Tagged 'supermarkets'

As the U.K.’s cost of living keeps rising, Asda peppers a low-price message with humor

As the cost of living in the U.K. rises and Brits become increasingly anxious about covering the cost of their weekly shop, supermarkets must work harder to keep customers loyal. According to recent research, the cost of living in the U.K. is 11 percent higher than the international average and an incredible 18 percent higher than it is in the United States. In addition, since the horsemeat scandal broke, U.K. advertisers can no longer rely solely on a “cheapest price” message. The public still wants their food to be as inexpensive as possible, but the scandal made it clear that there’s often a price to be paid when offerings appear too cheap to be true.

Low-cost supermarket Asda has previously focused on price against their competitors. In a marked departure from its usual method of communicating, the retailer is now engaging the consumer with the reality of juggling a busy household and bills in an amusing, charming and also honest way, before the lowest-price message comes along in all its glory. Asda’s new price lock initiative, which freezes the costs of essentials for a 12-week period, seems a clever tactic to prevent regular and potentially new consumers from shopping around week on week.

Austere times prompt value line from Marks & Spencer

Last August, our AnxietyIndex research in the U.K. found that concern over the cost of living was on the rise, and the second highest driver of anxiety after the state of the economy. Now, with the U.K. in a double-dip recession, it’s an even worse time to be perceived as a posh place to pick up groceries. So Marks & Spencer—seen as a destination for treats more than everyday goods—recently introduced Simply M&S, a roster of 500 “shopping list favorites” at budget prices. Advertised as “M&S quality now at prices you’ll love,” the new line may help the retailer retain some of its “squeezed middle” customers. Revamped value ranges from supermarkets including Tesco and Morrison’s are also vying for these consumers.

The move is another sign of a trend we termed Navigating the New Normal—the idea that with many economies continuing to struggle, brands will need to retool for highly cost-sensitive consumers, opening up new entry points. While competing on price can be tough for retailers like Marks & Spencer, many consumers are seeking budget options that don’t feel terribly downmarket, giving this upmarket brand some leverage in retaining customers.

U.K. supermarket Budgens sells ‘hope’ along with groceries to drive donations

One particularly sad truth of the recession is a sharp decline in charitable giving. From 2007, voluntary income among the U.K.’s top 1,000 charities has fallen by more than a fifth, according to The Charities Foundation. One major reason is a decrease in regular giving by direct debit as people struggle to justify the monthly expenditure. In response to these changing habits, JWT London teamed up with supermarket chain Budgens to pilot a new fundraising mechanism that aims to make charitable giving habitual again, by turning it into an impulse purchase.

Engraved wooden blocks branded HOPE sit on store shelves and can be scanned at the checkout along with the rest of a consumer’s shopping. A £1 donation is then automatically sent to the Alzheimer’s Society, the first charity to sign up for the initiative. The block is subsequently returned to the shelf. The aim is to target consumers when they are spending money but at the same time make the process continuous, as much a part of their everyday lives as the weekly grocery shop. The initiative is being trialed in two London stores with a view to expand if it proves successful. Here’s hoping HOPE catches on.

Photo Credit: JWT

Walmart, Safeway among retailers helping shoppers zero in on nutritional choices

Filtering through nutritional claims and package labels, and all the latest reports on what to eat and what to avoid, is an anxiety-provoking business for shoppers who want to make nutritionally savvy choices. Confusion abounds. Nutritional labels, for instance, are understood only “in part” by a majority of consumers (52 percent vs. 41 percent who understand them “mostly”), according to a recent Nielsen global survey.

Earlier this month Walmart announced plans to help customers make smarter selections with a “Great for You” label for store-brand products (and a sign for fresh-produce areas), launching this spring. Criteria for inclusion are outlined on Walmart’s website. Various other food retailers are displaying nutrition scores on store shelves, a trend we touch on in our recent report “What’s Cooking? Trends in Food.” Some have come up with their own systems: For instance, Safeway’s SimpleNutrition program evaluates products and allots up to two “benefit messages” per tag, such as “Sodium Smart” or “Low Cholesterol.” Retailers can also adopt third-party systems like Guiding Stars, which grants from zero to three stars based on a food’s nutrient density per 100 calories.

As the ranks of the health-conscious continue to grow, retailers have an opportunity to act as advisers for customers, saving them time, effort and concern that they’re making the wrong choices by pointing them directly to the better ones.

Photo Credit: walmartstores.com/nutrition

The U.K. gets a very British boost

There’s a bumper few weeks coming up for Britons, with bank holidays, the Easter break and a bonus day off for the wedding of Prince William and Kate Middleton. After a hard winter and amid a tough economic environment, this seems to have boosted not only the country’s morale but also local businesses, particularly those in the craft sector. Small businesses are aiming to cash in on the royal nuptials, producing all manner of souvenirs and commemorative merchandise, from Union Jack teapots to Will & Kate calendars and gift cards to tongue-in-cheek royal tea bag holders. And the patriotic feeling among consumers is helping us stay positive and keep purchasing!

