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Market Assessment 2007 

Third Edition December 2007 

Edited by Emma Wiggin 

ISBN 978-1-84729-233-9 

Supermarket Services

Supermarket Services 

Foreword 

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© Key Note Ltd 2007


Contents 

Contents 

Executive Summary 1 

1. Introduction 3 

DEFINITION......................................................................................................................................3 

OBJECTIVES .....................................................................................................................................3 

METHODOLOGY.............................................................................................................................3 

Original Research ...................................................................................................................... 3 

Problems in the Research Process............................................................................................. 3 

2. Strategic Overview 5 

MARKET DYNAMICS......................................................................................................................5 

One-Stop Shopping ................................................................................................................... 5 

Which Services Remain Outside the Orbit of Supermarkets?................................................. 5 

How Much do Shoppers Spend on Services? ........................................................................... 6 

Table 1: UK Household Expenditure at 2005/2006 Prices (£ per household per week), 

1995/1996, 2000/2001 and 2005/2006 ..................................................................................... 6 

COMPETITIVE STRUCTURE............................................................................................................7 

Table 2: The Leading Supermarkets by Number of Stores in the UK, 2001 and 2006 .......... 8 

CONSUMER TRENDS ......................................................................................................................9 

FORECASTS....................................................................................................................................10 

KEY POINTS ...................................................................................................................................10 

3. Financial Services 11 

INTRODUCTION ............................................................................................................................11 

ASDA ..............................................................................................................................................11 

THE CO-OPERATIVE GROUP.......................................................................................................12 

MARKS & SPENCER ......................................................................................................................12 


Contents 


MORRISONS ..................................................................................................................................12 

SAINSBURY’S .................................................................................................................................13 

TESCO .............................................................................................................................................13 

WAITROSE .....................................................................................................................................14 

KEY POINTS ...................................................................................................................................14 

4. Restaurants and Catering 15 

INTRODUCTION ............................................................................................................................15 

ASDA ..............................................................................................................................................15 

MARKS & SPENCER ......................................................................................................................15 

MORRISONS ..................................................................................................................................16 

SAINSBURY’S .................................................................................................................................16 

TESCO .............................................................................................................................................16 

KEY POINTS ...................................................................................................................................16 

5. Telecommunications and Internet Services 19 

INTRODUCTION ............................................................................................................................19 

ASDA ..............................................................................................................................................19 

SAINSBURY’S .................................................................................................................................19 

TESCO .............................................................................................................................................19 

WAITROSE .....................................................................................................................................21 

KEY POINTS ...................................................................................................................................21 

6. Sustainability, the Environment and Recycling 23 

INTRODUCTION ............................................................................................................................23 

ASDA ..............................................................................................................................................23 


MARKS & SPENCER ......................................................................................................................24 

MORRISONS ..................................................................................................................................25 

SAINSBURY’S .................................................................................................................................25 

TESCO .............................................................................................................................................26 

ETHICAL SUPERSTORE .................................................................................................................27 

KEY POINTS ...................................................................................................................................27 



Contents 

7. Health and Pharmacies 29 

INTRODUCTION ............................................................................................................................29 

FOOD LABELLING AND INGREDIENTS......................................................................................29 

PHARMACY BOOST FROM 2001 ...............................................................................................30 

MAKING THE NATION FITTER....................................................................................................30 

KEY POINTS ...................................................................................................................................31 

8. Other Services 33 

AUTOMOTIVE ...............................................................................................................................33 

DRY CLEANING .............................................................................................................................34 

EDUCATION...................................................................................................................................34 

ENTERTAINMENT .........................................................................................................................35 

ESTATE AGENCY...........................................................................................................................35 

FUNERALS......................................................................................................................................36 

GARDENS .......................................................................................................................................36 

LEGAL SERVICES ...........................................................................................................................37 

PHOTOGRAPH PROCESSING.......................................................................................................37 

POST OFFICES................................................................................................................................37 

TRAVEL AGENCY..........................................................................................................................37 

UTILITIES ........................................................................................................................................38 

WEDDINGS ....................................................................................................................................38 

KEY POINTS ...................................................................................................................................38 

9. Home Delivery 39 

INTRODUCTION ............................................................................................................................39 

Barriers to Overcome .............................................................................................................. 39 

ASDA ..............................................................................................................................................39 


ICELAND.........................................................................................................................................40 

MARKS & SPENCER ......................................................................................................................40 

MORRISONS ..................................................................................................................................40 


Contents 


SAINSBURY’S .................................................................................................................................41 

SOMERFIELD..................................................................................................................................41 

TESCO .............................................................................................................................................41 

WAITROSE .....................................................................................................................................42 

KEY POINTS ...................................................................................................................................42 

10. Promotion 43 

THREE CHAINS SPEND MORE THAN £50M .............................................................................43 

Table 3: Main Media Advertising Expenditure by Supermarkets (£000), 

Year Ending June 2007 ..........................................................................................................43 

Marks & Spencer...................................................................................................................... 43 

Table 4: Main Media Advertising Expenditure by Marks & Spencer 

by Selected Category (£000), Year Ending June 2007 .......................................................... 44 

Tesco......................................................................................................................................... 44 

Table 5: Main Media Advertising Expenditure by Tesco 


Sainsbury’s ............................................................................................................................... 45 

Table 6: Main Media Advertising Expenditure by Sainsbury’s 


ASDA ........................................................................................................................................ 46 

Table 7: Main Media Advertising Expenditure by ASDA 


KEY POINTS ...................................................................................................................................47 

11. An International Perspective 49 

SUPERMARKET SERVICES ARE FOR THE FEW .........................................................................49 

Retailing in India and the People’s Republic of China.......................................................... 49 

COST–BENEFIT EQUATION FINELY BALANCED ......................................................................50 

KEY POINTS ...................................................................................................................................50 

12. PEST Analysis 51 

POLITICAL FACTORS ....................................................................................................................51 

The Competition Commission................................................................................................. 51 

Planning Regulations .............................................................................................................. 52 



Contents 

ECONOMIC FACTORS ..................................................................................................................52 

Table 8: UK Household Income and Expenditure 

by Gross Income Decile Group (£ and %), 2005/2006 .......................................................... 53 

Table 9: Loans Secured on Dwellings, Consumer Credit and Other Personal Sector 

Borrowing by Amounts Outstanding (£bn and index second quarter 2006=100), 

Second Quarter 2006-Second Quarter 2007 ......................................................................... 54 

SOCIAL FACTORS..........................................................................................................................55 

Table 10: The Forecast UK Population by Age (000), 2007-2017 ......................................... 56 

TECHNOLOGICAL FACTORS .......................................................................................................57 

KEY POINTS ...................................................................................................................................57 

13. Consumer Dynamics 59 

SUPERMARKETS PLEASE CUSTOMERS .....................................................................................59 

THE FINDINGS ...............................................................................................................................59 

“In the Past 6 Months I Have Not Bought Anything from a Supermarket” ........................ 59 

Table 11: Use of Supermarkets (% of respondents), 2007 ................................................... 60 

“Supermarkets Save Me Money” ........................................................................................... 62 

Table 12: Supermarkets Save Shoppers Money (% of respondents), 2007 ......................... 63 

“Supermarkets Save Me Time”............................................................................................... 65 

Table 13: Supermarkets Save Time (% of respondents), 2007 ............................................. 66 

“Supermarkets Treat their Customers Fairly”........................................................................ 68 

Table 14: Attitudes Towards Supermarkets’ Treatment of Customers 

(% of respondents), 2007 .......................................................................................................69 

“Supermarkets Treat their Suppliers Fairly”.......................................................................... 71 

Table 15: Attitudes Towards Supermarkets’ Treatment of Suppliers 


“Supermarkets Encourage Me to Spend Too Much”............................................................ 74 

Table 16: Supermarkets Encourage Overspending (% of respondents), 2007 .................... 75 

“I Would Spend More Money in my Favourite Supermarket 

if it Sold a Wider Range of Goods and Services” .................................................................. 77 

Table 17: A Wider Range of Goods and Services Would Encourage More Shopping 


“Within the Past 6 Months I Have Obtained Cashback from 

a Supermarket Checkout” ...................................................................................................... 80 

Table 18: Use of Cashback Facilities from a Supermarket 


“I Have a Credit Card Issued by a Supermarket Bank” ......................................................... 83 

Table 19: The Penetration of Supermarket Credit Cards 



Contents 


“I Have Motor Insurance from a Supermarket” .................................................................... 86 

Table 20: The Penetration of Supermarket-Branded Car Insurance 


“I Have an Internet Service Provided by a Supermarket”..................................................... 89 

Table 21: The Penetration of Internet Services Provided 

by Supermarkets (% of respondents), 2007 .......................................................................... 90 

“I Have a Mobile Phone Service Provided by a Supermarket” ............................................. 92 

Table 22: The Penetration of Supermarket Mobile Telephone Services 


“Within the Past 6 Months I Have Taken at Least One Item to be Dry Cleaned 

in a Supermarket” ................................................................................................................... 95 

Table 23: Use of Dry Cleaning Services in a Supermarket 


“Within the Past 6 Months I Have Eaten at Least One Meal in a Supermarket Café” ....... 98 

Table 24: Use of Supermarket Cafés (% of respondents), 2007 .......................................... 99 

“Within the Past 6 Months I Have had at Least One Prescription Dispensed 

from a Supermarket Pharmacy”........................................................................................... 101 

Table 25: Use of Supermarket Pharmacies (% of respondents), 2007 .............................. 102 

“Within the Past 6 Months I Have Purchased Direct from a Supermarket Website” ....... 104 

Table 26: Online Shopping with Supermarkets (% of respondents), 2007........................ 105 

KEY POINTS .................................................................................................................................107 

14. Company Profiles 109 

THE ‘BIG FOUR’...........................................................................................................................109 

Table 27: Grocery Market Shares in Great Britain (£m and %), 

12 Weeks to 4th November 2007 ........................................................................................ 109 

TESCO PLC....................................................................................................................................111 

Table 28: Financial Results for Tesco PLC (£000, number, % and £), 

Years Ending 26th February 2005, 25th February 2006 and 24th February 2007 ............ 112 

ASDA GROUP LTD ......................................................................................................................113 

Table 29: Financial Results for ASDA Group Ltd (£000, number, % and £), 

Years Ending 31st December 2003-2005 ............................................................................. 114 

J SAINSBURY PLC........................................................................................................................115 

Table 30: Financial Results for J Sainsbury PLC (£000, number, % and £), 

Years Ending 26th March 2005, 25th March 2006 and 24th March 2007 ......................... 117 

WM MORRISON SUPERMARKETS PLC....................................................................................118 

Table 31: Financial Results for Wm Morrison Supermarkets PLC (£000, number, % and £), 

Years Ending 30th January 2005, 29th January 2006 and 4th February 2007 .................. 119 

THE CO-OPERATIVE GROUP.....................................................................................................120 



Contents 

SMALLER SUPERMARKETS AND SPECIALIST MULTIPLES....................................................121 

Budgens Stores Ltd................................................................................................................ 121 

Table 32: Financial Results for Budgens Stores Ltd (£000, number, % and £), 


Iceland Foods Ltd................................................................................................................... 123 

Table 33: Financial Results for Iceland Foods Ltd (£000, number, % and £), 

Years Ending 1st April 2005, 31st March 2006 and 30th March 2007 ............................... 124 

Marks and Spencer PLC ......................................................................................................... 125 

Table 34: Financial Results for Marks and Spencer PLC (£000, number, % and £), 

Years Ending 2nd April 2005, 1st April 2006 and 31st March 2007 .................................. 126 

Somerfield Ltd ....................................................................................................................... 127 

Table 35: Financial Results for Somerfield Ltd (£000, number, % and £), 

Years Ending 29th April 2004, 30th April 2005 and 29th April 2006 ................................ 128 

Waitrose Ltd .......................................................................................................................... 129 

Table 36: Financial Results for Waitrose Ltd (£000, number, % and £), 

Years Ending 29th January 2005, 28th January 2006 and 27th January 2007 .................. 129 

DISCOUNT CHAINS.....................................................................................................................130 

Aldi Stores Ltd ....................................................................................................................... 130 

Table 37: Financial Results for Aldi Stores Ltd (£000, number, % and £), 


Lidl Ltd ................................................................................................................................... 131 

Table 38: Financial Results for Lidl Ltd (£000, number, % and £), 

Years Ending 29th February 2004 and 28th February 2005 and 2006 .............................. 132 

Netto Foodstores Ltd............................................................................................................. 133 

Table 39: Financial Results for Netto Foodstores Ltd (£000, number, % and £), 


KEY POINTS .................................................................................................................................134 

15. The Future 135 

‘THE SUPERMARKET’ IS TRANSFORMING INTO ‘THE SOURCE’.........................................135 

WHAT WILL CONSUMERS WANT?..........................................................................................135 

KEY POINTS .................................................................................................................................137 


Contents 


16. Further Sources 139 

Publications..................................................................................................................................139 

General Sources...........................................................................................................................139 

Government Sources...................................................................................................................139 

Other Sources ..............................................................................................................................140 

Bisnode Sources...........................................................................................................................141 

Key Note Research 145 

The Key Note Range of Reports 147 



Executive Summary 


The commodification of food, and consequent decline in profit margins, 

forces multiple retailers to diversify into products and services on which they 

can earn greater margins. In the past, supermarkets that ventured into 

services tended to offer ones that shoppers needed fairly often, such as dry 

cleaning and photograph processing, but the range of services has been 

expanded and, in 2007, Tesco was investigating entering the estate agency 

market, signalling a major extension of service portfolios. 

Tesco is a trading portal for a huge range of goods and services. Sainsbury’s 

challenge to Tesco has revived, although the takeover bid for Sainsbury’s 

from Delta Two was a distraction in 2007. ASDA has also developed as a 

general trading company, but is more focused than Tesco or Sainsbury’s on 

low- to middle-income shoppers who want minimal prices on basics more 

than added-value services. Morrisons still focuses on selling food and 

household goods and has not introduced a wide array of services. The Cooperative 

Group rivals Tesco in the range of services offered and is a leader 

for environmental awareness and local sourcing, attributes that are of 

increasing importance to customers. Among the smaller chains, Waitrose 

provides financial and other services, benefiting from being part of the John 

Lewis Partnership retail group. 

Convenience retailing, rather than expansion into a wide range of services, is 

the theme for Somerfield, Budgens and, increasingly, for Marks & Spencer, 

with its food-only outlets. Marks & Spencer has a financial-services brand, 

M&S Money, but this is owned by HSBC. 

Care for the environment is a brand value that an increasing proportion of 

shoppers seek, especially affluent customers. However, for companies that 

attract shoppers across the income range, it will be hard to reconcile the 

demands of green shoppers with the budgets of low-income customers. 

ASDA and Tesco both have substantial online grocery stores with home 

delivery. Sainsbury’s has ventured cautiously into online grocery retailing. 

Waitrose’s service, Ocado, is at the premium end of home deliveries. 

However, none of the chains deliver groceries nationwide. Deliveries are a 

valuable customer service, but more alternatives to home delivery, such as 

designated 24-hour pick-up points, would be helpful to customers who are 

rarely at home. 

Supermarkets’ added-value services have had a small target market in global 

terms, confined to the wealthiest nations and to elite enclaves elsewhere. 

India has a protected retail sector which is very difficult for foreign firms to 

enter, but the Chinese market is more open. International supermarket 

businesses give customers continuity of supply, consistent quality and often 

low prices, but at the same time they can encourage shoppers to overspend. 

© Key Note Ltd 2007 1



Many households could not afford to spend more in supermarkets than they 

do already, as among the 40% of households with the lowest incomes, total 

spending often exceeds income by a significant margin. In addition, 

households carry a heavy debt burden. Time pressures on workers, extending 

up the age scale as more people work on beyond usual retirement ages, 

mean that shopping needs to be fast and stress free. An ageing population 

will be reluctant to keep pace with technological advances such as cashless 

shopping, but the database technology behind ventures such as Tesco’s 

Clubcard increases Tesco’s power as a trading portal, as well as opportunities 

for cross-selling. 

Present trends include more local, one-stop and online shopping. Over 

the longer term, in response to scarce resources and the need to cut 

greenhouse-gas emissions, shoppers will focus on essentials, which they 

will want to buy locally, while they will use online shopping (often from 

supermarkets that have become general trading companies) for bulky and 

luxury items. 

Stores not in residential neighbourhoods will need to become leisure 

and entertainment destinations to which people are prepared to travel 

for a day out. 

Tesco has particularly exciting prospects because of its market dominance and 

expertise across services and formats. As at summer 2007, it appeared unlikely 

that the Competition Commission, after completing its review of the 

groceries market by May 2008, would impose any draconian restrictions on 

Tesco’s expansion. The Co-operative Group is also well placed for the future, 

because of its experience in local retailing and its track record of trading with 

high ethical and environmental standards. All national supermarket 

businesses will need flexibility to tailor formats and ranges to local needs and 

the scale to operate as general trading companies. 

2 © Key Note Ltd 2007


Introduction 

1. Introduction 

DEFINITION 

Supermarket services are diversifications from supermarkets’ core business of 

retailing food and household products. The services provided by 

supermarkets vary from cafés to home delivery, and from finance to Internet 

access. The services examined in this report are: financial; restaurants and 

catering; telecommunications and Internet provision; sustainability, the 

environment and recycling; health and pharmacies; home delivery; and other 

services, e.g. dry cleaning and utilities. 

A supermarket generally has a floor space of up to 25,000 square feet, a 

superstore has between 25,000 and 50,000 square feet and a hypermarket is 

more than 50,000 square feet in size. However, for the purposes of this 

report, Key Note uses the generic name ‘supermarket’ to refer to all three 

types of outlet. 

OBJECTIVES 

This report analyses public attitudes towards supermarkets’ services and 

considers the factors influencing the development of services and their 

further expansion. 

METHODOLOGY 

In July 2007, NEMS Market Research conducted consumer research on behalf 

of Key Note into attitudes towards and use of supermarkets and their 

services. NEMS Market Research interviewed a representative sample of 1,004 

adults aged 16 and over in Great Britain and the data form a central element 

of this report. Supporting and background information has been obtained 

from companies, national and specialist journals, trade statistics and 

government statistics. 

Original Research 

The results from the survey carried out by NEMS Market Research are new for 

this report and exclusive to Key Note. The public’s attitudes towards 

supermarkets and the services they now provide, or could provide, indicate 

which direction service provision is likely to take. 

Problems in the Research Process 

Supermarkets are naturally reluctant to talk about their strategic plans, in 

case they lose a competitive edge. This is the main difficulty affecting 

research into their plans for services. 


Introduction 




Strategic Overview 

2. Strategic Overview 

MARKET DYNAMICS 

One-Stop Shopping 

Supermarkets have to keep finding new ways of staying ahead of the 

competition. Cashback, fuel, savings accounts, restaurants, pharmacies and 

many other activities have all become common adjuncts to food and 

household product sales. 

