With the majority of retail reports in the past year showing the Big Four supermarkets losing further ground to discounters some have begun to question the future of the big box format.
Supermarkets have responded to this with high-profile marketing campaigns or dropping prices to rock bottom levels, but Waitrose boss Mark Price believes even more radical action is required to meet the needs of the modern consumer.
According to Mr Price, the upmarket supermarket’s first annual Food and Drink Report found that consumers today now have a completely different outlook on buying groceries, brought about jointly by the recession and advancements in technology.
Rather than travelling to an out of town supermarket once a week, he claims, consumers now prefer the “grab and go” method of buying food on the move, rather than planning weekly meals out in advance.
He says; “The notion that you are going to go and push a trolley around for the week is a thing of the past – it is fundamentally changing the market.
“All these trends are effectively pulling people out of big box, out of town retailing.
“That is really the challenge the Big Four are facing, they have an estate for how people shopped two decades ago.”
These claims certainly seem to be reinforced by Waitrose’s latest trading update, which shows sales of products designed for breakfast-on-the-move increased by 10 per cent in the last year.
In fact, Waitrose’s methods of adapting to a more convenience orientated consumer market in general appear to be paying off, with the supermarket brand noting a sales increase of 6.8 per cent in the 12 weeks to the 12th of October, giving the third strongest performance in the grocery sector behind discounters Aldi and Lidl.
By contrast, industry sales data from Kantar Worldpanel indicates that, during the same period, sales at Tesco fell by 3.7 per cent while Sainsbury’s sales declined by 3.1 per cent.
Again, this indicates that Mr Price’s theory is correct as both still count large out of town “hypermarkets” as the majority portion of their estates despite significant investment into the Tesco Express and Sainsbury’s Local convenience networks.
Yet Mr Price does not believe that the change in consumer behaviour is due to the failings of supermarket based retailers, but that it is a natural evolutionary process of the grocery sector. Nor does he believe that the discounters, which have largely been blamed for the Big Four’s difficulties, have overly contributed to the change in attitudes.
He continues; “People are managing their life in a much more efficient way. The days of sitting down as a family of four to eat Kelloggs Cornflakes are much less relevant.
“This is a once in 50 to 60 year change, the last big change was the supermarket in the 1950s – I think what you are seeing now is as fundamental.”
Do you agree that the Big Four have passed their sell-by dates, and if so how do you think they can adapt their business models to remain relevant to today’s consumer?
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