought to be rated more highly for the excitement of its regular non-food
promotions. That may account for it not being seen as boring, but more exposure
would help build more relevance.
● Aldi ought to perform well in a recession, but it has already met with a
vigorous response from Tesco, promoting itself as the country’s biggest discounter.
BRAND QUALITIES OF FOOD RETAILERS

Tesco dominates, Asda and Sainsbury strong runners up; M&S a powerful
niche player
FIGURE 36: Personalities of various food retailing brands, September
2008
Base: all internet users aged 16+ who have heard of the brand and
expressed an opinion
Tesc Sain Asda Morr Co- Som Aldi Wait Lidl M&S Avg
o sbur ison op erfie rose
y’s s ld
Base: 901 840 858 784 757 684 691 647 721 827
% % % % % % % % % % %
Accessible 66 47 48 40 29 22 26 20 29 31 36
Boring 8 9 10 11 22 22 11 10 13 8 12
Disappointi 9 6 9 10 12 16 11 5 10 5 9
ng
Engaging 10 11 10 9 5 3 5 8 5 11 8
Ethical 10 13 8 9 31 3 5 15 4 18 12
Friendly 28 26 28 24 17 12 11 15 9 18 19
Fun 10 8 15 8 4 2 7 4 7 7 7
Impersonal 15 8 10 9 8 11 13 10 15 9 11
Inspiring 6 9 7 6 5 3 4 9 4 14 7
Only cares 34 19 18 15 10 14 11 18 11 20 17
about
profits
Over-rated 16 17 10 10 7 8 5 20 7 25 13
Reliable 52 48 42 39 25 18 17 29 16 47 33
Responsive 17 16 14 12 10 5 5 12 7 15 11
Special 6 8 6 6 5 2 4 17 3 24 8
Tacky 6 2 11 8 6 10 24 3 26 3 10
Tired 6 6 6 7 17 18 6 5 7 5 8
Unappealin 8 6 10 9 17 21 26 10 23 6 13
g
Vibrant 11 10 10 8 3 2 4 6 4 10 7
SOURCE: GMI/Mintel
● M&S stands out for being special, reliable and inspiring. But it is also
University.
overrated. Overall this is a shop people would like to use – it is aspirational, but it is
hardly surprising that its sales are so weak at the moment.
● Waitrose’s sales performance is better and its profile is similar to M&S’ – not
as special, not as over-rated.
● The Somerfield profile is similar to that of the Co-op, apart from the ethical
bias, but in most cases it underperforms – more boring, more disappointing and
even less reliable.
EXPERIENCE OF FOOD RETAIL BRANDS

Tesco dominant, M&S is the strongest for occasional visits
FIGURE 37: Consumer usage of various food retail brands, September
2008
Base: 1,000 Internet users aged 16+
● Results for ‘ever used’ have increased by 17% overall since 2007, but winners
are particularly Sainsbury’s, The Co-operative, Aldi and Lidl, at the expense of M&S.
● Stores geared to primary shoppers have the higher frequency of visitors, but
M&S stands out for its occasional use. M&S is primarily a special occasion shop for
many.
● The hard discounters stand out for being rarely used, but they are picking up
market share.
BRAND INTENTIONS FOR FOOD RETAIL BRANDS

Tesco has nowhere left to go, Waitrose excites most interest
University.
FIGURE 38: Consumer usage of various food retail brands, September
2008
Base: 1,000 Internet users aged 16+
● Tesco seems to have gone almost as far as it is possible to go.

● Waitrose and M&S attract the most negative feelings, but Waitrose appears to
have the most potential in terms of people who would be prepared to give it a try.
But as Waitrose is a long way from being fully national, this is hardly surprising.
● Aldi and Lidl are also not widely used, but there is a considerable willingness
to try them.
BRAND MOMENTUM FOR FOOD RETAIL BRANDS

M&S losing ground
University.
FIGURE 39: Momentum of various food retail brands, September 2008
● In spite of its dominance, Tesco has the strongest momentum.