Supermarkets have grown at the expense of specialist food shops (e.g. 

grocers, greengrocers, dairies, butchers and fishmongers) by offering wider 

product ranges and lower prices under one roof. However, times are 

changing and supermarkets’ specialties of packaged processed foods are 

receiving growing criticism from environmentalists, dieticians and the public. 

Their concerns include the cost and disposal of packaging materials, the 

nutritional value of heavily processed foods, the environmental impact of 

long supply chains and the out-of-town location of many outlets, which can 

mean shoppers have to travel considerable distances to them. 

Many consumers now want to know exactly where their food originated and 

how it has been produced. Food has become a political issue, and brand 

power is moving away from companies such as Nestlé and Unilever and 

towards designations such as ‘ethical’, ‘origin’, ‘organic’, ‘Fairtrade’ and 

‘conservation’, and towards geographical descriptors such as ‘Aberdeen 

Angus’, ‘Welsh’, ‘Devon’ and ‘Jersey’. Small shops specialising in quality foods 

from identified suppliers are increasingly popular, especially with affluent 

consumers. These are often the foods that attract good margins. There is no 

profit for supermarkets if all their customers seek are commodity foodstuffs 

on which margins are thin or negative — they have to diversify into other 

areas in the retail industry. 

Which Services Remain Outside the Orbit of Supermarkets? 

Supermarket ‘law shops’ have not yet emerged in the UK, although the 

Co-operative Group has launched a legal helpline. Supermarkets have not 

embraced automobile sales in a major way or sales of secondhand goods 

(if they moved into the latter area, it is likely that thousands of charity shops 

would suffer). At present, supermarkets are less interested in services that 

consumers use occasionally, such as car and appliance repairs, furniture 

removal and pet grooming; instead, they focus on frequently needed services 

to increase customer visits to their stores. 




How Much do Shoppers Spend on Services? 

According to the National Statistics publication Family Spending 2006, 

between 1995/1996 and 2005/2006, the fastest-growing category of 

household expenditure (at 2005/2006 prices) was leisure services, rising by 

52.9%, followed by 40.5% for fares and travel costs and 39% for household 

services. (Spending on leisure services includes holidays, gambling, sports, 

music, entertainment, Internet and cable services and photography.) The 

average household spent £63 a week on leisure services in 2005/2006, £27.10 

on household services and £16.90 on personal goods and services. Overall, 

expenditure on services rose faster than that on goods, while spending on 

food and non-alcoholic drink (staples for supermarkets) fell by 0.3%. 

Table 1: UK Household Expenditure at 2005/2006 Prices 

(£ per household per week), 1995/1996, 2000/2001 

and 2005/2006 

% Change 

1995/ 2000/ 2005/ 1995/1996- 

1996 2001 2006 2005/2006 

Housing (net) 62.10 72.10 80.90 30.3 

Food and 

non-alcoholic drinks 68.10 69.80 67.90 -0.3 

Motoring 47.60 62.10 63.80 34.0 

Leisure services 41.20 57.10 63.00 52.9 

Household goods 30.20 36.80 33.50 10.9 

Household services 19.50 24.80 27.10 39.0 

Clothing 

and footwear 22.10 24.80 22.40 1.4 

Leisure goods 17.70 22.30 19.40 9.6 

Personal goods 

and services 14.90 16.60 16.90 13.4 

Alcoholic drink 14.70 16.90 14.80 0.7 

Fuel and power 16.60 13.40 13.90 -16.3 

Table continues... 




Table 1: UK Household Expenditure at 2005/2006 Prices 

(£ per household per week), 1995/1996, 2000/2001 

and 2005/2006 

...table continued 

% Change 

1995/ 2000/ 2005/ 1995/1996- 

1996 2001 2006 2005/2006 

Fares and 

other travel costs 7.90 10.70 11.10 40.5 

Tobacco 7.50 6.80 4.50 -40.0 

Miscellaneous 3.10 0.80 2.20 -29.0 

Total 373.10 434.90 441.40 18.3 

Note: totals may not sum due to rounding. 

Source: Family Spending 2006 (Table 4.1), National Statistics © Crown 

copyright material is reproduced with the permission of the Controller 

of HMSO (and the Queen’s Printer for Scotland)/Key Note 

COMPETITIVE STRUCTURE 

On 9th May 2006, the Office of Fair Trading (OFT) referred grocery retailers to 

the Competition Commission to consider whether ‘any feature, or 

combination of features, of each relevant market prevents, restricts or 

distorts competition in connection with the supply or acquisition of any 

goods or services in the UK or part of the UK’. The Commission’s starting view 

is that: 

“... in a competitive market, commercial success should 

not be penalized unless there is clear evidence of an 

abuse of market power and harm to consumers. We 

also do not necessarily attach particular significance, 

in the context of competition between retailers, to the 

national share of any one grocery retailer, although 

we have not come to a final view on the relevant 

geographic market and we do see national shares 

as relevant to the assessment of buyer power.” 1 

The underlying assumption seems to be that concentration of market 

power is beneficial all the time that consumers have access to low-cost 

food, up to the point at which one retailer is so dominant that it can 

shut out competition. 

1. ‘Emergent Thinking on the Grocery Market’, Competition Commission, 23rd January 

2007, paragraph 29. 




The investigation is confined to food for consumption outside the store, 

drinks, pet food, cleaning products, toiletries and household goods. Other 

categories of goods and services, including financial services, are expressly 

excluded. 

In a preliminary analysis released in January 2007, the Commission reported 

that between 2000 and 2006, grocery sales in the UK increased by almost 

17% in real terms to £123.5bn and that the real price of food fell by nearly 

7%. Sales through supermarkets rose by 26%, compared with 19% for 

convenience stores, but sales from independent shops increased by just 1%. 

Between 2001 and 2006, the total number of stores of the ‘big four’ (Tesco, 

ASDA, Sainsbury’s and Morrisons) increased by 126.1%, from 1,472 to 3,328. 

However, the total number of supermarkets fell by 2%, convenience stores 

were 8% down and specialist independent stores declined by 7%. 

Table 2: The Leading Supermarkets by Number of Stores 

in the UK, 2001 and 2006 

% Change 

2001 2006 2001-2006 

Tesco 685 1,898 177.1 

Somerfield 1,323 1,424 7.6 

Sainsbury’s 436 752 72.5 

Iceland 764 695 -9.0 

Marks & Spencer 303 408 34.7 

Morrisons 110 373 239.1 

ASDA 241 305 26.6 

Waitrose 136 173 27.2 

Source: ‘Emergent Thinking on the Grocery Market’ (Table 3), Competition 

Commission, 23rd January 2007 

In 2006, Tesco’s numerical dominance, helped by its purchase of T&S Stores, 

was striking. Morrisons expanded at a faster rate than the other multiples 

between 2001 and 2006, due to its acquisition of Safeway and keeping 

around half the stores. (In 2001, Safeway had operated 525 supermarkets.) 

Somerfield is second to Tesco on the basis of store numbers, but has smaller 

stores than Tesco as it operates convenience formats. Sainsbury’s opened 

new stores at a faster rate than ASDA, partly as a result of buying 

convenience-store chain Jacksons. The ‘big four’ supermarket chains 

operated 1,306 convenience stores between them in 2006, compared with 

just 54 in 2000. 




Concentration within the supermarket sector has limited individuals’ choice 

of outlets within easy travelling distance, although in Key Note’s consumer 

research, respondents were, overall, happy with the service provided by the 

supermarkets they used. According to the Competition Commission, only 

35% of the UK’s urban population have three or more different grocery 

outlets larger than 1,400 square metres (around 15,000 square feet) within 

a 10-minute drive, although 80% have such a choice within a 15-minute drive. 

In rural areas, less than 5% of people have three grocery stores within a 

10-minute drive, rising to 24% within 15 minutes. 

CONSUMER TRENDS 

In Key Note’s consumer research, conducted by NEMS Market Research in July 

2007, only 6.7% of those surveyed had not shopped in a supermarket in the 

6 months before they were interviewed. The majority of respondents were 

complimentary about supermarkets — 78.6% said that supermarkets saved 

them money and 76.1% agreed that supermarkets saved them time. 82.4% 

felt that supermarkets treated them fairly, although those in social grade A 

were more sceptical than the other groups. On the other hand, only 30.8% 

accepted that supermarkets treated suppliers fairly. 

62% of respondents reported that supermarkets encouraged them to 

overspend, but 40.4% would actually increase their spending in their 

favourite supermarket if it provided a wider range of goods and services. 

49.1% of those surveyed had obtained cashback from a supermarket 

checkout in the past 6 months and 10.2% had a supermarket-issued credit 

card. Supermarket motor insurance, held by 4.9% of respondents overall, was 

more popular with the under-25s. The data show that financial services 

provided by supermarkets have expanded from a niche into the mainstream. 

Internet service provision from supermarkets appeared to lack prestige. Only 

1.8% of those in social grade A admitted to having a supermarket Internet 

service provider (ISP), compared with 6.3% overall. Supermarket mobile 

telephone services are also a small niche, although teenagers, in particular, 

appeared to be willing to use a supermarket network — 9.2% of 16 to 19 

year-olds in the sample used a supermarket-branded mobile telephone 

service. Supermarket cafés, like mobile telephone services, were relatively 

popular with respondents aged 16 to 19. 

Online supermarket shopping has made headway with the under-45s and 

those in social grades A and B, but older respondents and the lower social 

grades were some distance behind, a possible reason being lack of access to, 

and familiarity with, computers in general and the Internet in particular. 

In Key Note’s research, supermarket services appeared to have strong appeal 

among young people, especially the under-20s, who, as they age, may 

continue to buy a wide range of services from the providers of their groceries 

and household products. Older respondents and those in the higher social 

grades appeared to regard supermarkets’ services as somewhat lacking in 

status. Online shopping is different, in that although this was most popular 

among those in social grades A and B, their core purchases would tend to be 

groceries and other traditional supermarket products. 




FORECASTS 

Tesco’s market position in groceries has become so dominant that major 

future expansion within the UK needs to be mainly in other product 

categories and in services. 

Only Tesco, ASDA, Sainsbury’s and Morrisons, plus the Co-operative Group 

and Waitrose, have developed a wide range of services ancillary and 

complementary to traditional food and household-product retailing, and this 

situation is set to continue. Discount chains such as Aldi and Lidl are focused 

on low prices for limited ranges. An increasing number of convenience and 

forecourt stores have been acquired by mainstream supermarket retailers and 

so have become formats within larger brands. 

In Key Note’s consumer research, shoppers valued low cost, a wide range of 

goods and services and speed of purchasing. The major multiples can provide 

these attributes and links to service providers to a greater extent than small 

chains and independents. 

KEY POINTS 

• The commodification of food, and consequent decline in profit margins, 

forces multiple retailers to diversify into products and services on which 

margins are higher. 

• In the past, supermarkets have focused on services that shoppers 

need fairly often, such as dry cleaning and photograph processing, but 

in 2007, Tesco was investigating entering the estate agency market, 

signalling a major expansion of service portfolios. 

• In 2005/2006, UK households spent almost as much on leisure services and 

motoring per week as on food and non-alcoholic drinks. 

• The Competition Commission will report on the UK grocery market before 

8th May 2008, but at the time this report was published (December 2007), 

was not expected to impose severe restrictions on the further expansion of 

leading multiples. 

• Combined, ASDA, Morrisons, Sainsbury’s and Tesco had more than twice 

as many stores in 2006 as in 2001; indeed, Tesco nearly trebled its number 

of stores. 

• In Key Note’s consumer research, more than three-quarters of respondents 

felt that supermarkets treated them fairly, although they were critical of 

supermarkets’ behaviour towards suppliers. Services provided by 

supermarkets were particularly popular with the under-20s; older 

respondents and the higher social grades showed less enthusiasm. 

• Tesco, ASDA, Sainsbury’s and Morrisons, the Co-operative Group and 

Waitrose have developed the most extensive service ranges, beyond 

traditional supermarket products. 



Financial Services 

3. Financial Services 

INTRODUCTION 

This chapter examines selected examples to illustrate the range of financial 

services offered by the leading supermarket multiples. 

The most widespread of supermarkets’ financial services is cashback, i.e. cash 

withdrawal, for customers who pay with a debit card linked to their bank 

account. Tesco and Sainsbury’s have gone the furthest with their financial 

services, with Tesco Personal Finance in conjunction with Royal Bank of 

Scotland (RBS) and Sainsbury’s Bank with HBOS. The Co-operative Group 

has a well-established separate financial-services arm covering the 

Co-operative Bank and Co-operative Insurance Services. ASDA started late in 

consumer finance, but has expanded rapidly. The financial products offered 

by supermarkets are mainly straightforward with little risk of future 

accusations of mis-selling. 

The major benefit supermarkets obtain from financial services is a greater 

share of consumer spending and with it more possibilities for cross-selling. 

The product suppliers benefit from additional distribution outlets and 

promotional exposure. In Key Note’s consumer research, 10.2% of 

respondents had a supermarket-branded credit card, indicating that 

public confidence in supermarkets’ financial services is fairly high. 4.9% 

had motor insurance purchased from a supermarket, somewhat behind 

credit cards but still a significant number. However, the possession of 

supermarket-branded motor insurance and credit cards was a long way 

behind cashback — 49.1% of respondents had received cashback at least 

once in the preceding 6 months. 

ASDA 

ASDA has expanded its financial-services arm rapidly since the launch of its 

general insurance products in March 2003. Many of the insurance products 

offered are from Norwich Union (owned by Aviva), which agreed a 5-year 

contract with ASDA in 2005. Through Norwich Union, BDML Connect Ltd 

provides car, van and home insurance and Allianz Insurance PLC provides 

pet insurance. ASDA also offers breakdown cover from RAC (also part of 

Aviva) and legal expenses cover from RAC Insurance. 

Home emergency assistance cover is from AXA company Inter Partner 

Assistance. Ultimate Insurance Solutions, part of the BDML group, handles the 

claims for several ASDA insurance products. A former member of BDML 

(BDML Connect) was acquired by The Capita Group PLC in 2005, and acts as a 

broker for ASDA’s general insurance customers who do not meet Norwich 

Union’s criteria. 




Over-50s life cover is supplied by engage Mutual Assurance (a trading name 

of Homeowners Friendly Society Ltd); other life policies are accessed through 

intermediary LifeSearch. GE Consumer Credit Services provides credit cards, 

while The Funding Corporation, part of the IM Group Ltd, is the source for 

homeowner loans. Other suppliers include LifeSearch for mortgage life 

insurance, engage Mutual Fund for a Child Trust Fund and Bradford & Bingley 

for Internet savings. 

THE CO-OPERATIVE GROUP 

Co-operative Financial Services (the Co-operative Bank and Co-operative 

Insurance Services) has maintained a strong ethical brand, but trading in 

2006 was a challenge. Operating profit fell from £175.9m in the 53-week 

period ending 14th January 2006 to £134.7m in the 52-week period to 

13th January 2007 and was below target, due to more bad debts, lower levels 

of new consumer credit and exiting from unprofitable insurance business. 

Within Financial Services, general insurance returned a £37m operating 

profit, just £400,000 lower than in 2005. Banking achieved a £76.3m 

operating profit, a considerable £21.5m fall from 2005. In July 2007, heavy job 

cuts of 1,000 posts, around 10% of the workforce, were announced. At the 

same time, measures to provide direct online sales of insurance products, 

to increase the number of regional centres for corporate banking and to 

encourage loyalty with incentives for long-term individual customers 

were started. 

MARKS & SPENCER 

The Marks & Spencer charge card was the foundation of the company’s 

financial-services business M&S Money, which in November 2004 was sold to 

HSBC. Marks & Spencer continues to distribute M&S Money products, many of 

them from HSBC, although travel and pet insurance are from AXA, wedding 

cover is from Ecclesiastical Insurance and home insurance is from Aviva. Motor 

insurance is from a panel of insurers accessed via BISL. The range also includes 

life policies, fixed-rate savings accounts, individual savings accounts (ISAs) and 

unit trusts. The &MORE credit card, a MasterCard, offers lower interest rates 

than the M&S charge card, which functions as a store card. 

MORRISONS 

Morrisons has an alliance with HSBC to provide banking services to customers. 

In 2007, there were around 20 HSBC branches inside Morrisons stores, all in 

England. An HSBC/Morrisons credit card used to be offered, but was 

withdrawn in 2005, although HSBC continues to administer the accounts of 

existing cardholders. 




The former Safeway arm within Morrisons had joined forces with Abbey 

National (now branded as Abbey) for its finance venture, which began with a 

straightforward savings account and extended to include a cash mini ISA and 

a maxi ISA. By August 2007, however, Abbey had just two branches in 

Morrisons’ stores, at Bridport in Dorset and Liskeard in Cornwall. 

SAINSBURY’S 

Sainsbury’s Bank began as a joint venture with Bank of Scotland, which 

merged with the Halifax to form HBOS in 2001. Sainsbury’s had 55% of the 

equity and HBOS 45% until February 2007, when Sainsbury’s sold 5% to 

HBOS, thus making the Bank a 50:50 business. According to J Sainsbury PLC’s 

Annual Report and Financial Statements 2007, Sainsbury’s Bank made an 

operating profit of £2m on sales of £291m in the year ending 24th March 

2007, a difficult 12-month period for consumer credit. The Bank provides a 

limited product range: car, home, travel, pet and life insurance; personal 

loans; credit cards; savings accounts; a Child Trust Fund; and a car purchase 

scheme. There are no mortgages or investments, but subprime personal loans 

are offered via Freedom Finance. By 2007, the product range was looking 

narrow and rather downmarket, out of kilter with the ‘premium’ message 

coming from the supermarket business. 

TESCO 

In June 2000, Tesco became the first major chain to offer £100 cashback, 

which it trialled in five stores. Cashback is now offered by all major 

supermarkets when customers pay by debit card. Supermarkets do not make 

a charge for this service, which saves customers from using an automated 

teller machine (ATM) or visiting their bank branch. 

Tesco’s financial services (Tesco Personal Finance) were launched in 1997 as a 

joint venture with RBS. In 2007, the financial products were mainly from RBS 

and AXA in an affiliate marketing programme managed since 2001 by 

Silvertap. The financial offer concentrates on insurance, savings, mortgages, 

travel and other loans. Silvertap believes Tesco Personal Finance to be among 

the UK’s fastest-growing financial businesses. AXA PPP provides Tesco’s health 

and dental insurance. Motor, home, pet and travel insurance is from UK 

Insurance Ltd, which is part of RBS. Direct Line, also owned by RBS, supplies 

life insurance. Personal loans, credit cards and savings are also from RBS. The 

mortgage range comes from no-fee mortgage broker London & Country, 

which, in November 2007, was promoting long-term fixed-rate mortgages, 

offering a fixed-rate mortgage at 5.99% for up to 30 years. 

