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The impact of inflation on today’s<br />
grocery shopper<br />
Mark Thomson<br />
TNS Worldpanel<br />
1
Only a year ago…<br />
Premium<br />
Organic<br />
Values<br />
Eating out<br />
2
And now…<br />
Value<br />
Planning ahead<br />
Stability<br />
Eating in<br />
3
Latest figures up to 28 th<br />
December 2008 show inflation<br />
back to +8.3%.<br />
4
© Worldpanel TM division of TNS 2008<br />
(X10)
How are people shopping in the current<br />
climate?<br />
6
So what has been the overall impact?<br />
Price<br />
inflation<br />
The<br />
fixture<br />
The<br />
consumer<br />
7
Some of the biggest value growers ARE price driven in<br />
Scotland.<br />
Hens Eggs<br />
Dry Pasta<br />
Butter<br />
Flour<br />
Fresh Cream<br />
Total Bread<br />
Total Milk<br />
Ambient Rice+Svry Noodles<br />
Yoghurt<br />
Canned Fish<br />
Crackers & Crispbreads<br />
Honey<br />
Cooking Oils<br />
Everyday Biscuits<br />
Chilled Cakes<br />
Fresh Poultry<br />
Total Cheese<br />
Baked Bean<br />
Margarine<br />
TNS Worldpanel – 52 W/E 10 th August 2008<br />
6.77<br />
© WorldpanelTM () - % change v 2007<br />
division of TNS 2008<br />
7.1<br />
6.1<br />
6.4<br />
8.2<br />
7.7<br />
6.7<br />
6.5<br />
9.7<br />
25<br />
24.7<br />
19.4 21.9<br />
16.8 16.9<br />
14.815.2<br />
13.1<br />
11.8<br />
10.8<br />
10.4<br />
10.1<br />
9.915.8<br />
9.8<br />
9<br />
7.8<br />
9.1 7.5<br />
7.8 5.9<br />
17.7<br />
20<br />
(X10)<br />
25<br />
29.4<br />
28.7 29.9<br />
% change in Spend (£)<br />
52 W/E 10 th August<br />
2008 v 2007<br />
% change in Price per<br />
Volume over the same<br />
period
Fresh Milk volumes flat in Scotland however….<br />
18.4 million Litres of Filtered Milk sold in<br />
Scotland over the last year (+18.1%)<br />
© WorldpanelTM TNS Worldpanel – 52 W/E 13<br />
division of TNS 2008<br />
th July 2008<br />
() - % change v 2007
Real Growth<br />
Value growth NOT driven by price in Scotland.<br />
RTS Desserts Long Life<br />
Frozen Bread<br />
Chocolate Spread<br />
Special Treats<br />
Liquid+Grnd Coffee+Beans<br />
Chilled Burgers+Grills<br />
Chilled Black+White Pudng<br />
Cider<br />
Seasonal Biscuits<br />
Chilled Dips<br />
Frozen Fish<br />
Chld Frnkfurter/Cont Ssgs<br />
Fresh/Chilled Pastry<br />
Chilled Flavoured Milk<br />
Peanut Butter<br />
Wine<br />
Fresh Pasta<br />
Herbs+Spices<br />
Healthier Biscuits<br />
-5.7<br />
-3.9<br />
-2.4<br />
-0.6<br />
-1.6<br />
2.6<br />
1.5<br />
0.8<br />
0.2<br />
0.6<br />
2.1<br />
1.8<br />
1.8<br />
3.1<br />
TNS Worldpanel – 52 W/E 10 th August 2008<br />
4.4<br />
3.6<br />
3.2<br />
5.4<br />
5.2<br />
7.7<br />
© WorldpanelTM () - % change v 2007<br />
division of TNS 2008<br />
15.2<br />
14.5<br />
13.5<br />
13.4<br />
13.2<br />
12.8<br />
12.6<br />
11.8<br />
11.3<br />
11.1<br />
23.9<br />
22.8<br />
21.1<br />
20.5<br />
20.1<br />
31.1<br />
30.9<br />
28.8<br />
(X10)<br />
% change in Spend (£)<br />
52 W/E 10 th August<br />
2008 v 2007<br />
% change in Price per<br />
Volume over the same<br />
period
So how has the fixture been impacted?<br />
Buy less<br />
categories<br />
I need to<br />
reduce spend!<br />
Trading Down<br />
Retailers<br />
© Worldpanel TM division of TNS 2008<br />
Buy on<br />
Offer<br />
Spending<br />
less Money<br />
Trade down<br />
price tiers
So what is the impact of food inflation on the grocery<br />
shopper?<br />
Buy less<br />
categories<br />
Trading Down<br />
Retailers<br />
Spending<br />
less Money<br />
Buy on<br />
Offer<br />
Trade down<br />
price tiers<br />
© Worldpanel TM division of TNS 2008<br />
No<br />
Yes<br />
Yes<br />
Yes
What else will become more relevant in<br />
© Worldpanel TM division of TNS 2008<br />
2009?
With the pressure on our wallets increasing,<br />
so too is the pressure on our waistlines.<br />
© Worldpanel TM division of TNS 2008
What do Scottish households spend more money on?<br />
1. Fresh Vegetables<br />
2. Fresh Fruit<br />
3. Wine<br />
4. Fresh Milk<br />
5. Spirits<br />
6. Cheese<br />
7. Beer & Lager<br />
8. Chilled Ready Meals<br />
9. Chocolate Confectionery<br />
10.Cooked Meats<br />
11.Bread<br />
12.Fresh Poultry<br />
13.Fresh Beef<br />
14.Breakfast Cereal<br />
15.Morning Goods<br />
TNS Worldpanel – 52 W/E 10 th August 2008<br />
© WorldpanelTM Ranked on total spend (£)<br />
division of TNS 2008<br />
1. Wine<br />
2. Spirits<br />
3. Fresh Vegetables<br />
4. Fresh Fruit<br />
5. Fresh Milk<br />
6. Chilled Ready Meals<br />
7. Chocolate Confectionery<br />
8. Beer & Lager<br />
9. Cooked Meats<br />
10.Cheese (X10)<br />
11.Bread<br />
12.Fresh Beef<br />
13.Fresh Poultry<br />
14.Morning Goods<br />
15.Breakfast Cereal
So what is the main difference to the last recession in<br />
the early 1990’s?<br />
Prevalence of obesity (BMI > 30) in UK women 1994 - 2002<br />
Tackling Obesities: Future Choices http://www.foresight.gov.uk 2007<br />
16
They say dog’s<br />
often mirror their<br />
owners!<br />
17
How can marketers manage price inflation<br />
in 2009?<br />
1. Understand your customers (Shoppers & consumers)<br />
2. Redefine value (reverse engineer products to hit key<br />
price points)<br />
3. Use promotions selectively<br />
4. Segment your offering (customers increasingly looking<br />
to cherry pick the service/product features they really<br />
need)<br />
5. Increase relevance (you need to persuade customers<br />
to cut back on other products, but not on yours)<br />
18
1/3 of Scottish households will<br />
purchase Haggis in a typical<br />
year.<br />
Domestic households in<br />
Scotland account for over<br />
1,000 tonnes of Haggis and up<br />
12% in Scotland year on year.<br />
19
Mark.thomson@tns-global.com<br />
Tel: 07943 811715<br />
20
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