● In general the price led retailers – Tesco, Asda and the hard discounters are
leading the field.
● M&S is seen to be losing ground – correctly in view of the recent trading
statements and that is probably why it is ranked in this way.
● The Co-op and Somerfield stand out for losing next most ground.
BRAND MOTIVATION FOR FOOD RETAIL BRANDS

M&S ranks highest for its café
University.
FIGURE 40:
Motivation for choosing various food retail brands,
September 2008
● The big four are as likely to be used by secondary shoppers as primary.

● All the others are for secondary shopping visits – top up buying or in the case
of Aldi and Lidl, selective purchasing.
● M&S stands out for the attraction of its in-store café.
BRAND SATISFACTION FOR FOOD RETAIL BRANDS

M&S and Waitrose the most satisfying
University.
FIGURE 41: Satisfaction with various food retail brands, September 2008
Base: all internet users aged 16+ who have ever used the brand and
expressed an opinion
● The discounters are gaining market share, but their satisfaction rating is very
low. But that is inevitable given their chosen retail format.
● Shopping at Waitrose and M&S is clearly more pleasurable than anywhere
else, but that probably stems from the fact that it is also still more aspirational.
However both have suffered loss of excellence since last year to the tune of about
17-20%
● The figures suggest that the Co-op and Somerfield could improve their
performance if they gave more attention to customer satisfaction.
BRAND COMMITMENT TO FOOD RETAILER BRANDS

Tesco and Asda have the strongest core of loyal shoppers
FIGURE 42: Commitment to various food retail brands, September 2008
Base: all internet users aged 16+ who have ever used the brand
Commitment Tes Sain Asd Mor Co- So Aldi Wai Lidl M& Av
co sbur a riso op mer tros S g
y’s ns fiel e
d
Base: 956 898 894 785 756 642 584 472 624 810
% % % % % % % % % % %
Only brand I will visit 15 9 11 8 3 2 3 5 4 8 7

Unlikely to visit again 7 9 6 7 10 13 11 10 9 7 9
Worth paying a bit 6 16 5 5 5 3 3 28 2 42 11
extra for
Always first choice 24 14 15 12 3 2 3 6 3 5 9
University.
Would recommend 35 28 28 22 12 8 18 22 19 28 22
Strong affection 15 14 12 11 8 2 6 14 7 15 10
Like more than others 18 13 15 12 4 2 5 11 5 11 10
Like it a lot – but will 33 27 28 24 15 11 17 15 18 24 21
visit others
Not my favourite but I 24 25 25 29 34 33 28 18 30 19 27
still visit
SOURCE: GMI/Mintel
● Aldi and Lidl stand out for poor commitment, but that may be in the nature of
the limited assortment discounter.
● Consumers think that both Waitrose and M&S are worth paying up for.
● Morrisons has some way to go to catch up with Tesco, Sainsbury’s and Asda.
ROUND UP
● Given that the food retailers have to appeal to a broad range of consumers,
this is a clearly differentiated sector.
● The discounters are gaining market share, but this research gives the
impression that there is little enthusiasm.
● M&S is losing share, but brand perceptions are strong. It is well placed to
regain those losses when the economy starts to recover.
● The current mood of the consumer indicates that even the premium end of
the market has to deliver premium at better value for money than it has been to
stay relevant.
University.

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Food Retailing - UK - November 2008

We have drawn insight from an independent survey, conducted by GMI on behalf of

● The market leader, familiar to almost everyone. Achieves above average

What the consumer thinks

What the consumer thinks

What the consumer thinks

THE CO-OPERATIVE MOVEMENT

What the consumer thinks

What the consumer thinks

BRAND QUALITIES OF FOOD RETAILERS

EXPERIENCE OF FOOD RETAIL BRANDS

Base: 1,000 Internet users aged 16+

BRAND INTENTIONS FOR FOOD RETAIL BRANDS

Base: 1,000 Internet users aged 16+

● Tesco seems to have gone almost as far as it is possible to go.

BRAND MOMENTUM FOR FOOD RETAIL BRANDS

● In spite of its dominance, Tesco has the strongest momentum.

BRAND MOTIVATION FOR FOOD RETAIL BRANDS

● The big four are as likely to be used by secondary shoppers as primary.

BRAND SATISFACTION FOR FOOD RETAIL BRANDS

BRAND COMMITMENT TO FOOD RETAILER BRANDS

Only brand I will visit 15 9 11 8 3 2 3 5 4 8 7

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