In the year ending 24th February 2007, Tesco Personal Finance made a 

post-tax profit of £130m, shared equally between Tesco and RBS. This was a 

sound performance in the light of interest-rate rises restricting the market for 

new credit, and fierce competition in motor insurance. By 26th February 2007, 

Tesco remained determined to continue the expansion of Tesco Personal 

Finance, which by this time was making half of all sales online. 




WAITROSE 

Waitrose shoppers can apply for the Partnership credit card, a MasterCard, 

which gives points to spend anywhere within the John Lewis business. In 

addition, AXA provides a range of insurance policies through John Lewis’s 

Greenbee service — insurance for the home, travel and weddings and special 

events. Greenbee also offers life insurance from Friends Provident. 

KEY POINTS 

• In Key Note’s consumer research, almost half of those surveyed had 

obtained cashback from a supermarket at least once in the preceding 

6 months, one in 20 had motor insurance from a supermarket and one in 

ten had a supermarket-branded credit card. 

• ASDA was a late starter in financial services, but has expanded rapidly, 

working with, among others, Norwich Union and AXA. Marks & Spencer, an 

early starter in financial services, sold M&S Money to HSBC in 2004, but 

continues as the distributor. 

• Morrisons also works with HSBC, which has branches inside some stores. 

The former Safeway arm within Morrisons included Abbey National 

branches, two of which remain in 2007 (branded as Abbey). Waitrose is an 

access network for financial services from John Lewis Partnership, which 

offer products from providers including AXA and Friends Provident. 

• Supermarkets within the Co-operative Group are additional distribution 

channels for Co-operative Financial Services, which enjoys a high reputation 

for ethical practices, but had a challenging year in 2006. 

• Sainsbury’s Bank, only marginally profitable in 2006/2007, lacks the 

premium brand value that the main supermarket seeks to convey. Tesco 

Personal Finance performed well despite difficult trading conditions and in 

2007 was marked for continued expansion. 



Restaurants and Catering 

4. Restaurants and Catering 

INTRODUCTION 

Supermarket cafés in the UK date from the 1960s, but they were not 

common until the rise of the out-of-town superstore in the 1980s. Most 

in-store cafés are open during the store’s core opening hours and offer 

snacks and full meals at reasonable prices. The concept of a branded in-store 

catering concession is gaining ground in the UK; for example, Sainsbury’s 

has introduced Starbucks coffee shops. Supermarket cafés are popular: 

in Key Note’s consumer research, 28.5% of respondents had eaten a meal 

in a supermarket café in the previous 6 months, rising to 41.4% of 16 to 19 

year-olds. 

ASDA 

ASDA was a pioneer of complete hot meals to take away, as it was with 

pharmacies. The company campaigned for stores near motorways to be 

designated as tourist destinations so that they qualified for brown signboards 

to alert drivers to take the next exit (many of ASDA’s stores are within 3 

minutes’ drive of a motorway junction or major trunk route). However, ASDA 

now uses AA signage in preference to brown signs. 


Marks & Spencer sees major opportunities in catering. Its in-store 

Café Revive outlets were in 217 stores in spring 2007, making it the UK’s 

third-largest coffee-shop chain, and is on course to open a further 40 by the 

end of the year. More extensive menus are being introduced and more food 

for children. Takeaways are also expanding, with Hot Food to Go counters in 

15 Marks & Spencer stores as at 31st March 2007, expanding to 21 more 

during 2007/2008. The restaurant portfolio included: one M&S Kitchen 

licensed eat-in or takeaway café; four licensed Deli Bars; and an M&S 

Restaurant in Newcastle-upon-Tyne, seating 130 people with waiter service 

and selling popular Marks & Spencer dishes. Four more M&S Restaurants 

should open in 2007/2008. The Simply Food outlets (located at BP Connect 

forecourts, motorway service stations, railway stations and airports) sell 

sandwiches, rolls and other snacks and are highly visible promotional portals 

for Marks & Spencer food. The links between food sales from Marks & 

Spencer stores and the catering outlets are particularly strong, because the 

brand is constant across all operations. 




MORRISONS 

For Morrisons, the foods prepared in-store are important sales propositions, 

while the cafés inside its supermarkets are more of a supplementary service 

for customers. Morrisons prepares more than 2,200 food products in its stores, 

and at least 850 are in each store. The products include sandwiches, salads, 

pizza toppings, bread and cakes. ‘No-one else can offer so much freshly 

prepared food,’ reported Chief Executive Officer (CEO) Marc Bolland in the 

2007 Annual Report and Financial Statements. 

SAINSBURY’S 

As at 24th March 2007, Sainsbury’s had cafés in 232 stores; in a small number 

of stores without cafés, there are Starbucks coffee shop concessions instead. 

The catering side of Sainsbury’s provides gentle promotion for the food sales, 

as well as making the task of shopping more enjoyable for busy customers 

and enabling them to both shop and eat in their lunch hour, for example. 

TESCO 

As at the start of September 2007, Tesco had 358 in-store cafés. The 

space could often generate more revenue if it were devoted to racks 

of high-margin products, but customers value the amenity. 

KEY POINTS 

• The economics of in-store cafés can be dubious, but they add to the appeal 

of supermarkets as leisure destinations. 

• For stores that have small car parks, cafés can reduce the flow of shoppers 

into the store. A couple may spend £10 on a meal and sit for 45 minutes, 

but they may spend £100 in 30 minutes buying groceries. 

• Planners are opposed to siting new stores on large greenfield sites outside 

urban areas with ample parking. They prefer mid-sized stores within urban 

areas. Cafés are a service that space-poor stores will often be forced to do 

without in future, because of customers’ low spend per minute in cafés 

compared with their spending rate while shopping. 

• The concept of in-store cafés as tasting arenas for the retail product range, 

as adopted by Marks & Spencer, makes sense when the products are high 

quality, distinctive and carry good margins. 

• ASDA is among the pioneers for the provision of takeaway meals 

in supermarkets, while Morrisons makes a major selling point of its 

freshly prepared ready-to-eat foods. 




• Sainsbury’s is linking with Starbucks for in-store coffee shops. The brands 

share ethical responsibility values. 

• Tesco’s in-store cafés are an amenity to make shopping more enjoyable. 

• Catering has a higher profile at Marks & Spencer than in other major 

multiples in the UK. Coffee shops and other formats, including Simply Food 

outlets are tasting arenas for Marks & Spencer’s own-label foods. 

• Cafés generally justify their floor space only in large stores, unless they are 

promotional areas for a retailer’s distinctive, high-margin foods. 






Telecommunications and Internet Services 

5. Telecommunications and 

Internet Services 

INTRODUCTION 

Tesco and ASDA lead the supermarkets in the provision of 

telecommunications services. Waitrose and Sainsbury’s have ventured into 

communications, but not to the same extent. Waitrose is an Internet service 

provider (ISP) and Sainsbury’s sells mobile and landline services. Most people 

do not look to supermarkets for communications services: in Key Note’s 

consumer research, only 6.3% of respondents used a supermarket ISP, falling 

to just 1.8% of those in social grade A. 3.8% used a supermarket mobile 

telephone service, rising to 9.2% of 16 to 19 year-olds. 

ASDA 

ASDA offers the ASDA mobile pay-as-you-go (PAYG) network. ASDA mobile, a 

partnership with Vodafone, was launched in May 2007. In November 2007, it 

offered a price of 16 pence a minute for the first 3 minutes daily, then 8 pence 

per minute all day to any UK mobile network or standard fixed-line 

telephone for all calls made within the UK; and 10 pence per text for the first 

three texts a day, then 5 pence per text all day. 

SAINSBURY’S 

Sainsbury’s sells PAYG mobile telephones on a range of networks, contracts 

for O 2 and a landline service (Carphone Warehouse’s TalkTalk). Sainsbury’s is 

an agency for other providers rather than a telecommunications company in 

its own right. 

TESCO 

Tesco has major ambitions in communications. By September 2007, Tesco 

Telecoms customers had a choice of three landline call packages: Talk 1; 

Talk 2; and Talk 3. Customers can transfer their BT line rental charges to Tesco 

so that they pay a single bill. 

Charges were revised in summer 2007, with some new rates starting in August 

and others in September. The changes were promoted as price cuts, but in 

fact were a mixture of increases and reductions. The subscription charge for 

the Talk 3 package was reduced from £9.87 a month to £7, while that for 

Talk 2 was reduced from £3.87 to £2. However, the new connection charge of 

6 pence a call was higher than the previous 5 pence minimum charge, which 

was an extra cost only for calls under 1 minute 47 seconds. Similarly, until 

September, the daytime calls were charged by the second, but since then the 




charge has been levied by the minute (for example, a call of 3 minutes 40 

seconds would be charged as 4 minutes). 

Tesco’s pricing changes are not quickly understood. The changes will make 

little difference to light users, but customers who spend more than 500 

minutes a month or so on the telephone will probably notice an increase in 

their bills. 

The landline venture, which had 180,000 subscribers in May 2007, has 

been far from trouble-free, hinting at the problems of managing such a 

multi-faceted business as Tesco. In summer 2007, the Office of 

Communications (Ofcom) investigated Tesco Telecoms’ trading practices, 

ruling in August that there were operational flaws, but Tesco immediately 

took steps to overcome them. Ofcom concluded ‘… the steps taken by Tesco 

to resolve its operational problems appear to be working effectively, reducing 

the likelihood of further harm to consumers as a result’. (Ofcom bulletin on 

own-initiative investigation into Tesco Stores Ltd trading as Tesco Telecoms, 

13th August 2007.) 

A Tesco Internet telephone service is also available and to promote it, in 

summer 2007, Tesco customers were offered 1,000 Clubcard points if they 

registered with the service. 

Mobile services for the Tesco network, a partnership with O 2 , cover PAYG, 

although contract packages ranging from £15 to £50 a month are sold for 

other networks. The PAYG service offers three packages: 

• Value — in the UK only, with each call at 15 pence per minute and each text 

at 5 pence 

• Standard — calls at 20 pence a minute and texts at 10 pence (half price to 

three favourite numbers) 

• Extra — calls at 10 pence per minute and texts at 5 pence, provided the user 

tops up by at least £15 a month. 

In Key Note’s consumer research, supermarket mobile services appealed 

particularly to 16 to 19 year-olds — 9.2% used a supermarket mobile 

telephone service. 

As at November 2007, Tesco ISP customers with dial-up paid from 1 pence a 

minute with no monthly fee, £5.99 a month for unlimited daytime access (and 

4 pence per minute at other times) or £12.49 a month for anytime usage. In 

comparison, broadband packages started at £17.97 a month for a connection 

rate up to 512 kilobits per second (Kbps) with no download limit, to £24.97 a 

month for a 2 megabyte per second (Mbps) connection rate and unlimited 

downloads. 

Tesco.net is a shop window for Tesco products and services, although it also 

includes news, sport and weather from the BBC. 




WAITROSE 

Waitrose.com was launched in 1999 and made promotional agreements with 

many other companies. In 2000, Waitrose linked with WapWorld — a joint 

venture between Jingo Communications, Amicus Digital and Eleven Alps — to 

become the first major retailer in the UK to start a wireless application 

protocol (WAP) e-commerce service, initially selling flowers, wines, travel and 

special offers. The following year Waitrose’s parent company, John Lewis 

Partnership, purchased major e-retailer buy.com. 

Waitrose.com is an established ISP, and in November 2007, provided a range 

of packages at competitive rates, including anytime dial-up for £14.99 a 

month and broadband for £18.99 a month. 

KEY POINTS 

• ASDA offers mobile telephone services in collaboration with Vodafone. 

Sainsbury’s acts as an agency for providers such as O 2 and Carphone 

Warehouse, rather than extending its own brand into communications. 

Waitrose, however, has own-brand Internet service provision. 

• Tesco is more involved than any other supermarket multiple in 

communications, with its own Internet service provision, landline telephone 

and Internet telephone services, and mobile telephone services in 

conjunction with O 2 . 






Sustainability, the Environment and Recycling 

6. Sustainability, the Environment 

and Recycling 

INTRODUCTION 

The Co-operative Group, Marks & Spencer and Waitrose make environmental 

concerns particularly high profile. Sainsbury’s has an environmental tendency 

while still catering for every type of shopper, from ‘deep green’ to completely 

non-green. Environmental credentials are of growing importance to some 

shoppers, mainly affluent ones. Environmental care is a service in that it 

influences the food products that shoppers buy. The same can be said of 

Fairtrade, which is especially important for the Co-operative Group and Marks 

& Spencer, which, by spring 2007, stocked more than 70 Fairtrade lines and 

sold only Fairtrade tea and coffee. 

There is a discernible trend towards more local produce in supermarkets, as 

shoppers become critical of food miles. As yet, local produce does not 

necessarily reduce food miles, because it may travel to a distribution depot 

before returning to stores in its own area, but in due course customer 

pressure is likely to lead to a more decentralised distribution network. 

Concern for the environment and for sustainable production is particularly 

marked among affluent shoppers. However, for retailers that attract shoppers 

in all income bands, it will be difficult to balance the wishes of green 

shoppers against the constraints on customers on low incomes, for whom 

cheap food matters more than programmes to make food production, and 

grocery retailing, sustainable into the future. 

ASDA 

By 2007, ASDA was far more active than before in taking measures to reduce 

carbon emissions and to promote sustainable production. A quarterly 

newsletter, Sustainability, was launched in summer 2007 and reported on 

‘Respectful Eggs’ from poultry farms in Lincolnshire powered by wind 

turbines and solar panels, where the hens have free access to pasture land. 

The supply of eggs is not a ‘service’ in the usual sense, but does respond to 

shoppers’ concerns about the welfare of battery hens and carbon emissions in 

the food supply chain. ASDA estimates that Respectful Eggs have half the 

carbon footprint of standard free-range eggs. 

In another move, ASDA now sources its citrus fruit from Spain rather than 

Brazil. Most produce is still moved by road, but a train service moves goods 

from depots in the Midlands to Grangemouth in Scotland, and from there 

further north to Aberdeen. The lorry fleet’s road miles fell by 25% between 

January 2005 and summer 2007, but further savings will be progressively 

harder to achieve. ASDA’s immediate environmental targets are for 100% 

renewable energy in its stores and for zero waste being sent to landfill. 





For the Co-operative Group, responding to climate change is one of the five 

social goals uppermost in 2007, the others being social inclusion, good with 

food, tackling crime and modern co-operation as a business model. To try and 

cope with the imperatives of climate change, the Group is aiming to cut 

energy consumption by 25% by 2012, and is also reducing its packaging, 

trying to avoid waste in the transport network, adopting more efficient 

refrigeration equipment and making staff and customers more aware of the 

need to protect the environment. Fairtrade cotton carrier bags and 

degradable bread wrappers continue the theme. 


Marks and Spencer PLC’s 2007 Annual Report and Financial Statements states 

that: 

“Provenance is important. Increasingly, customers want to 

know precisely where their food comes from — right down 

to individual farms and growers. Customers want assurance 

that their food has been sourced ethically — with proper 

care taken over nutrition, fair trading, the environment and 

animal welfare. And they want it to be labelled clearly and 

packaged responsibly.” 

In February 2007, Marks & Spencer launched an organic fruit and vegetable 

box scheme. The box comes in two sizes and is delivered in a 100% recycled 

cardboard box. The company has won awards from the Marine Conservation 

Society, Greenpeace and other bodies for sustainable fish production. 

A reduction in packaging is receiving a lot of attention at Marks & Spencer. 

There is a commitment, across all products, to reduce non-glass packaging by 

25% before 2012. On the sustainability front, Marks & Spencer is acting 

quickly. The first ‘green’ Simply Food store was opened in Galashiels in 

Scotland in September 2007. It emits up to 95% less carbon dioxide (CO 2 ) and 

uses up to 25% less energy than an average Simply Food outlet, and is 

powered by renewable energy. In the same month, the first ‘green’ Marks & 

Spencer opened in Pollok, near Glasgow. This is powered by wind energy 

from Marks & Spencer’s first wind turbine, located in Aberdeenshire, and uses 

up to 55% less energy and emits up to 95% less CO 2 than a standard Marks & 

Spencer store. 

During November 2007, Marks & Spencer announced that it had ordered 

140 high-efficiency lorries, emitting 20% less CO 2 saving 10% of fuel and 

carrying a 16% larger load than lorries in the current fleet. The move towards 

renewable energy continues, with power from food waste at an anaerobic 

digestion plant in Shropshire and a programme to also use farm waste as a 

power source. 




MORRISONS 

In 2006/2007, Morrisons published a social responsibility report for the first 

time and is aiming to reduce food miles. Chairman Sir Kenneth Morrison 

commented in the Annual Report that the company was addressing its high 

distribution mileage, caused by the location of its depots, but went on to say 

that carbon emissions had been reduced due to significant investment in 

modern heavy goods vehicles (HGVs). In 2007, Morrisons introduced labels on 

its own-brand products informing shoppers how much of the packaging can 

be recycled and how this can be done. The scheme is called ‘Recyclopedia’. 

However, compared with some competitors, Morrisons is still at an early stage 

of environmental awareness. 

SAINSBURY’S 

In the financial year ending 24th March 2007, Sainsbury’s introduced an 

electric, zero-emission, 3.5 tonne delivery van. By September 2008, vans with 

this specification will be delivering 20% of online orders to customers, who 

will be encouraged to give plastic bags to the drivers for recycling. By 2010, all 

online grocery shopping deliveries should be by electric van. The company is 

keen to phase out plastic carrier bags and in 2007, promoted its reusable ‘bag 

for life’, although for standard plastic bags to be rendered unnecessary, each 

customer would need to remember to bring along, or buy repeatedly, a 

number of reusable bags. In February 2007, the company trialled moving 

supplies into London from its distribution centre in South East London by 

river barge rather than by road, part of its plan to reduce CO 2 emissions by 

25% before 2012. For the trial to become permanent, the river wharves 

would have to be improved. At the Northampton distribution depot, vehicles 

produce electricity as they drive over special plates, and over a year should 

generate enough power to light 10,000 light bulbs. Sainsbury’s intends to 

reduce the amount of its own waste going to landfill by 50%, relative to 

sales, by 2010 compared with 2005/2006. 

A joint venture with Food from Britain — www.supplysomethingnew.co.uk — 

aims to help food producers to trade with Sainsbury’s, part of the effort to 

increase the availability of local foods. The company is committed for all beef, 

lamb, pork and poultry on meat counters to be sourced from Britain by 

September 2007. During 2007, as in 2006, Sainsbury’s supported the National 

Farmers’ Union’s (NFU’s) Food and Farming Roadshow, which takes farming 

information to the public. Sainsbury’s makes own-label goods available to 

nearly 200 rural shops in an initiative called Sainsbury’s Assisting Village 

Enterprises (SAVE). Village shops struggle to compete with supermarkets in 

nearby towns, but are vital for people without transport and for those for 

whom any form of travel is difficult. 