It’s not just small businesses getting in on the act: Big British brands are emphasizing the need to indulge in a party and backing their great British products. Morrisons, a supermarket chain, has really brought this to life in its latest TV campaign, and brought the nation along with them. “We could do with a bit of fun,” says cricketing star Freddie Flintoff as he leads a group of kids to the store, where they laud U.K. products.

Let’s hope that in 12 months’ time, the London Olympics can give us another boost. Will we all be flying our flags, eating Union Jack cupcakes and getting behind our athletes? It seems Morrisons could have more than just a temporary spike if this feeling continues into 2012. So it won’t be just us smiling, but their management too.

Can Waitrose maintain premium positioning as it takes on Tesco?

waitroseWaitrose, a well-established U.K. supermarket, has recently started advertising a price promise. This may seem unremarkable—a supermarket communicating its low prices—but this isn’t any supermarket. Waitrose is a premium-positioned chain, better known for advertising its food credentials. And this isn’t just any price promise: It’s a promise to match 1,000 prices at Tesco, one of the lower-priced supermarkets in the U.K. This seems to be a reaction to shoppers trading down to cheaper rivals in the current climate. But is it a disastrous step if Waitrose wishes to maintain a premium position?

Perhaps not. They’re offering to match prices on 1,000 branded goods. This is an interesting choice. I’m immediately reassured that quality isn’t going to suffer. And if the quality is good, and prices are lower than before, I can’t think of many people who’ll grumble. This may give Waitrose customers reassurance that their supermarket offers good value, and perhaps even make consumers who previously considered Waitrose too pricey reconsider their options.

Photo Credit: http://www.waitrose.com

ConAgra produces ‘in case of hurricane’ cookbook

conagraHurricane season is fascinating in terms of human behavior—it’s amazing how much anxiety is produced. In the days before a storm is expected, Puerto Ricans hope for the best and prepare for the worst, flooding supermarkets in search of storm “necessities” like bottled water (penny pinchers just fill the bathtub and washing machines) and canned food; fist fights break out over camping gear. Eventually store shelves resemble a war zone, gas stations have no gasoline, and people wait anxiously for the weather report.

To help reduce the panic caused by the unpredictable, ConAgra has produced a cookbook with recipes that use only nonperishable products from the brand. It’s part of a promotion that awards consumers who buy three ConAgra products with a flashlight and the cookbook so they can learn how to keep the family well fed in case the hurricane hits.

Photo Credit: JWT San Juan

Heinz shores up brand equity in response to private-label threat

“It Has to be Heinz” represents the brand’s biggest umbrella campaign in five years in the U.K. The latest spot shows a range of lighthearted situations that “just have to be” (“Men just have to gather around the barbecue,” “Mum has to call at exactly the wrong time,” etc.), ending with the line “And always, it has to be Heinz.”

Like most supermarket brands, Heinz has been bruised by competition from private labels as consumers trade down and cut costs. In response, the company has hiked its global marketing spend this fiscal year by 15 percent, and CEO William Johnson recently said Heinz will continue to increase its marketing investment through April.

Heinz is coming at this recessionary challenge from a strong position: Its ketchup “consistently appears as the brand that British consumers least want to give up, followed by Heinz Beanz,” according to Marketing columnist Mark Ritson. So while many supermarket brands have been boldly asserting their value in response to the private-label threat (as we’ve noted), Heinz is doing something different: It smartly turns its ubiquity in the British kitchen into its own kind of value and implies that giving up the brand is akin to going against the natural order of things.

Still eating caviar, but buying it at a discount

It used be that most people who took advantage of vouchers, deals and discounts were living on a shoestring. Today, it’s simply a sign of a savvy shopper, whatever their income. This recession has seen the rise of the deal-seeking affluent, and brands that have not traditionally catered to an affluent audience should be doing all they can to appeal to this new breed of discount shopper. By luring in these consumers now and offering them a good experience, brands may well retain their custom beyond the recession.

One example from the U.K., which I highlight in our Balancing Health, Wellness and Budgets presentation (download in the Trends and Research page), is discount supermarket chain Aldi, which swiftly added luxury items such as whole Canadian lobster (£5.99) and premium caviar (£1.69) in response to an influx of high-income customers. One trend forecaster has labeled these shoppers “the Aldirati,” while some call them NFAs (no-frills affluents), as an article in the Times of London points out. A recent Aldi campaign hit the nail on the head with the tagline: “Don’t change your lifestyle, change your supermarket.”

Australians not frugal when it comes to ‘fresh’

While Australians are undoubtedly trying to reduce the amount they spend on groceries, they are buying more fresh fruit and vegetables—despite perceiving produce as very expensive. This represents irrational decision making when considered purely on price terms. But as I discuss in our Balancing Health, Wellness and Budgets presentation (download it in the Trends and Research page), the driver here is health, and consumers are making an emotional connection where “health” is expressed through “fresh.”

Indeed, the consumer perception of “healthy” is multifaceted, and there is an opportunity for brands to leverage these perceptions and health values. Brands able to emphasize “fresh” credentials should do so, because Australians are not currently prepared to trade down on fresh to save money. The Woolworths supermarket chain, for example, is positioned as the “Fresh Food People,” and its latest campaign carries the message “We’re the fresh food people because you are.” And Subway is continuing its “Eat Fresh” tagline as a key point of difference over other fast food options.