The Fair Development Fund, launched in August 2007, will help Comic Relief’s 

work with low-income farmers in less-developed countries, including Uganda 

and Malawi. In parallel, Sainsbury’s is switching to Fairtrade products — since 

August 2007, all its bananas have been sourced from Fairtrade producers. 




TESCO 

Tesco has been taking steps towards adopting a more environmentally 

friendly approach. Sainsbury’s, Marks & Spencer, ASDA and the Co-operative 

Group have all been moving faster than Tesco towards reducing CO 2 

emissions and promoting lower-energy lifestyles. However, in 2006, Tesco set 

up an environment fund, and, in January 2007, Chief Executive Sir Terry Leahy 

announced that: 

“We will begin the search for a universally accepted and 

commonly understood measure of the carbon footprint 

of the products we sell and will take the first steps towards 

developing a Sustainable Consumption Institute to lead 

this work. This will enable us to label our products so that 

customers can compare their carbon footprint easily.” 

(‘Green grocer? Tesco, carbon and the consumer’, speech 

by Sir Terry Leahy, 18th January 2007.) 

This undertaking will not necessarily result in a lower carbon footprint, 

as consumers may opt to carry on buying products that have been very 

energy-intensive to make. 

Tesco draws the attention of Clubcard holders to environmental ‘money-off’ 

possibilities; for example, £8.25 in Clubcard vouchers could buy annual 

membership to the Woodland Trust (a charity that buys and protects 

woodlands), a saving of £24.75. Other measures include ‘green’ Clubcard 

points for recycling, cost reductions on energy-saving products such as 

low-energy light bulbs, biodegradable carrier bags, the introduction of 

electric delivery vans, promoting holidays in the UK as alternatives to 

long-haul destinations and an environmental management scheme for more 

than 7,600 farms around the world that supply Tesco. The company intends to 

limit air freight to less than 1% of products and to label all air-freighted 

goods with a little aeroplane by February 2008. 

In its Corporate Responsibility Review 2007, Tesco revealed that, in the 

2006/2007 financial year, its own carbon footprint (not counting the 

greenhouse gas emissions from products up to the time they reach Tesco) 

was 4.1 million tonnes of CO 2 equivalent. 

Tesco, along with other supermarkets, has been criticised by organisations 

such as Friends of the Earth for the waste of energy inherent in sourcing 

products from around the world and for locating new stores on the outskirts 

of towns, thereby encouraging people to use their cars to go shopping. 




ETHICAL SUPERSTORE 

In November 2006, a whole new online business dedicated to serving the 

market for green and ethical shopping was launched. 

www.ethicalsuperstore.com, owned by PointOV Ltd, sells a large range of 

items, including food and drink, books, music, DVDs, clothing, cleaning 

products, toiletries, home decorating materials, stationery, baby and child 

items, gadgets and gifts. On the website, Vic Morgan, who founded PointOV 

with Andy Redfern, says, ‘We now offer 2,500 ethical products for sale and 

you can find more fairly traded products at Ethicalsuperstore.com than in the 

UK’s major supermarkets’. Both used to work for Gateshead-based Fairtrade 

organisation Traidcraft, Vic Morgan as Executive Consultant and Andy 

Redfern as International Director. 

KEY POINTS 

• ASDA is moving more goods by train and has a major waste reduction 

programme. Mitigation of climate change is a key priority for the 

Co-operative Group, while ethical food production is extremely important 

for Marks & Spencer. Sainsbury’s has trialled transporting some goods into 

London by barge, is in the process of changing to electric vehicles for home 

delivery, cutting waste and encouraging local shopping, including a 

programme to support village shops. 

• Morrisons and Tesco have started to introduce measures to reduce 

greenhouse-gas emissions and to use energy more sparingly. 

• Care for the environment is a brand value that an increasing number of 

customers seek. At present, this concern is especially strong among more 

affluent customers. For companies that attract shoppers with all sizes of 

income, there will be problems reconciling the demands of green shoppers 

with the budgets of low-income consumers for whom cheap food is more 

important than long-term sustainable production. Ethical retailing online 

venture www.ethicalsuperstore.com is another significant factor — one 

that could attract many of the UK’s keenest shoppers away from 

supermarkets for products apart from the most perishable foods. 






Health and Pharmacies 

7. Health and Pharmacies 

INTRODUCTION 

Many products with high profit margins are heavily processed items, such as 

crisps and ready meals, which shoppers value for convenience, but 

supermarkets are also promoting healthy eating. Food labelling systems are 

intended to inform shoppers about the nutritional value of the products they 

buy. Customers with time can gain plenty of information from reading all the 

ingredients, but ‘headline’ systems such as ‘traffic lights’ provide at-a-glance 

guidance and are especially helpful to time-pressed shoppers. 

In Key Note’s consumer survey, supermarket pharmacies were noticeably 

popular with respondents in social grade E, 33.8% of whom had had at 

least one prescription dispensed from a supermarket pharmacy in the past 

6 months, compared with 18.6% of respondents overall. Supermarket 

pharmacies are more than a niche sector, but independent and specialist 

multiple pharmacies on high streets and in neighbourhood shopping centres 

show strong survival capability. 

FOOD LABELLING AND INGREDIENTS 

Sainsbury’s has chosen to label the front of its own-brand packs with red, 

amber and green ‘traffic lights’ and guideline daily amounts (GDAs) on the 

back, whereas Tesco and Morrisons have opted to emphasise GDAs. This is 

perhaps more precise but not particularly helpful to shoppers who do not buy 

all their ingredients immediately before using them in meals, and who may 

thus lose track of the GDAs they have already purchased. After researching 

customers’ views, ASDA has combined ‘traffic lights’ with some additional 

nutritional information. 

Sainsbury’s premium ‘Taste the Difference’ range of products is free of 

artificial colours and flavours and hydrogenated fats. In 2007, these 

ingredients were being removed from the chain’s other own-label ranges. 

Tesco has a variety of ‘healthier’ lines, such as Organics, Healthy Living, 

Wholefoods, Fairtrade and Kids. During 2006/2007, 40% of Tesco shoppers, 

spanning all income groups, bought some organic food. Sir Terry Leahy, Chief 

Executive, commented: 

“… we’re seeing a fundamental shift in the priority 

consumers place on food. The link between diet and health, 

interest in cooking, provenance — including local and Fair 

Trade — it is more than simply trading up. It is also not just 

about affluent customers —– it’s everyone and that means it 

could be a long term positive for our industry.” (Tesco PLC, 

Annual Review 2007, p. 3.) 

Marks & Spencer labels its foods with both ‘traffic lights’ and GDA 

percentages, a system that should cover all ranges by the end of 2007/2008. 

Marks & Spencer emphasises healthy food, pointing out in its 2007 Annual 




Report that hydrogenated fats, or transfats, were not in any of its food by 

2006, and that the ranges of Marks & Spencer Cook!, Eat Well children’s meals 

and Marks & Spencer ready meals are free of artificial colours, flavourings, 

sweeteners and preservatives. More Marks & Spencer shoppers are buying 

organic foods, which are expected to triple in sales by 2012. 

The range of label formats and content information is confusing, although 

the data are helpful for those shoppers who have time to study it. A traffic 

light system can oversimplify, but its message is immediately assimilated. 

PHARMACY BOOST FROM 2001 

Until 2001, resale price maintenance (RPM) applied to around 2,300 

over-the-counter (OTC) medicines. RPM helped small independent 

pharmacies to stay in business and limited supermarkets’ interest in 

medicaments. The Community Pharmacy Action Group and the Proprietary 

Association of Great Britain were strongly in favour of retaining RPM, but, 

following pressure from the Office of Fair Trading (OFT) and chains such as 

ASDA, it was abolished in 2001, and stores were free to sell OTC medicines at 

whatever price they chose. 

ASDA had argued that RPM amounted to a ‘health tax’ of £300m a year. 

Pharmacists countered with the view that the abolition of RPM would lead 

many small chemists to close, affecting customers who may live a long way 

from the nearest supermarket pharmacy. However, pharmacists lost the 

debate and price won over convenience, giving a boost to supermarkets’ 

medicament retailing and thus, even if indirectly, to in-store pharmacies. 

Pharmacies are a key area for the Co-operative Group, which operated 431 

pharmacies in the financial year ending 13th January 2007. During this 

12-month period, the Pharmacy division recorded an operating profit of 

£25.9m, before significant items, and has become a central part of the 

business. In summer 2007, the Co-operative Group announced plans to 

manufacture its own prescription drugs in the People’s Republic of China. 

Sants, a subsidiary of the Group, is to invest £20m in the development of a 

manufacturing plant in Tianjin in a joint venture with Tasly Group, a Chinese 

manufacturer of herbal medicine, which owns 40% of Sants. The factory was 

scheduled to begin production within a year. 

MAKING THE NATION FITTER 

All the major food multiples have programmes to counterbalance the 

ill-effects of excessive consumption of less-nutritious products. Sainsbury’s 

Active Kids programme, for example, donated £34m for sport in 2005 and 

2006. Tesco is sponsoring schools sport, funding equipment worth £8.7m in 

2006/2007, while membership of the Healthy Living Club, to encourage 

sensible nutrition, increased from 548,000 to 603,000 between 26th February 

2006 and 24th February 2007. 




KEY POINTS 

• Supermarkets are promoting healthy eating and are labelling foods 

accordingly, but the range of label formats is confusing for shoppers. 

• The expansion of supermarket pharmacies, encouraged by ASDA, in 

particular, and with the Co-operative Group as a major participant, has 

proved very popular with low-income shoppers. 

• The leading supermarkets have programmes to encourage nutritious diets 

and physical exercise. 






Other Services 

8. Other Services 

AUTOMOTIVE 

Supermarkets are involved in the fuel market in two main ways: selling fuel 

independently; and linking with fuel companies to open shops on forecourts. 

Tesco is the UK’s largest independent petrol retailer, in terms of the volume of 

fuel. As at early September 2007, it had around 420 of its own filling stations, 

which are supplied by eight fuel distributors: BP; Conoco; Greenergy; Harvest 

Energy; Mabanaft; Shell; Texaco; and Total. In September 2007, Tesco was 

attempting to attract in-store shoppers by offering 5 pence a litre off fuel 

from its filling stations if they spent £50 or more in the store. 

ASDA, Sainsbury’s and Morrisons are also important fuel retailers. ASDA, 

which has 167 filling stations as at 15th August 2007, aims to lead on price. 

On 15th August 2007, it took 2 pence off the price of a litre of unleaded fuel, 

lowering it to 91.9 pence a litre; a further 2 pence reduction was available for 

customers paying with their ASDA store or credit card. There is a certain 

ethical tension between increasing renewable energy and cutting road miles, 

as ASDA is doing, and offering cut-price fuel to motorists, but no easy 

answers, because the fuel market is extremely price sensitive and 

uncompetitive pricing means losing market share. 

Sainsbury’s had 244 filling stations in summer 2007, during which time it 

rewarded store shoppers with money off fuel. Morrisons, with around 300 

filling stations in summer 2007, sold £2.71bn-worth of fuel in the 53-week 

financial year ending 4th February 2007. Morrisons has a reverse incentive to 

Sainsbury’s in that people who buy fuel can collect points for money off their 

shopping in its stores. 

There is growing interest in alliances with oil companies; for example, Tesco 

opened Tesco Express stores on Esso forecourts and is maintaining the 

connection despite acquiring T&S Stores in January 2003, a purchase that 

became the hub for Tesco Express stores of up to 3,000 square feet, many of 

them with a Tesco own-brand filling station. 

Budgens has opened shops on Q8 and Conoco forecourts, while Safeway, 

prior to its acquisition by Morrisons in March 2004, opened shops on 

BP forecourts. In 2007, Marks & Spencer is a major partner for BP 

at filling stations. 

Sainsbury’s and Spar both linked with Shell for forecourt shops. Spar also 

opted for shops on Fina and Texaco forecourts, and Costcutter on Jet and 

Murco forecourts. Somerfield has forecourt stores in association with Texaco, 

and has adopted the concept of forecourt convenience retailing as an 

important business strand. 

In 2005, Somerfield bought 140 Texaco convenience stores and filling stations, 

and conducted a sale and leaseback deal with Palmer Capital Partners in 

co-operation with Deutsche Property Asset Management. Somerfield 

operates the stores and the filling stations, with Texaco supplying the fuel. 




The stores are typically 4,300 square feet in size and cater for busy car-owning 

workers, including those who work unsocial hours. In several of the stores, 

Somerfield has developed a range of hot takeaway food. 

By 2007, the multiples were competing with each other to promote biofuels, 

although current production methods for biofuel crop cultivation and 

processing are energy-intensive and not environmentally friendly. 

Sainsbury’s Bank offers a service that enables customers to order a new car 

every 2, 3 or 4 years, so they can always have an up-to-date model, with the 

help of a loan from the Bank. The Co-operative Group used to sell cars, but 

exited from its Priory motor dealership business in 2006. 

DRY CLEANING 

Dry cleaning is of minor importance in supermarkets’ range of services and is 

a declining market, hit by better domestic washing machines, easy-care 

fabrics and fabric fresheners. In Key Note’s consumer research, only 3.3% had 

taken an item to a supermarket dry cleaners in the previous 6 months — not 

an insignificant proportion, but not among the most popular supermarket 

services. 

EDUCATION 

In February 2007, The Open University and Tesco launched a scheme for 

students to be able to use Clubcard vouchers towards the cost of courses at 

four times the voucher face value, i.e. a £10 voucher would reduce fees by 

£40. The Open University teaches 35% of all part-time undergraduates in the 

UK, and increasingly draws young students who find it a cost-effective 

alternative to attending a traditional university — more than 20% of all new 

Open University students are aged under 25. 

Tesco’s ‘Computers for Schools’ voucher scheme supplied more than 2,500 

computers to schools in 2006 and 127,800 other items of school equipment. 

Customers receive additional vouchers for recycling ink cartridges and mobile 

telephones. 




ENTERTAINMENT 

Tesco has pursued the path to online multi-genre sales of books, CDs, DVDs 

and games, plus DVD rental and music downloads. The book choice is not as 

wide as from Amazon, for example, and is geared towards bestsellers, but the 

offer of Clubcard points is an incentive to buy from Tesco. Tesco Jersey sells 

DVDs, CDs and games free of VAT, a taxation anomaly arising from Jersey’s 

self-governing status and one that has led to the proliferation of Jersey-based 

businesses selling such products. Clubcard vouchers also enable customers to 

save money on magazine subscriptions; for example, £7.25 in vouchers would 

provide a year’s subscription to National Geographic. Conversely, a customer 

signing up for Tesco DVD rental online would receive 1,000 extra Clubcard 

points. 

In 2000, ASDA opened a drive-in cinema in the car park of its Bradford store. 

The move was temporary to coincide with the National Museum of 

Photography, Film and Television’s festival of Asian and Black Cinema, but it 

was an interesting idea for dual use of a car park. In the same year, ASDA 

diversified into building ice skating rinks in car parks and had experts on hand 

to advise and demonstrate. These are examples of what ASDA calls 

‘retailtainment’, which also encompasses singles nights and ‘men’s nights’. 

The standard entertainment offers include CDs, DVDs and games in stores 

and online. 

In November 2000, Safeway (subsequently acquired by Morrisons) began 

selling 1-acre plots on the moon for £15.99. The chain acquired the ‘rights’ 

to sell 45,000 acres. 3 months later, Safeway launched a service selling 

concert tickets. 

ESTATE AGENCY 

Tesco launched an estate agency portal at the end of June 2007 with Tesco 

Property Market, a Web portal for England and Wales carrying properties 

from Fish4homes and smartnewhomes.com. Fish4homes has been developed 

by Newsquest Media Group, Trinity Mirror and Guardian Media Group 

Newspapers, which combined publish around 500 daily and weekly regional 

newspapers. Fish4homes has not been profitable for its owners and the extra 

exposure through Tesco could be highly beneficial. Smartnewhomes.com 

represents home builders, and these too have a large potential new audience 

through Tesco. Individuals can market their own home for £199 or choose an 

agent from the Ombudsman for Estate Agents’ approved list to sell it for 

them through the portal. 

Tesco’s idea was to provide one-stop property shopping with access to 

financial services, including mortgages, home insurance, neighbourhood 

information, furniture and household equipment from Tesco Direct, online 

conveyancing, Home Information Packs (HIPs) and a new product called home 

buyer’s expense insurance, covering the costs incurred when transactions fail. 




Organisations, including Which?, the Royal Institution of Chartered Surveyors, 

Lawpack and the Suzy Lamplugh Trust, helped Tesco develop the site, which is 

supported by a customer-service centre open from 9am to 8pm, 7 days a 

week. Secure identity verification is a major feature of the website. 

However, the property sale service was suspended soon after the launch, 

following consultations with the Office of Fair Trading (OFT). The OFT told 

Tesco that, under the 1979 Estate Agency Act, the Tesco Property Market sales 

service was classed as an estate agency and subject to all the regulations in 

the Act. Tesco retained the Property Market website, minus the property 

sales, for its advisory content, and continued to investigate the possibility 

of launching a full online estate agency with links to leading property portals. 

The company said that the home-selling service had become enormously 

popular in a short space of time, which it remains keen to capitalise on. 

FUNERALS 

Co-operative Funeralcare (part of the Specialist Retail division of the 

Co-operative Group) is the largest UK-owned funeral director, with more than 

600 funeral homes at the start of 2007, and offers pre-payment plans for 

people who would like to plan and pay for their own funeral. During 2006, 

Co-operative Funeralcare split into two, one arm for funeral preplanning and 

the other for immediate funerals. The business’s operating profit for the year 

ending 13th January 2007 was £17.7m, before significant items. 

Customers can organise a wide range of funerals; for example, Mutual 

Services (Portsmouth), a member of the Co-operative Group, has horse-drawn 

and motorcycle funerals, and a large array of coffins, including eco-friendly 

and colourful varieties. 

GARDENS 

Gardening, or the use of gardens as leisure spaces, is a significant British 

pastime. In June 2007, Tesco agreed to buy Scottish garden centre business 

Dobbies, which had 21 stores in Scotland and in the North of England and the 

Midlands. Not all Dobbies’ shareholders were in favour, but by the third week 

of August, Tesco had approval from owners of more than 50% of the equity. 

The plan is to roll out Dobbies as a nationwide chain of eco-stores selling 

energy-saving, horticultural and environmental products. This will give Tesco 

access to the £5bn-a-year consumer gardening market, an area which 

Sainsbury’s used to be in but left in 2001 when its Homebase subsidiary was 

sold to private-equity firm Permira. 




LEGAL SERVICES 

In November 2006, the Co-operative Group launched a free legal helpline for 

its 2 million-plus members, providing advice on buying and selling property, 

consumer rights and what to do if you are involved in an accident, have a 

problem with a neighbour or any other personal matter. The service is 

expected to expand to include conveyancing, will-writing, probate and 

personal injury assistance. 

PHOTOGRAPH PROCESSING 

Photograph processing is an old technology, given that digital technology 

allows images to go straight from camera to computer. Critics would say it is 

unwise to spend much on an outdated technology now that digital cameras 

are so popular. However, supermarkets often provide both digital image 

capture and traditional film processing. 

POST OFFICES 

Several co-operative societies have offered space to post offices; for example, 

the Lincolnshire society has 41 across Lincolnshire, Nottinghamshire and 

South Yorkshire. Tesco took more than 300 post offices as part of its purchase 

of T&S Stores, but did not want to retain them all and offered incentives to 

nearby businesses to take them over. Morrisons’ purchase of Safeway brought 

with it a number of post offices, which Morrisons was not as keen to retain 

and quickly applied to close 21. ASDA retains some in-store post office 

counters and Sainsbury’s has inherited a few in convenience stores it has 

purchased. 

Supermarkets do not see post offices as much of a profit opportunity. Post 

offices are a real customer service, but are in the process of being 

restructured as part of Royal Mail Group’s efforts to become financially viable 

over the longer term, while remaining competitive with commercial 

organisations that do not have the Royal Mail’s responsibilities to maintain 

national collections and deliveries. 

TRAVEL AGENCY 

The Co-operative Group owns the UK’s leading independent travel agency 

group Travelcare, which used to have a link with Tesco to give customers 

Clubcard points on holiday and travel purchases. That link was broken by 

2007. Travelcare lost £6.9m, before significant items, in 2006, as fewer 

customers opted to buy off-the-shelf package holidays. Tesco has its own 

holidays and travel portal powered by lastminute.com, and ASDA operates a 

similar venture with www.wefly.co.uk. Waitrose offers customers travel and 

holidays through John Lewis’s Greenbee online service. 




UTILITIES 

The supply of electricity and gas is not an obvious activity for supermarkets, 

except that cooking requires fuel. Sainsbury’s, the most focused on food of 

the large multiples, sells both electricity and gas in partnership with utility 

company EDF Energy. Nectar points are an incentive, up to 6,200 in the first 

year. Both Tesco and ASDA have price comparison sites assisting customers to 

switch from one supplier to another, with suppliers paying commission for 

new customers who sign up. 

WEDDINGS 

Marks & Spencer has offered a wedding list service since 1994, and the John 

Lewis Partnership, of which Waitrose is part, has a gift list service. Gift lists are 

typical of department stores rather than supermarkets, which concentrate on 

everyday purchases rather than on exclusive gifts. 

KEY POINTS 

• Supermarkets often use fuel sales as a marketing opportunity to encourage 

spending within stores and vice versa. Tesco’s purchase of the T&S 

convenience chain provided impetus for the development of Tesco Express 

forecourt shops and filling stations. The forecourt sector has become highly 

competitive, with Tesco, Somerfield, Sainsbury’s and even Marks & Spencer 

vying to capture mobile shoppers. 

• Tesco has an imaginative service for Clubcard vouchers to be exchanged at 

four times face value for Open University fees, and also sponsors 

information technology (IT) equipment in schools. Tesco’s launched an 

estate agency portal in 2007, emphasising the company’s drive to expand its 

services portfolio, and the purchase of Dobbies garden centres accords with 

the aim to provide everything for household, home and garden. 

• The Co-operative Group’s additional services include legal help, funeral 

direction, post offices and travel agency. Overall, supermarkets are not 

keenly interested in funerals or legal services. However, Tesco, ASDA and 

Waitrose all promote travel services. 

• Utilities are not traditional supermarket territory, but Sainsbury’s sells 

electricity and gas, while ASDA and Tesco run price comparison and supplier 

switching services. 

• The sheer range of services offered, especially by Tesco and the 

Co-operative Group, but with ASDA, Sainsbury’s, Morrisons and Waitrose all 

providing service portfolios, illustrates the ongoing transformation of 

supermarkets into general trading portals. 



Home Delivery 

9. Home Delivery 

INTRODUCTION 

Various home delivery schemes have been tried, but have developed into: 

• national deliveries by suppliers’ own fleets, Royal Mail or couriers for 

non-food products purchased online 

• local deliveries (albeit with patchy national coverage) for groceries and 

household products bought online and dispatched from local stores or, as 

in the case of the Ocado service offered by Waitrose, a central warehouse. 

Iceland, some Somerfield stores and some co-operative societies offer local 

delivery for shopping bought in-store. 

Barriers to Overcome 

Home delivery services have several barriers to overcome: 

• The customer may not be at home when the shopping arrives. 

• The awkward logistics of minimising van mileage while delivering to 

customers at times when they are in. 

• The costs of rectifying incorrect orders. 

The practice of offering specific delivery slots avoids the need for customers 

to stay in all day if they expect a delivery, although the time slot booked and 

the actual delivery times are not always the same, because of delays resulting 

from roadworks, accidents, etc. 

An opportunity exists for supermarkets to provide sites for containers from 

which people can collect parcels and packages. Business Direct is placing 

boxes outside Tesco, Somerfield and B&Q stores to allow customers to pick up 

deliveries. Royal Mail already provides a similar service, Local Collect, for 

people to pick up packages from their local post office. 

ASDA 

In 1999, ASDA tested a home delivery service in Croydon. Delivery was £3.50 

or free on orders above £99. The ‘@t home’ service was then launched within 

the M25 and did well. In November 2000, a major expansion was announced 

to take the service to 60% of the UK population within 2 years. The Internet 

changed the concept to home delivery for products ordered online, subject to 

a minimum spend of £25. In November 2007, incentives to shop online 

included free delivery for customers spending more than £99 on an ASDA 

credit card. For customers spending less, delivery charges ranged from £4 on 

Tuesday or Wednesday to £5 on Friday, Saturday or Sunday. 


Home Delivery 



Home delivery trials (the Co-op2U service) conducted in north-east England 

developed eventually into www.co-op2u.com, the Co-operative Group’s 

online electricals store, which, in 2003, underwent a name change to 

www.coopelectricalshop.co.uk. The Co-operative Group’s nationwide 

deliveries are for items that the typical shopper could not be expected to 

carry home, such as large electrical appliances. Various local co-operative 

societies offer home deliveries for food and other items purchased in store; 

for example, the Caithness society offers free home delivery for customers 

spending at least £25, or with a £3 charge for lower spends. 

ICELAND 

Iceland’s home shopping service is a differentiator from the majority of its 

niche and convenience competitors, in that shoppers who spend at least £25 

in store can have free delivery to their home at a time slot of their choosing. 

The service benefits people who shop during their lunch hour and prefer not 

to take their shopping back to work or who are visiting several other shops 

and do not want to carry heavy bags around with them. 


In February 2001, Marks & Spencer used weekend newspapers to circulate a 

catalogue for www.marksandspencer.com. Customers could order by mail, 

telephone, fax or online, but this venture was withdrawn on 31st May 2001 

after failing to achieve sufficient volume. In 2007, Marks & Spencer did not 

deliver groceries, although it did deliver wine, clothing, gift cards, homeware, 

selected technology, flowers and fruit baskets. 

MORRISONS 

Morrisons is less involved than the other large supermarket multiples in 

providing ancillary services and does not have an online shop or provide 

home deliveries. 



Home Delivery 

SAINSBURY’S 

In 2000, the ‘Sainsbury’s to You’ home delivery service was launched within 

the M25 area, replacing the Orderline service that began in 1996. In 2005, the 

service was reborn as www.sainsburystoyou.com, the online grocery ordering 

and delivery service, although it is not available nationwide. In 2006/2007, 

Internet-ordered home deliveries were offered from 114 stores, a number 

scheduled to increase to around 200 by March 2010. In November 2007, the 

standard delivery charge was £5 (rising to £6 in some areas). However, this 

price fell to £2.50 for selected times on Tuesday, Wednesday or Thursday for 

customers spending more than £70. 

In November 2000, Sainsbury’s began a trial with Homeport for unattended 

delivery boxes outside customers’ homes. However, this did not proceed 

beyond the trial, mainly because of the expense of providing boxes and their 

unsuitability for frozen or chilled goods — few people wanted to confine 

their shopping to dry goods. 

SOMERFIELD 

Somerfield Direct was launched in March 1999, when Somerfield bought 

Flanagans, a direct sales company based in London. The attraction of 

Flanagans was its technology — a call centre linked to a paperless 

stock-picking system. However, the business had a short life and was closed in 

June 2000. It was followed in August 2000 by a ‘Store to Door’ service using 

groups of delivery vans, each group serving 20 to 25 stores. In 2007, free 

home delivery was being offered in around 300 stores to customers spending 

more than £25 and living within 5 miles. There was also the Business Delivery 

Service, taking orders to business premises such as care homes, guest houses 

and local authorities. 

In 2006, Somerfield conducted an interesting trial that enabled care workers 

employed by three local authorities to order shopping for the elderly people 

they look after, and for the orders to be delivered to elderly persons’ homes. 

TESCO 

Tesco’s online home shopping business, through www.tesco.com, takes 

250,000 orders every week. It is the world’s largest home shopping business 

and is available to around 90% of the UK population. In 2007, the service 

offered delivery to those within a 30-minute drive of each store at a cost of 

between £3.99 and £5.99. 

Tesco Direct is a direct competitor to Argos for furniture, household 

equipment and other non-food products. Tesco Direct was launched early in 

2007 with 11,000 products on the website. Customers can request 2-hour 

delivery slots for some items, but otherwise have to wait in for up to a day to 

receive a delivery. Alternatively, customers can pick up items from stores. 


Home Delivery 


WAITROSE 

Waitrose’s delivery service began in 1998 with the launch of waitrose@work, 

which signed up large employers to permit their staff to have their Waitrose 

shopping delivered to their workplace. Employers who quickly signed up to 

the scheme included the BBC, Microsoft and Barclaycard. Workplace delivery 

addressed the problem of customers not being at home when their shopping 

arrived. In 2002, Waitrose linked with distributor Ocado to launch an online 

grocery shopping service with home delivery. By 2007, the Ocado service was 

available to more than 13.5 million households in the South East, along the 

South Coast, in the Midlands and the North West. 

KEY POINTS 

• ASDA and Tesco both have substantial online grocery stores with home 

delivery. Sainsbury’s has ventured cautiously into online grocery retailing 

and has patchier national coverage than Tesco, in particular. However, 

none of the supermarket chains have full national coverage for grocery 

deliveries. Waitrose’s service with Ocado serves England’s largest 

population centres. 

• Iceland’s home delivery service for in-store shoppers, which is free to those 

spending £25 or more, is a major benefit for the chain. However, it is not 

unique, as Somerfield and some co-ops also offer free deliveries to 

customers who spend over a specified amount and who live within a certain 

catchment area. 

• Deliveries are a valuable customer service, but more alternatives to home 

delivery, such as designated 24-hour pick-up points, would be helpful to 

busy customers who are rarely at home or whose schedules are subject to 

rapid change. 



Promotion 

10. Promotion 

THREE CHAINS SPEND MORE THAN £50M 

According to Nielsen Media Research (NMR), Marks & Spencer, Tesco and 

Sainsbury’s each spent more than £50m on main media advertising in the 

year ending June 2007. ASDA recorded an expenditure of £38.5m and 

Morrisons £26m. Two of the leading discount chains, Aldi and Lidl, had 

expenditures in excess of £10m, as did Co-operatives. Waitrose, Somerfield 

and Iceland recorded spends of between £7.8m and £8.7m, followed by Spar, 

Costcutter and Budgens. 

Table 3: Main Media Advertising Expenditure by Supermarkets 

(£000), Year Ending June 2007 

Marks & Spencer † 64,930 

Tesco 62,941 

Sainsbury’s 51,596 

ASDA 38,497 

Morrisons 26,031 

Aldi 12,639 

Co-operatives 11,286 

Lidl 10,171 

Waitrose 8,713 

Somerfield 8,298 

Iceland 7,841 

Spar 1,579 

Costcutter 1,151 

Budgens 649 

† — classified as a department store 

Source: Nielsen Media Research 

Marks & Spencer 

Marks & Spencer (which has an estimated 4.3% share of the grocery 

market, according to the 2007 Annual Review, p. 17), sells more food 

than either Waitrose or Morrisons, and ranks as the fifth-largest supermarket 

multiple (in terms of turnover) after Tesco, ASDA, Sainsbury’s and Morrisons. 


Promotion 


Food featured prominently in Marks & Spencer’s main media advertising 

expenditure in the year ending June 2007, although women’s fashion was the 

dominant individual category, recording a spend of £19.1m. However, when 

combined, the food range, organic food and drink, Christmas and Easter 

foods accounted for £19.3m of the total spend of £64.9m. Services did not 

feature among the heavily advertised categories. 

Table 4: Main Media Advertising Expenditure 

by Marks & Spencer by Selected Category 

(£000), Year Ending June 2007 

Women’s fashion 19,115 

Food range 12,860 

Product range 8,906 

Childrenswear 3,412 

Christmas food range 2,589 

Organic food and drink range 2,159 

Lingerie/underwear range 1,736 

Easter food range 1,720 

Corporate 1,646 

Autograph menswear 1,506 

Others 9,281 

Total 64,930 

Note: categorised as a department store. 


Tesco 

Apart from the heavy promotion of its product range, Tesco spent more on 

advertising food and drink in the main media in the year ending June 2007 

than on any services: £3.4m on fruit and vegetables; £2.6m on wine; £1.7m on 

alcoholic drinks; £2m on Local Choice milk; and £1m on Finest roast potatoes; 

plus smaller amounts on many other products. Household products receiving 

heavy main media advertising support included DVDs, CDs and clothing. 

Tesco enthusiastically promoted its mobile telephone range and network in 

the main media, spending £2.8m, according to NMR. Reusable carrier bags, 

part of Tesco’s environmental effort, and sport for schools and clubs received 

expenditures of £1.7m and £2.7m, respectively. 



Promotion 

Table 5: Main Media Advertising Expenditure by Tesco 

by Selected Category (£000), Year Ending June 2007 


Fruit and vegetables 3,350 

DVD range 3,008 

Mobile telephone range and network 2,811 

Sport for schools and clubs 2,718 

Wine 2,561 

Local Choice milk 1,976 

Alcoholic drinks 1,698 

Carrier bags 1,694 

Florence & Fred women’s fashion 1,666 

CD range 1,412 

Mobile Extra 1,077 

Finest roast potatoes 1,032 

Others 16,613 

Total 62,941 


In 2007, Tesco launched a television and print media campaign wholly 

focused on low prices, comparing Tesco’s prices for various products with 

those charged by leading competitors. 

Sainsbury’s 

Sainsbury’s main media advertising expenditure profile in the year ending 

June 2007 highlighted (in addition to the brand itself) premium ‘Taste the 

Difference’ food, British food and fruit and vegetables, as well as wine, DVDs 

and alcoholic drinks. Main media advertising in support of Comic Relief 

received a spend of £2.9m, but apart from that and DVDs, the ranges given 

the most advertising support were in food and drink categories. During the 

12-month period to June 2007, Sainsbury’s spent 34% more than ASDA on 

main media advertising as it worked to move above ASDA in the market 

shares ranking. 


Promotion 


Table 6: Main Media Advertising Expenditure by Sainsbury’s 



Taste the Difference 3,995 

Comic Relief 2,850 

Fruit and vegetables 1,835 

British food range 1,615 

Wine 1,585 

DVD range 1,137 

Alcoholic drinks range 1,078 

Others 13,587 

Total 51,596 


ASDA 

ASDA’s main media advertising expenditure in the year ending June 2007 

included major campaigns for its bread, milk, wine and its Extra Special 

premium food ranges, but the highest spend for a product category was 

£5.3m on the George clothing range. The advertising priorities appeared to 

rank inexpensive luxuries and value ranges above any services. 

Table 7: Main Media Advertising Expenditure by ASDA 



George clothing 5,334 

Bread range 2,414 

Wine range 2,088 

Milk range 1,264 

Extra Special food range 1,253 

Others 11,049 

Total 38,497 




Promotion 

KEY POINTS 

• Supermarkets’ services are not to the fore in their advertising, although this 

is less true of Tesco than of the other leading multiples. 

• Marks & Spencer, Tesco and Sainsbury’s each spent more than £50m on main 

media advertising in the year ending June 2007. 

• Tesco’s main media advertising expenditure focused on the brand, with a 

strong showing for mobile telephone services, sport for schools and clubs 

and reusable carrier bags. 

• ASDA’s main media advertising expenditure was muted in relation to the 

chain’s number two spot for market share, and concentrated on the brand 

and brand values (wide range and low prices). 

• Sainsbury’s, spending 34% more than ASDA, also emphasised the brand and 

food above services, as did Morrisons. 


Promotion 




An International Perspective 

11. An International Perspective 

SUPERMARKET SERVICES ARE FOR THE FEW 

Technology is driving changes to supermarket shopping around the world. 

The proportion of food bought in supermarkets indicates the material wealth 

of each society. Supermarkets may be the norm in Western Europe, the US, 

Canada, Australia and New Zealand, but around the majority of the world 

they serve elites, including expatriates. In some areas (in particular, oil states), 

expanding middle classes are joining the elites, but the other side of 

middle-class growth in poorly regulated economies is a widening gap 

between those with money and those without. The income gap is increasing 

around the globe, including in the UK and the US. According to the United 

Nations’ Population Fund’s State of the World Population 2007, in 2007, 

around 3 billion of the world’s 6.6 billion people subsist on less than $2, or £1, 

a day. The number who can produce their own food is in decline because of 

land loss, land degradation and the draw of wage labour in cities. The 

Population Fund estimates that more than 3.3 billion people will be living in 

cities in 2008. For the majority, regular food supermarket shopping will not 

be an option, let alone the purchase of other services from supermarkets. 

The way ahead for supermarket retailers in less-affluent societies is 

limited assortment neighbourhood stores with few frills. Ancillary 

added-value services are for the higher-income localities within the world’s 

wealthy nations. 

Retailing in India and the People’s Republic of China 

Foreign retailers are keen to enter both the Chinese and Indian markets. Of 

the two, the Chinese market is more open. In India, large foreign retailers are, 

in 2007, precluded, although foreign companies can enter the wholesaling 

sector. US company Wal-Mart has done this, linking with Indian company 

Bharti Enterprises to form Bharti Wal-Mart Private Ltd to open cash-and-carry 

stores, the first of which is scheduled for 2008. 

In the People’s Republic of China, the creation of modern supply chains 

or food and household products is well under way, unfortunately with a 

detrimental social impact — agribusiness enterprises gear up to supply 

supermarkets, and in the process often push small farmers off their land. 

The situation is weighted against small farmers because they do not have 

permanent land rights, but numerically they amount to less than 30% of 

the population: 900 million of the People’s Republic of China’s 1.3 billion 

already live in cities, where they are served by more than 16,000 

supermarkets and hypermarkets in Chinese and foreign-owned chains. 

That is only one to more than 56,000 people, leaving plenty of room for the 

sector to expand. (‘Agribusiness may reap profits and problems for China’, 

www.ft.com, 3rd April 2007.) 


An International Perspective 


Tesco is a major player in the people’s Republic of China, controlling a 

hypermarket business called Tin Cao, which operates around 47 Hymall 

superstores. Interestingly, Tin Cao began as a Taiwanese company. Carrefour 

of France and Wal-Mart of the US also have significant ambitions in the 

People’s Republic of China, as does Tesco, which is expanding in Taiwan, 

Japan, Malaysia, Thailand and South Korea as well as in Eastern Europe and 

the US, where in 2006, it ventured into opening convenience stores along the 

Pacific coast. 

COST–BENEFIT EQUATION FINELY BALANCED 

In the UK, Tesco has considerable experience of offering ancillary services to 

customers, experience that will be helpful in international expansion. 

However, there is a downside that multinational supermarkets tend to make 

more prominent — the globalisation of culture and decline of social diversity. 

Credit and debit cards are global, speeding the development of cashless 

payment systems. In the AS Watson chain in Taiwan, for example, customers 

can wave their Visa card at the card reader for their purchase to be recorded 

and their account debited. This is extremely fast, but requires shoppers to 

trust the system completely. ‘Wave and pay’ is happening in London, too, 

where Transport for London (TfL), Barclaycard and Visa have a venture for a 

single credit, debit and electronic money card that can be waved at a machine 

reader to buy travel tickets, snacks, newspapers, etc. 

‘Wave and pay’ may encourage cardholders to overspend, another potential 

downside of supermarkets’ rising influence. In Key Note’s consumer research, 

62% of respondents felt enticed to overspend in supermarkets, a figure that 

could rise if they could ‘wave and pay’ without really thinking whether they 

can afford it. The cost–benefit equation for multinational supermarkets is 

finely balanced: efficient buying and logistics can promote continuity and 

quality of supply and keep prices to a minimum, but the very availability of 

multitudinous products and services is itself a temptation to overspend, to 

save insufficiently for the future and to fall into debt. 

KEY POINTS 

• Supermarkets’ added-value services currently have a small target market in 

global terms, confined to the wealthiest nations and to elite enclaves 

elsewhere. 

• India has a protected retail sector that is very difficult for foreign firms to 

enter. The Chinese market, which is expanding headlong, is more open. 

• International supermarket businesses give customers continuity of supply, 

consistent quality and often low prices, but at the same time they can 

encourage shoppers to overspend. 



PEST Analysis 

12. PEST Analysis 

POLITICAL FACTORS 

The Competition Commission 

On 9th May 2006, the Office of Fair Trading (OFT) referred grocery retailers, 

including the largest supermarket multiples, to the Competition Commission 

for it to consider whether ‘any feature, or combination of features, of each 

relevant market prevents, restricts or distorts competition in connection 

with the supply or acquisition of any goods or services in the UK or part of 

the UK’. (‘Emergent Thinking on the Grocery Market’, 23rd January 2007, 

paragraph 5.) The investigation covers food for consumption outside the 

store, drinks, pet food, cleaning products, toiletries and household goods. 

Other categories of goods and services sold by supermarkets, including 

financial services, are outside the terms of reference. 

The Commission set out with the view that commercial success should not be 

penalised unless there was firm evidence of abuse of market power that 

harmed consumers, and stipulated that a large market share would not 

necessarily be an issue, unless its buying power was so great as to be 

monopolistic. In its preliminary analysis published in January 2007, the 

Commission reported that between 2000 and 2006, grocery sales in the UK 

increased by almost 17% in real terms, to £123.5bn, while the real price of 

food fell by nearly 7%. Sales through supermarkets rose by 26% and through 

convenience stores by 19%, but sales from independent shops increased by 

just 1%. The tenor of the comments seemed to be that supermarkets were 

enabling shoppers to buy food relatively cheaply, and this was broadly in the 

national interest. 

Thus, it is likely that the leading supermarket chains will remain free to 

develop further in the directions of their choosing. 

In further findings released in October 2007, the Commission reached a 

provisional conclusion that: ‘The UK groceries market is delivering a good 

deal for consumers but action is needed to improve competition in a number 

of local markets and to address relationships between retailers and their 

suppliers.’ The Commission also said that it was concerned about ‘the ability 

of grocery retailers to transfer excessive risk and costs to suppliers through 

various purchasing practices, such as retrospective changes to supply 

agreements’. 

The Competition Commission has until 8th May 2008 to publish its final 

report. 


PEST Analysis 


Planning Regulations 

In 2000, the Department of the Environment, Transport and the Regions 

(DETR) stated: 

“The Government remains firmly committed to the 

objectives of PPG6 [Planning Policy Guidance no.6] which 

seeks to sustain and enhance the vitality and viability of our 

existing city, town, district and local centres and to make 

them the focus for retail investment.” 

Therefore, it was to remain very difficult for multiple retailers to get 

permission for new out-of-town stores, because of the environmental 

damage caused by building on greenfield sites with poor or no public 

transport links. Denied easy greenfield expansion, Tesco and Sainsbury’s, in 

particular, opted for growth based on smaller urban and convenience 

formats, which accords well with the needs of an ageing population in a 

world of escalating transport costs. 

ECONOMIC FACTORS 

Constraints on income growth favour the expansion of supermarkets’ 

services, because the buying power of the large multiples enables them to 

offer competitive prices. 

The Family Spending data for 2005/2006, published by National Statistics, 

shows that in the three lowest deciles, consumer spending tends to exceed 

income. When all outgoings, including pension contributions, savings, 

investments, deductions from wages, etc. are included, deficits are far from 

unusual almost to the top of the income scale. 

The data in Table 8 highlight the financial tightrope along which the majority 

of households walk. 



PEST Analysis 

Table 8: UK Household Income and Expenditure 

by Gross Income Decile Group (£ and %), 2005/2006 

Gross 

Income 

Average Weekly 

Household Expenditure 

† Range 

(£ per week) 

Mid-Point 

(£ per week) 

‡ Consumer Spending 

(£ per week) 

Consumer Spending 

as a % of 

Mid-Point of 

Income Band 

‡ Total Spending 

(£ per week) 

Total Spending 

as a % of 

Mid-Point of 

Income Band 

Gross Income 

Decile Group 

Lowest up to 134 n.a. 154 n.a. 160 n.a. 

Second 135-205 170 179 105 237 140 

Third 206-280 243 265 109 323 133 

Fourth 281-363 322 310 96 372 116 

Fifth 364-472 418 357 85 442 106 

Sixth 473-595 534 435 81 581 109 

Seventh 596-730 663 479 72 673 102 

Eighth 731-914 823 584 71 861 105 

Ninth 915-1,223 1,069 683 64 1,056 99 

Highest 1,224+ n.a. 990 n.a. 1,708 n.a. 

† — not equivalised 

n.a. — not available 

‡ — figures have been rounded to the nearest pound 

Consumer spending: commodities; services; housing (mortgage interest payments, 

council tax, etc.); licences, fines and transfers; holiday spending; and money transfers 

and credit. 

Total spending: consumer spending (see above); pension fund contributions; other 

insurance, including friendly societies; income tax (payments less refunds); National 

Insurance contributions; purchase or alteration of dwellings; mortgages; savings and 

investments; pay off loan to clear other debt; and windfall receipts from gambling, etc.. 

Source: Family Spending 2005/2006, National Statistics © Crown copyright 

material is reproduced with the permission of the Controller of HMSO 

(and the Queen’s Printer for Scotland)/Key Note 


PEST Analysis 


Current levels of debt are so high that widespread defaults would damage 

the whole economy. A credit squeeze would, of course, restrict consumers’ 

discretionary spending. Outstanding loans secured on dwellings rose by 

11.3% between the second quarters of 2006 and 2007. The amount of 

consumer credit and other personal-sector borrowing outstanding increased 

by only 1%, reflecting lenders’ rising reluctance to make advances. The total 

amount outstanding was still 9.5% higher at the end of the second quarter of 

2007, compared with a year earlier. Static property prices in autumn 2007 

mean that it will be harder for consumers to rely on their homes as a 

constantly increasing source of new finance. 

Table 9: Loans Secured on Dwellings, Consumer Credit and 

Other Personal Sector Borrowing by Amounts Outstanding 

(£bn and index second quarter 2006=100), Second Quarter 

2006-Second Quarter 2007 

Consumer Credit 

and Other 

Loans Secured 

on Dwellings 

Personal-Sector 

Borrowing 

Total Amount 

Outstanding 

Amount 

Outstanding (£bn) 

Index 

(Q2 2006=100) 

Amount 


Index 

(Q2 2006=100) 

Amount 


Index 

(Q2 2006=100) 

2006 

Q2 1,015.793 100.0 211.759 100.0 1,227.552 100.0 

Q3 1,049.205 103.3 212.318 100.3 1,261.523 102.8 

Q4 1,078.752 106.2 212.859 100.5 1,291.611 105.2 

2007 

Q1 1,101.482 108.4 212.912 100.5 1,314.394 107.1 

Q2 1,130.346 111.3 213.847 101.0 1,344.193 109.5 

Q — Quarter 

Note: consumer credit figures are not seasonally adjusted. Figures are as the end of the 

period. 

Source: Financial Statistics No.547, November 2007 (Tables 3.2B and 3.2C), 

National Statistics © Crown copyright material is reproduced with the permission 

of the Controller of HMSO (and the Queen’s Printer for Scotland) 



PEST Analysis 

Research by YouGov for debt consultancy Thomas Charles, published in 

August 2007, found that 8.2 million British adults are in serious debt, with 

unsecured loans exceeding £10,000, and that 2.1 million are struggling to 

keep up their repayments. In 2007, there are around 49.4 million people in 

the UK aged 16 and over, so problematic debt is commonplace. The total 

amount of unsecured debt outstanding at the end of June 2007 worked out 

at £8,300 per household, and secured debt averaged £43,800, a total of 

£52,100. 

Credit reference agency Experian has ranked towns and cities by the amounts 

of financial stress inhabitants are under. Manchester came top, followed by 

Glasgow, Nottingham, Knowsley, Middlesbrough and Kingston-upon-Hull. 

Individual voluntary arrangements (IVAs), under which creditors and debtors 

agree part repayments, are most prominent in southern England, in 

expensive areas such as Aldershot, Andover and Newbury, the top three 

towns for IVAs, according to Experian. The first three for bankruptcies are 

Torquay, Kingston-upon-Hull and Plymouth. Both Torquay and Plymouth are 

rather a surprise, but one explanation could be their popularity with poorly 

capitalised sole traders serving the seasonal tourism industry. The next three 

in the bankruptcy list (Bournemouth, Eastbourne and Newton Abbot) are also 

tourist destinations. 

Debt levels have a national impact on consumers’ capacity to spend at a time 

of rising interest rates, with marked regional black zones of financial 

hardship, pockets of debt defaulters in affluent towns of southern England 

and bankrupt small businesses in holiday towns as well as in areas of financial 

stress, such as Kingston-upon-Hull. The detailed debt data, as well as HM 

Revenue & Customs statistics on personal incomes, influence the types, 

formats and product and service ranges that supermarket multiples offer 

from site to site. 

SOCIAL FACTORS 

The UK’s work culture of long hours reduces the time available for household 

management activities, including shopping for essentials. Time poverty is set 

to remain for the foreseeable future, and will intensify as women are 

required to delay retirement from 60 to 65. 

The ageing population poses a number of challenges to supermarkets. Older 

shoppers who are still in work will want the shopping experience to be as fast 

as possible. In general, the elderly often want easy access by walking or public 

transport, large print, wide aisles, excellent lighting and plenty of staff to 

offer help. The ageing population profile also creates opportunities for staff 

of more mature years who can relate well to shoppers aged 70-plus. By 2017, 

13.5% of the population are expected to be over 70, while only 11.1% are 

likely to be aged under 10. Local convenience stores offering post office 

counters, bill-paying services, dry cleaning, film and digital photograph 

processing and similar everyday services should be popular with elderly 

shoppers. 


PEST Analysis 


Table 10: The Forecast UK Population by Age (000), 2007-2017 

2007 2009 2011 2013 2015 2017 

0-4 3,511 3,521 3,493 3,498 3,524 3,556 

5-9 3,435 3,408 3,488 3,546 3,518 3,509 

10-14 3,710 3,625 3,518 3,417 3,459 3,542 

15-19 3,997 3,937 3,823 3,735 3,645 3,516 

20-24 4,059 4,193 4,241 4,218 4,142 4,030 

25-29 3,930 4,079 4,188 4,358 4,422 4,463 

30-34 3,878 3,790 3,936 4,104 4,226 4,361 

35-39 4,542 4,330 4,058 3,825 3,885 4,055 

40-44 4,713 4,687 4,593 4,444 4,200 3,907 

45-49 4,259 4,467 4,630 4,666 4,590 4,490 

50-54 3,740 3,882 4,083 4,289 4,494 4,595 

55-59 3,752 3,602 3,597 3,713 3,877 4,086 

60-64 3,500 3,719 3,756 3,503 3,442 3,508 

65-69 2,712 2,848 3,066 3,455 3,560 3,421 

70-74 2,375 2,463 2,484 2,555 2,721 3,072 

75-79 1,972 1,987 2,021 2,104 2,184 2,202 

80-84 1,455 1,468 1,510 1,550 1,587 1,656 

85-89 864 932 927 941 979 1,027 

90-94 320 310 376 425 443 457 

95-99 84 89 91 86 103 125 

100+ 11 12 14 15 16 16 

Total 60,821 61,351 61,892 62,448 63,016 63,592 

Note: totals may not sum due to rounding. 

Source: Government Actuary’s Department, 2004-Based Population 

Projections © Crown copyright 

The population profile is changing because alongside immigration, there is 

heavy emigration of British citizens (380,000 in 2005) to countries such as 

Australia and France. The changing ethnic mix, although a politically sensitive 

topic, makes new demands on society, including the retail sector. 



PEST Analysis 

TECHNOLOGICAL FACTORS 

Contact-centre and broadband technologies are at the heart of the growth in 

home shopping and home delivery services. Contact centres and Internet 

connections have improved substantially since 2000, turning online shopping 

into a more reliable and faster experience. 

The long-term value of database technologies and data mining to provide 

information about customers is debatable, because people’s habits change, 

many are wary of surveillance and are not that pleased to receive targeted 

special offers. Tesco has maintained its Clubcard operation, which supports 

the development of cross-selling, and the Co-operative Group tracks 

members’ spending to work out dividend payments. However, Sainsbury’s has 

opted to be just a contributor to the Nectar Card scheme and ASDA avoids 

loyalty inducements, instead relying on low prices. Morrisons has a loyalty 

card, but only for its fuel sales, giving money-off vouchers for shopping in 

Morrisons stores. Therefore, although the technology exists to build huge 

databases about every card-carrying customer, it is not always cost-effective 

to use. 

Cashless shopping using card-reader technology is often slower than using 

money, as cards have to be swiped and verified. Midcounties Co-operative has 

a trial of biometric fingerprint readers linked to shoppers’ bank accounts. 

Shoppers put their finger on a reader and their account is debited. The 

system, called Pay by Touch, sounds attractive, but may be off-putting for 

nervous or elderly customers who like to keep track of their cash as they 

spend it. While cashless shopping is a service for some shoppers, for others 

it is an imposition. 

KEY POINTS 

• The Competition Commission was deliberating over supermarkets at the 

time this report was published (December 2007) and is not obliged to report 

until 8th May 2008. The initial thinking from the Commission seemed to 

suggest that provided a supermarket multiples’ buying power was not so 

overwhelming as to constitute a near-monopoly, it should be free to 

continue expansion. 

• Constraints on income growth favour supermarkets because of their buying 

power, enabling them to provide low prices. Among the 30% of households 

with the lowest incomes, consumer spending often exceeds income. 

• Households carry a huge debt burden that would be unsustainable if there 

were a prolonged fall in the prices of property. 


PEST Analysis 


• Time pressures on workers, extending up the age scale as more people work 

on beyond usual retirement ages, mean shopping has to be as fast and 

stress free as possible. 

• The changing ethnic and nationality profile requires supermarkets to 

reassess the products and services they offer. 

• An ageing population will be reluctant to keep pace with technological 

advances such as cashless shopping, but the database technology behind 

ventures such as Tesco’s Clubcard increases Tesco’s power as a trading portal 

and its opportunities for cross-selling. 



Consumer Dynamics 

13. Consumer Dynamics 

SUPERMARKETS PLEASE CUSTOMERS 

Supermarkets appear to be doing a good job for their customers. In Key 

Note’s consumer research, conducted by NEMS Market Research in July 2007, 

82.4% of respondents thought that supermarkets treated their customers 

fairly and 78.6% said that supermarkets saved them money. 76.1% agreed 

that supermarkets saved them time. On the other hand, less than a third 

(30.8%) thought that supermarkets treated their suppliers fairly. However, 

these respondents may not be willing to pay a lot extra for their shopping to 

enable supermarkets to pay their suppliers more. 

62% of those surveyed believed that supermarkets encouraged them to 

overspend, yet 40.4% of respondents said that they would spend more in 

their favourite supermarket if it sold a wider range of goods and services. 

The proportion of respondents buying supermarket services was much lower 

than those buying food and household goods. Just 6.7% of respondents had 

not bought anything from a supermarket in the previous 6 months. However, 

despite the frequency of supermarket shopping, only 10.2% had a credit card 

issued by a supermarket, 6.3% subscribed to a supermarket Internet service 

provider (ISP), 3.8% had a supermarket mobile telephone service and 4.9% 

had motor insurance from a supermarket. 

Obtaining cashback from the till was popular among respondents — 49.1% 

had received cashback within the preceding 6 months. 28.5% of those 

surveyed had eaten in a supermarket café during the previous 6 months and 

18.6% had had a prescription dispensed in a supermarket pharmacy, but only 

3.3% had taken anything to be dry cleaned in a supermarket. Shopping direct 

from supermarkets’ websites also remained a minority activity, with just 

16.4% having done so over the previous 6 months. 

THE FINDINGS 

“In the Past 6 Months I Have Not Bought Anything from 

a Supermarket” 

Overall, 6.7% had not bought anything in a supermarket in the 6 months 

prior to interview. Respondents who had not bought anything from a 

supermarket in the past 6 months were more likely to be female (8.8%) than 

male (4.6%), and in social grades B and C1 (7.9% and 7.5%, respectively). 

The separated (20.7%), those living with children aged 5 to 9 (14.4%) and 

respondents living in East Anglia (23.7%) and the West Midlands (10.4%) 

were also more likely to agree with the statement. 




Table 11: Use of Supermarkets (% of respondents), 2007 

S1: “In the past 6 months I have not bought anything from a supermarket.” 

Sample 

S1 

Profile % PP % Pen % 

All 100.0 100.0 6.7 

Sex 

Male 50.4 34.8 4.6 

Female 49.6 65.2 8.8 

Age 

16-19 7.4 7.4 6.7 

20-24 7.8 0.0 0.0 

25-34 17.6 11.4 4.4 

35-44 18.4 26.6 9.7 

45-54 16.3 16.6 6.8 

55-64 13.1 13.2 6.7 

65+ 19.5 24.8 8.6 

Social Grade 

A 6.8 7.1 7.0 

B 14.8 17.3 7.9 

C1 26.7 29.8 7.5 

C2 40.6 38.6 6.4 

D 10.4 7.2 4.6 

E 0.7 0.0 0.0 

Working Status 

Full time (30+ hours a week) 42.9 34.7 5.4 

Part time 14.7 15.4 7.0 

Not working (excluding retired/invalid) 14.8 14.6 6.6 

Not working (retired/invalid) 27.3 35.2 8.7 








Sample 

S1 


Standard Region 

East Anglia 7.6 26.9 23.7 

East Midlands 6.2 2.1 2.3 

Greater London 13.6 8.8 4.3 

North 1.8 0.5 1.8 

North West 12.9 9.9 5.1 

Scotland 9.6 5.6 3.9 

South East 14.4 14.3 6.7 

South West 8.8 7.0 5.4 

Wales 6.1 7.0 7.7 

West Midlands 7.6 11.8 10.4 

Yorkshire/Humberside 11.3 6.0 3.6 

Size of Household 

One 21.4 20.6 6.5 

Two 31.9 32.8 6.9 

Three 17.2 15.3 6.0 

Four 21.3 23.9 7.5 

Five or more 7.4 5.1 4.6 

Marital Status 

Married/living as married 53.8 67.9 8.5 

Single 28.1 9.2 2.2 

Divorced 6.8 6.9 6.9 

Widowed 9.6 12.4 8.6 

Separated 1.2 3.7 20.7 

Presence of Children 

Aged 0-4 10.8 9.9 6.2 

Aged 5-9 10.7 23.0 14.4 

Aged 10-15 15.7 15.8 6.8 

No children 72.5 64.3 6.0 








Sample 

S1 


Tenure 

Own home outright 51.3 57.6 7.5 

Buying home 29.8 29.0 6.5 

Rent from the council 6.8 4.6 4.5 

Rent privately 8.6 8.2 6.4 

Rent-free occupancy 1.2 0.6 3.4 

Weighted sample: 1,004 Base: All adults aged 16+ 

PP = Purchasing Profile 

Pen = Penetration 

Note: sample and purchasing profile percentages may not sum to 100 due to rounding 

and/or because the figures shown exclude respondents who declined to answer or who 

replied ‘Don’t know’ when asked about their circumstances for the purposes of 

socio-demographic categorisation. 

Source: Key Note/NEMS Market Research, July 2007 

“Supermarkets Save Me Money” 

78.6% of those surveyed said that supermarkets saved them money. There 

was little difference between men and women in this respect. In terms of age, 

16 to 19 year-olds and 45 to 54 year-olds were the most convinced that 

supermarkets saved them money, with 20 to 24 year-olds, in particular, the 

least convinced. Respondents in social grades C2 and E were the most inclined 

to believe that supermarkets saved them money, as were people who were 

not working (excluding the retired/invalid), at 86.1%. In terms of region, the 

most sure that they saved money by shopping in supermarkets were those 

living in the East Midlands (92.3%) and the North (86.2%). 72.7% of 

respondents in East Anglia and 73.2% in Greater London thought that 

supermarkets saved them money. 




Table 12: Supermarkets Save Shoppers Money 

(% of respondents), 2007 

S2: “Supermarkets save me money.” 

Sample 

S2 


All 100.0 100.0 78.6 

Sex 

Male 50.4 50.9 79.3 

Female 49.6 49.1 78.0 

Age 

16-19 7.4 8.0 84.9 

20-24 7.8 6.5 65.7 

25-34 17.6 18.0 80.4 

35-44 18.4 17.1 73.0 

45-54 16.3 17.4 84.2 

55-64 13.1 12.8 76.6 

65+ 19.5 20.3 81.9 

Social Grade 

A 6.8 6.5 75.2 

B 14.8 14.6 77.9 

C1 26.7 25.5 75.2 

C2 40.6 42.8 83.0 

D 10.4 9.6 72.6 

E 0.7 0.9 100.0 



Part time 14.7 14.8 79.3 











Sample 

S2 



East Anglia 7.6 7.1 72.7 



North 1.8 1.9 86.2 

North West 12.9 13.4 81.5 

Scotland 9.6 10.4 84.7 

South East 14.4 13.8 75.6 

South West 8.8 8.5 75.5 

Wales 6.1 6.0 77.8 




One 21.4 21.0 77.3 

Two 31.9 32.0 78.8 

Three 17.2 17.8 81.5 

Four 21.3 21.2 78.2 

Five or more 7.4 7.5 79.8 



Single 28.1 28.5 79.8 

Divorced 6.8 6.2 72.5 

Widowed 9.6 10.0 81.5 

Separated 1.2 1.4 91.2 


Aged 0-4 10.8 11.5 84.0 

Aged 5-9 10.7 9.7 71.1 

Aged 10-15 15.7 15.3 76.5 

No children 72.5 72.4 78.5 









Sample 

S2 


Tenure 














“Supermarkets Save Me Time” 

76.1% of respondents said that supermarkets saved them time — almost 

as many as stated that supermarkets saved them money. Those who 

particularly valued supermarkets for their time-saving properties included 

25 to 34 year-olds, at 87.5% (shoppers who often try to combine a job with 

looking after a home and family), those living in the North (83.2%) and the 

North West (85%) and in private rented accommodation (84.8%). The least 

likely to comment on supermarkets’ time-saving value included 16 to 19 

year-olds (62.5%, indicating that they are not overburdened with demands 

on their time), those residing in the South West (64.3%) and those living in 

rent-free accommodation (54%), although the latter socio-demographic 

category accounted for just 1.2% of the total sample. 




Table 13: Supermarkets Save Time (% of respondents), 2007 

S3: “Supermarkets save me time.” 

Sample 

S3 


All 100.0 100.0 76.1 

Sex 

Male 50.4 51.6 77.9 

Female 49.6 48.4 74.2 

Age 

16-19 7.4 6.0 62.5 

20-24 7.8 8.0 78.0 

25-34 17.6 20.2 87.5 

35-44 18.4 17.5 72.3 

45-54 16.3 17.3 80.6 

55-64 13.1 12.8 74.3 

65+ 19.5 18.2 71.1 

Social Grade 

A 6.8 6.7 74.9 

B 14.8 15.1 77.7 

C1 26.7 26.1 74.4 

C2 40.6 41.6 78.0 

D 10.4 9.7 71.1 

E 0.7 0.7 78.4 



Part time 14.7 14.7 76.1 










Sample 

S3 






North 1.8 1.9 83.2 

North West 12.9 14.5 85.0 

Scotland 9.6 10.5 82.9 

South East 14.4 14.8 78.6 

South West 8.8 7.5 64.3 

Wales 6.1 6.0 75.0 




One 21.4 20.7 73.7 

Two 31.9 32.1 76.5 

Three 17.2 16.1 71.5 

Four 21.3 23.3 83.4 

Five or more 7.4 7.0 72.0 



Single 28.1 28.1 76.1 

Divorced 6.8 6.7 75.1 

Widowed 9.6 9.0 71.3 

Separated 1.2 1.1 71.9 


Aged 0-4 10.8 11.5 80.9 

Aged 5-9 10.7 10.7 76.2 

Aged 10-15 15.7 14.8 71.6 

No children 72.5 72.3 75.9 








Sample 

S3 


Tenure 














“Supermarkets Treat their Customers Fairly” 

82.4% of respondents thought that supermarkets treated their customers 

fairly. There was broad agreement across the socio-demographic groups, 

from a peak of 96.9% among those living in the North, down to 64.5% of 

respondents who were separated. Among those in social grade A, less than 

three-quarters (72.6%) accepted that supermarkets treated customers fairly, 

possibly indicating that they were demanding shoppers. 




Table 14: Attitudes Towards Supermarkets’ Treatment 

of Customers (% of respondents), 2007 

S4: ”Supermarkets treat their customers fairly.” 

Sample 

S4 


All 100.0 100.0 82.4 

Sex 

Male 50.4 50.4 82.3 

Female 49.6 49.6 82.4 

Age 

16-19 7.4 7.3 81.8 

20-24 7.8 8.4 89.0 

25-34 17.6 18.1 85.0 

35-44 18.4 17.7 79.4 

45-54 16.3 16.4 83.1 

55-64 13.1 12.4 78.1 

65+ 19.5 19.6 82.8 

Social Grade 

A 6.8 6.0 72.6 

B 14.8 14.7 82.0 

C1 26.7 26.3 81.2 

C2 40.6 41.1 83.3 

D 10.4 11.1 88.0 

E 0.7 0.8 89.8 



Part time 14.7 15.6 87.6 











Sample 

S4 






North 1.8 2.1 96.9 

North West 12.9 13.5 86.2 

Scotland 9.6 9.8 84.1 

South East 14.4 14.4 82.6 

South West 8.8 9.0 83.9 

Wales 6.1 5.8 78.7 




One 21.4 22.1 85.3 

Two 31.9 30.8 79.4 

Three 17.2 17.0 81.5 

Four 21.3 22.3 86.4 

Five or more 7.4 7.5 82.8 



Single 28.1 29.5 86.3 

Divorced 6.8 7.0 84.8 

Widowed 9.6 9.4 80.9 

Separated 1.2 0.9 64.5 


Aged 0-4 10.8 11.6 88.4 

Aged 5-9 10.7 10.5 81.0 

Aged 10-15 15.7 15.6 81.7 

No children 72.5 72.0 81.9 









Sample 

S4 


Tenure 














“Supermarkets Treat their Suppliers Fairly” 

Supermarkets have succeeded in providing goods and services at prices that 

most shoppers see as fair, but the other side to this is a squeeze on suppliers. 

Less than a third (30.8%) of those surveyed believed that supermarkets 

treated their suppliers fairly. This is a difficult issue for supermarket operators 

— while customers would appreciate a fairer deal for suppliers, they would 

not necessarily relish the higher prices that would result. 

Fewer men than women thought that supermarkets treated suppliers fairly 

(at 29.1% and 32.5%, respectively). 46.8% of 16 to 19 year-olds and 47.1% of 

20 to 24 year-olds believed that supermarkets treated suppliers fairly, 

compared with 22.7% of 55 to 64 year-olds and 25.4% of 45 to 54 year-olds. 

There was a tendency for the higher social grades to criticise supermarkets 

over their treatment of suppliers. Just 19.8% of the As and 22.8% of the Bs 

accepted that supermarkets’ treatment of suppliers was fair, compared with 

42.4% of Ds. However, the trend is upset by the fact that none of the Es 

thought that suppliers were treated fairly, but it should be noted that 

respondents in this social grade accounted for just 0.7% of the total sample. 




The most marked regional differences were in Yorkshire/Humberside, where 

41.2% said that supermarkets treated suppliers fairly, and the West Midlands, 

where only 18.9% were of this opinion. 28.1% of outright homeowners 

agreed that supermarkets treated suppliers fairly, compared with 49.2% of 

those in rent-free accommodation and 50.3% of those in council 

accommodation. 


of Suppliers (% of respondents), 2007 

S5: “Supermarkets treat their suppliers fairly.” 

Sample 

S5 


All 100.0 100.0 30.8 

Sex 

Male 50.4 47.7 29.1 

Female 49.6 52.3 32.5 

Age 

16-19 7.4 11.2 46.8 

20-24 7.8 11.9 47.1 

25-34 17.6 15.0 26.3 

35-44 18.4 18.9 31.7 

45-54 16.3 13.5 25.4 

55-64 13.1 9.7 22.7 

65+ 19.5 19.8 31.3 

Social Grade 

A 6.8 4.4 19.8 

B 14.8 10.9 22.8 

C1 26.7 32.4 37.3 

C2 40.6 37.9 28.8 

D 10.4 14.4 42.4 

E 0.7 0.0 0.0 



Part time 14.7 17.7 37.1 











Sample 

S5 






North 1.8 2.0 33.9 

North West 12.9 11.3 26.9 

Scotland 9.6 11.9 37.9 

South East 14.4 15.8 33.9 

South West 8.8 7.7 26.8 

Wales 6.1 5.0 25.0 




One 21.4 20.0 28.8 

Two 31.9 27.1 26.2 

Three 17.2 20.3 36.4 

Four 21.3 24.8 35.8 

Five or more 7.4 7.2 29.9 



Single 28.1 35.9 39.3 

Divorced 6.8 6.9 31.2 

Widowed 9.6 9.3 29.8 

Separated 1.2 0.8 20.4 


Aged 0-4 10.8 13.3 37.9 

Aged 5-9 10.7 11.5 33.1 

Aged 10-15 15.7 16.3 32.0 

No children 72.5 69.7 29.6 









Sample 

S5 


Tenure 














“Supermarkets Encourage Me to Spend Too Much” 

Supermarkets need customers to indulge in some impulse shopping, as profit 

margins on luxuries are generally higher than on staples. 62% of respondents 

said that supermarkets encouraged them to spend too much. This applied 

especially to women, 68.7% of whom felt that supermarkets encouraged 

them to spend too much, compared with 55.4% of men. It may be that 

female respondents were more conscious of their budgets and more aware 

when they exceeded them. Agreement with the statement was lowest among 

the divorced (47.7%) and highest among those living with children aged 5 to 

9 (82.8%), i.e. those living with children who are old enough to pester. 




Table 16: Supermarkets Encourage Overspending 


S6: “Supermarkets encourage me to spend too much.” 

Sample 

S6 


All 100.0 100.0 62.0 

Sex 

Male 50.4 45.1 55.4 

Female 49.6 54.9 68.7 

Age 

16-19 7.4 6.6 55.6 

20-24 7.8 9.6 76.6 

25-34 17.6 18.2 64.4 

35-44 18.4 19.7 66.4 

45-54 16.3 16.3 62.1 

55-64 13.1 13.2 62.7 

65+ 19.5 16.3 51.7 

Social Grade 

A 6.8 6.5 58.9 

B 14.8 14.9 62.6 

C1 26.7 25.8 59.8 

C2 40.6 42.1 64.4 

D 10.4 10.1 60.3 

E 0.7 0.6 54.2 



Part time 14.7 16.3 68.7 











Sample 

S6 






North 1.8 1.7 59.8 

North West 12.9 12.5 60.0 

Scotland 9.6 11.2 72.2 

South East 14.4 14.0 60.3 

South West 8.8 8.5 59.7 

Wales 6.1 6.2 62.8 




One 21.4 18.8 54.4 

Two 31.9 30.1 58.5 

Three 17.2 17.1 61.9 

Four 21.3 25.1 73.1 

Five or more 7.4 8.7 72.5 



Single 28.1 26.1 57.6 

Divorced 6.8 5.2 47.7 

Widowed 9.6 7.9 50.7 

Separated 1.2 1.5 77.0 


Aged 0-4 10.8 11.2 64.4 

Aged 5-9 10.7 14.3 82.8 

Aged 10-15 15.7 20.8 82.0 

No children 72.5 67.1 57.4 









Sample 

S6 


Tenure 














“I Would Spend More Money in my Favourite Supermarket 

if it Sold a Wider Range of Goods and Services” 

Although 62% of respondents said that they overspent in supermarkets, 

40.4% said that they would spend more in their favourite supermarket if it 

sold a wider range of goods and services from which to choose. The under-25s 

would be strongly tempted to spend more: 67.8% of 16 to 19 year-olds and 

64.6% of 20 to 24 year-olds agreed with the statement. These tend to be 

people without substantial financial responsibilities for families. 

The least inclined to spend any more included the over-65s (22.5%), those in 

social grade E (21.6%), those not working (retired/invalid — 24.5%) and 

people living in East Anglia (22.3%). 

Looking at social grade A, 42.7% said that they would spend more in their 

favourite supermarket if it sold a wider range of goods and services, as would 

39.3% of Bs. There was little difference between the social grades in this 

respect with the exception of Es, who were only half as likely as the others to 

be prepared to spend more. 




Table 17: A Wider Range of Goods and Services Would 

Encourage More Shopping (% of respondents), 2007 

S7: “I would spend more money in my favourite supermarket if it sold a wider range of 

goods and services.” 

Sample 

S7 


All 100.0 100.0 40.4 

Sex 

Male 50.4 50.9 40.8 

Female 49.6 49.1 40.0 

Age 

16-19 7.4 12.4 67.8 

20-24 7.8 12.5 64.6 

25-34 17.6 19.7 45.3 

35-44 18.4 19.6 43.1 

45-54 16.3 15.5 38.4 

55-64 13.1 9.5 29.4 

65+ 19.5 10.8 22.5 

Social Grade 

A 6.8 7.2 42.7 

B 14.8 14.4 39.3 

C1 26.7 24.8 37.4 

C2 40.6 42.1 41.9 

D 10.4 11.2 43.5 

E 0.7 0.4 21.6 



Part time 14.7 15.6 42.8 












Sample 

S7 






North 1.8 2.2 50.1 

North West 12.9 13.8 43.2 

Scotland 9.6 10.4 43.7 

South East 14.4 12.5 35.1 

South West 8.8 7.8 35.5 

Wales 6.1 5.9 39.0 




One 21.4 16.3 30.8 

Two 31.9 25.0 31.7 

Three 17.2 21.7 51.0 

Four 21.3 28.0 53.2 

Five or more 7.4 8.6 47.0 



Single 28.1 33.9 48.7 

Divorced 6.8 5.0 29.7 

Widowed 9.6 7.1 29.8 

Separated 1.2 1.5 51.3 


Aged 0-4 10.8 14.0 52.4 

Aged 5-9 10.7 12.9 48.7 

Aged 10-15 15.7 20.4 52.5 

No children 72.5 64.9 36.2 










Sample 

S7 


Tenure 














“Within the Past 6 Months I Have Obtained Cashback from 

a Supermarket Checkout” 

49.1% of respondents had obtained cashback from a supermarket checkout 

in the 6 months before they were interviewed. Women, the under-55s and 

ABC1s were more likely than men, the over-55s and those in social grades C2, 

D and E to have used a supermarket’s cashback facility. 

Respondents living in the North (63.8%) and Greater London (62%), in a 

household of five or more people (67.6%), buying a home (62%) and the 

separated (67.2%) were also more likely to have obtained cash in this way. 

Among the over-65s, only 35.7% had obtained cashback at a supermarket 

checkout during the previous 6 months. Other respondents less likely to have 

used this facility included those not working (retired/invalid — 37.8%), the 

divorced (33.5%), the widowed (36.7%) and people living in council-owned 

accommodation (34.8%) or rent-free occupancy (26.8%). 






S8: “Within the past 6 months I have obtained cashback from a supermarket checkout.” 

Sample 

S8 


All 100.0 100.0 49.1 

Sex 

Male 50.4 45.7 44.5 

Female 49.6 54.3 53.8 

Age 

16-19 7.4 8.7 57.7 

20-24 7.8 9.1 57.3 

25-34 17.6 20.0 55.9 

35-44 18.4 20.1 53.6 

45-54 16.3 17.5 52.7 

55-64 13.1 10.5 39.2 

65+ 19.5 14.2 35.7 

Social Grade 

A 6.8 6.9 50.0 

B 14.8 15.9 52.8 

C1 26.7 30.6 56.3 

C2 40.6 37.0 44.7 

D 10.4 9.0 42.3 

E 0.7 0.6 41.7 



Part time 14.7 18.3 60.9 











Sample 

S8 






North 1.8 2.3 63.8 

North West 12.9 12.3 46.7 

Scotland 9.6 8.4 42.9 

South East 14.4 15.3 52.2 

South West 8.8 9.3 51.5 

Wales 6.1 5.7 46.0 




One 21.4 18.2 41.8 

Two 31.9 30.0 46.2 

Three 17.2 17.3 49.5 

Four 21.3 24.1 55.7 

Five or more 7.4 10.2 67.6 



Single 28.1 30.2 52.8 

Divorced 6.8 4.6 33.5 

Widowed 9.6 7.2 36.7 

Separated 1.2 1.6 67.2 


Aged 0-4 10.8 12.4 56.5 

Aged 5-9 10.7 12.0 55.0 

Aged 10-15 15.7 17.0 53.2 

No children 72.5 69.1 46.8 









Sample 

S8 


Tenure 














“I Have a Credit Card Issued by a Supermarket Bank” 

Overall, 10.2% of respondents had a supermarket credit card, which shows 

the extent to which supermarket financial services have become established 

in the market. There was virtually no difference between men (10.1%) and 

women (10.2%), but there were sharp differences in terms of social grade. 

None of those in social grade E said that they had a supermarket credit card, 

but 12.9% of As held one. These differences in credit-card possession reflect 

the general truth that money is lent to people who already have it. 

In terms of age, 25 to 34 year-olds were the most likely to have a supermarket 

credit card, with 13.8% claiming to hold one. Only 2.2% of 20 to 24 year-olds 

had such a card. Possession of a supermarket credit card was highest among 

respondents living in the South East (14.4%) and Yorkshire/Humberside 

(14.8%), closely followed by the West Midlands (13.4%). In Scotland, only 

2.4% of adults had a supermarket credit card, as did just 4.9% of those in 

the North. 






S9: “I have a credit card issued by a supermarket bank.” 

Sample 

S9 


All 100.0 100.0 10.2 

Sex 

Male 50.4 50.3 10.1 

Female 49.6 49.7 10.2 

Age 

16-19 7.4 6.9 9.6 

20-24 7.8 1.7 2.2 

25-34 17.6 23.8 13.8 

35-44 18.4 20.8 11.5 

45-54 16.3 17.1 10.7 

55-64 13.1 14.2 11.0 

65+ 19.5 15.5 8.1 

Social Grade 

A 6.8 8.6 12.9 

B 14.8 17.2 11.8 

C1 26.7 26.6 10.1 

C2 40.6 39.9 10.0 

D 10.4 7.7 7.6 

E 0.7 0.0 0.0 



Part time 14.7 9.9 6.9 











Sample 

S9 






North 1.8 0.9 4.9 

North West 12.9 14.4 11.3 

Scotland 9.6 2.3 2.4 

South East 14.4 20.3 14.4 

South West 8.8 7.8 9.0 

Wales 6.1 4.9 8.1 




One 21.4 22.2 10.6 

Two 31.9 28.7 9.1 

Three 17.2 18.4 10.9 

Four 21.3 23.4 11.2 




Single 28.1 19.3 7.0 

Divorced 6.8 8.8 13.2 

Widowed 9.6 6.2 6.6 

Separated 1.2 0.8 7.1 


Aged 0-4 10.8 13.1 12.4 

Aged 5-9 10.7 12.2 11.6 

Aged 10-15 15.7 23.0 14.9 

No children 72.5 62.7 8.8 









Sample 

S9 


Tenure 














“I Have Motor Insurance from a Supermarket” 

Motor insurance, a relatively straightforward financial service, was purchased 

from a supermarket by just 4.9% of respondents. Supermarket-sold policies 

were most popular with the under-25s (11.6% of 20 to 24 year-olds and 

13.9% of 16 to 19 year-olds) and with homebuyers (10.1%). They were very 

unpopular with 55 to 64 year-olds (1.4%), the divorced and widowed (both at 

0.6%), those living in single-person households (1.6%), respondents residing 

in the West Midlands and the East Midlands (at 0.8% and 1.8%, respectively), 

and those not working (the retired/invalid — 2.1%). None of those in social 

grade E, the separated or living in council accommodation had a supermarket 

motor insurance policy. 




Table 20: The Penetration of Supermarket-Branded 

Car Insurance (% of respondents), 2007 

S10: “I have motor insurance from a supermarket.” 

Sample S10 


All 100.0 100.0 4.9 

Sex 

Male 50.4 54.1 5.2 

Female 49.6 45.9 4.5 

Age 

16-19 7.4 21.0 13.9 

20-24 7.8 18.5 11.6 

25-34 17.6 13.8 3.8 

35-44 18.4 17.7 4.7 

45-54 16.3 15.0 4.5 

55-64 13.1 3.7 1.4 

65+ 19.5 10.2 2.5 

Social Grade 

A 6.8 4.8 3.4 

B 14.8 12.4 4.1 

C1 26.7 41.5 7.6 

C2 40.6 35.8 4.3 

D 10.4 5.5 2.6 

E 0.7 0.0 0.0 



Part time 14.7 24.9 8.2 











Sample S10 






North 1.8 2.4 6.6 

North West 12.9 11.4 4.3 

Scotland 9.6 8.8 4.5 

South East 14.4 17.5 5.9 

South West 8.8 7.3 4.0 

Wales 6.1 6.6 5.2 




One 21.4 7.2 1.6 

Two 31.9 26.4 4.0 

Three 17.2 22.9 6.5 

Four 21.3 32.6 7.5 

Five or more 7.4 10.8 7.1 



Single 28.1 50.6 8.8 

Divorced 6.8 0.8 0.6 

Widowed 9.6 1.2 0.6 



Aged 0-4 10.8 8.8 4.0 

Aged 5-9 10.7 6.4 2.9 

Aged 10-15 15.7 18.1 5.6 

No children 72.5 73.1 4.9 









Sample S10 


Tenure 














“I Have an Internet Service Provided by a Supermarket” 

The supermarket as an Internet service provider (ISP) is a logical commercial 

move, because home pages can flag up companies’ online products and 

services. However, among respondents to Key Note’s survey, supermarket 

ISPs were less popular than supermarket credit cards. Just 6.3% of the 

sample had a supermarket ISP, rising to 12.3% of 25 to 34 year-olds, 11.4% 

of those living in three-person households and 11% of respondents living in 

Yorkshire/Humberside. Supermarket ISPs were unpopular with the over-55s 

(just 1.4% of 55 to 64 year-olds and 2.8% of the over-65s had a supermarket 

ISP) and with those in social grade A, only 1.8% of whom admitted to having 

a supermarket ISP. 





by Supermarkets (% of respondents), 2007 

S11: “I have an Internet service provided by a supermarket.” 

Sample 

S11 


All 100.0 100.0 6.3 

Sex 

Male 50.4 53.7 6.7 

Female 49.6 46.3 5.9 

Age 

16-19 7.4 6.1 5.2 

20-24 7.8 9.3 7.5 

25-34 17.6 34.2 12.3 

35-44 18.4 18.6 6.4 

45-54 16.3 20.2 7.8 

55-64 13.1 2.8 1.4 

65+ 19.5 8.8 2.8 

Social Grade 

A 6.8 1.9 1.8 

B 14.8 22.4 9.5 

C1 26.7 29.6 7.0 

C2 40.6 28.7 4.4 

D 10.4 16.5 10.0 

E 0.7 0.9 7.9 



Part time 14.7 15.1 6.5 











Sample 

S11 






North 1.8 2.5 8.9 

North West 12.9 12.5 6.1 

Scotland 9.6 11.2 7.3 

South East 14.4 16.7 7.3 

South West 8.8 3.5 2.5 

Wales 6.1 4.1 4.2 




One 21.4 8.9 2.6 

Two 31.9 30.3 6.0 

Three 17.2 31.1 11.4 

Four 21.3 28.4 8.4 




Single 28.1 27.4 6.1 

Divorced 6.8 9.8 9.1 

Widowed 9.6 1.7 1.1 



Aged 0-4 10.8 7.4 4.3 

Aged 5-9 10.7 11.1 6.6 

Aged 10-15 15.7 22.4 9.0 

No children 72.5 67.4 5.9 









Sample 

S11 


Tenure 














“I Have a Mobile Phone Service Provided by a Supermarket” 

Supermarket mobile telephone services were even less popular than 

supermarket ISPs. Only 3.8% of the sample had a supermarket mobile 

telephone service, with penetration higher among men (5%) than women 

(2.6%). 16 to 19 year-olds were the most likely to subscribe to such a service, 

with 9.2% doing so. In terms of social grade, Ds were the most enthusiastic 

customers (9.2%). Just 1.7% of As admitted to using a supermarket mobile 

telephone service, which, like a supermarket ISP, conveys an image that is 

mass market rather than technologically elite. 




Table 22: The Penetration of Supermarket Mobile Telephone 

Services (% of respondents), 2007 

S12: “I have a mobile phone service provided by a supermarket.” 

Sample S12 


All 100.0 100.0 3.8 

Sex 

Male 50.4 66.3 5.0 

Female 49.6 33.7 2.6 

Age 

16-19 7.4 17.8 9.2 

20-24 7.8 0.0 0.0 

25-34 17.6 12.8 2.8 

35-44 18.4 12.2 2.5 

45-54 16.3 18.9 4.4 

55-64 13.1 15.7 4.6 

65+ 19.5 22.5 4.4 

Social Grade 

A 6.8 3.0 1.7 

B 14.8 8.9 2.3 

C1 26.7 26.0 3.7 

C2 40.6 37.1 3.5 

D 10.4 25.0 9.2 

E 0.7 0.0 0.0 



Part time 14.7 7.9 2.1 











Sample S12 






North 1.8 4.1 8.9 

North West 12.9 11.9 3.5 

Scotland 9.6 7.7 3.1 

South East 14.4 8.7 2.3 

South West 8.8 6.1 2.6 

Wales 6.1 1.6 1.0 




One 21.4 11.6 2.1 

Two 31.9 38.9 4.7 

Three 17.2 12.4 2.8 

Four 21.3 33.4 6.0 




Single 28.1 28.8 3.9 

Divorced 6.8 2.6 1.5 

Widowed 9.6 8.0 3.2 



Aged 0-4 10.8 6.5 2.3 

Aged 5-9 10.7 18.4 6.6 

Aged 10-15 15.7 21.4 5.2 

No children 72.5 70.0 3.7 









Sample S12 


Tenure 














“Within the Past 6 Months I Have Taken at Least One Item to be 

Dry Cleaned in a Supermarket” 

Supermarkets that do not provide a dry cleaning service are probably 

not depriving their customers of a valued service. Just 3.3% of respondents 

had taken an item to be dry cleaned in a supermarket during the 

previous 6 months. The use of this service was most popular among 

25 to 34 year-olds (4.8%), those in social grade B (5.5%), in full-time work 

(4.8%), living in a two- or four-person household (at 5.4% and 4.6%, 

respectively), and residing in the East Midlands (10.6%), Scotland (8.7%) 

or Yorkshire/Humberside (4.9%). 

The majority of respondents had not used a supermarket dry cleaning service 

during this time, including all of those in social grade E, those resident in 

East Anglia and the North, those living in households of five people or more, 

the separated, those with children aged 5 to 9 in their household and 

respondents living in rent-free accommodation. 






S13: “Within the past 6 months I have taken at least one item to be dry cleaned in a 

supermarket.” 

Sample S13 


All 100.0 100.0 3.3 

Sex 

Male 50.4 51.5 3.4 

Female 49.6 48.5 3.3 

Age 

16-19 7.4 4.5 2.0 

20-24 7.8 7.6 3.2 

25-34 17.6 25.2 4.8 

35-44 18.4 17.0 3.1 

45-54 16.3 14.8 3.0 

55-64 13.1 14.0 3.6 

65+ 19.5 16.9 2.9 

Social Grade 

A 6.8 8.2 4.0 

B 14.8 24.6 5.5 

C1 26.7 27.6 3.4 

C2 40.6 33.7 2.8 

D 10.4 5.9 1.9 

E 0.7 0.0 0.0 



Part time 14.7 1.7 0.4 












Sample S13 






North 1.8 0.0 0.0 

North West 12.9 5.7 1.5 

Scotland 9.6 25.2 8.7 

South East 14.4 9.2 2.1 

South West 8.8 4.7 1.8 

Wales 6.1 1.6 0.9 




One 21.4 8.4 1.3 

Two 31.9 51.6 5.4 

Three 17.2 10.8 2.1 

Four 21.3 29.3 4.6 




Single 28.1 31.2 3.7 

Divorced 6.8 5.7 2.8 

Widowed 9.6 0.9 0.3 



Aged 0-4 10.8 7.8 2.4 

Aged 5-9 10.7 0.0 0.0 

Aged 10-15 15.7 11.7 2.5 

No children 72.5 83.7 3.8 










Sample S13 


Tenure 














“Within the Past 6 Months I Have Eaten at Least One Meal 

in a Supermarket Café” 

28.5% of respondents had eaten at least one meal in a supermarket café in 

the past 6 months. Supermarket cafés were more popular with women 

(30.9%) than men (26.1%), although the margin of difference was not 

significant. 16 to 19 year-olds (41.4%), those living in households of five or 

more people (43.4%) and respondents residing in the North (45.3%) or 

Scotland (40.7%) were the most likely to have eaten in a supermarket café in 

the past 6 months. Respondents who were the least likely to have done so 

included those in social grade E (7.9%), people living in rent-free 

accommodation (14.4%) and those living in East Anglia (19.9%) and the East 

Midlands (19.6%). 




Table 24: Use of Supermarket Cafés (% of respondents), 2007 

S14: “Within the past 6 months I have eaten at least one meal in a supermarket café.” 

Sample S14 


All 100.0 100.0 28.5 

Sex 

Male 50.4 46.2 26.1 

Female 49.6 53.8 30.9 

Age 

16-19 7.4 10.7 41.4 

20-24 7.8 7.7 28.1 

25-34 17.6 16.2 26.3 

35-44 18.4 20.9 32.3 

45-54 16.3 17.6 30.6 

55-64 13.1 11.9 25.8 

65+ 19.5 15.1 22.0 

Social Grade 

A 6.8 6.4 26.6 

B 14.8 14.7 28.3 

C1 26.7 21.2 22.6 

C2 40.6 44.2 31.0 

D 10.4 13.3 36.3 

E 0.7 0.2 7.9 



Part time 14.7 16.6 32.2 










Sample S14 






North 1.8 2.8 45.3 

North West 12.9 14.8 32.6 

Scotland 9.6 13.8 40.7 

South East 14.4 12.7 25.2 

South West 8.8 6.7 21.7 

Wales 6.1 5.5 25.8 




One 21.4 21.3 28.3 

Two 31.9 28.2 25.2 

Three 17.2 20.2 33.4 

Four 21.3 19.1 25.5 

Five or more 7.4 11.3 43.4 



Single 28.1 30.3 30.7 

Divorced 6.8 7.1 29.7 

Widowed 9.6 9.0 26.6 

Separated 1.2 1.1 26.3 


Aged 0-4 10.8 11.7 30.8 

Aged 5-9 10.7 14.1 37.6 

Aged 10-15 15.7 20.1 36.5 

No children 72.5 67.2 26.4 








Sample S14 


Tenure 














“Within the Past 6 Months I Have had at Least One Prescription 

Dispensed from a Supermarket Pharmacy” 

18.6% of respondents had had a prescription dispensed from a supermarket 

pharmacy in the 6 months before they were interviewed. The differences 

between the social grades were greater than those between the age groups, 

in contrast to those using supermarket cafés. Only 14.9% of As had used a 

supermarket pharmacy for prescription medicine, compared with 33.8% of Es. 

In terms of age, the responses ranged from 11% of 20 to 24 year-olds to 

24.9% of 25 to 34 year-olds. 

Agreement with the statement was also higher among those living in 

households of five or more and with children aged 0 to 4 in their household. 




Table 25: Use of Supermarket Pharmacies 


S15: “Within the past 6 months I have had at least one prescription dispensed from a 

supermarket pharmacy.” 

Sample 

S15 


All 100.0 100.0 18.6 

Sex 

Male 50.4 48.3 17.8 

Female 49.6 51.7 19.4 

Age 

16-19 7.4 8.8 22.1 

20-24 7.8 4.6 11.0 

25-34 17.6 23.5 24.9 

35-44 18.4 18.1 18.3 

45-54 16.3 20.5 23.4 

55-64 13.1 9.5 13.5 

65+ 19.5 15.1 14.4 

Social Grade 

A 6.8 5.5 14.9 

B 14.8 15.9 20.0 

C1 26.7 25.4 17.7 

C2 40.6 39.6 18.2 

D 10.4 12.3 22.0 

E 0.7 1.3 33.8 



Part time 14.7 20.5 25.9 












Sample 

S15 






North 1.8 0.7 7.0 

North West 12.9 16.3 23.4 

Scotland 9.6 12.5 24.1 

South East 14.4 19.2 24.9 

South West 8.8 5.8 12.3 

Wales 6.1 7.4 22.6 




One 21.4 15.6 13.6 

Two 31.9 26.7 15.6 

Three 17.2 22.6 24.5 

Four 21.3 20.8 18.2 

Five or more 7.4 14.3 35.9 



Single 28.1 22.6 15.0 

Divorced 6.8 7.3 20.2 

Widowed 9.6 11.3 21.9 



Aged 0-4 10.8 17.4 30.1 

Aged 5-9 10.7 14.8 25.8 

Aged 10-15 15.7 22.1 26.2 

No children 72.5 61.2 15.7 










Sample 

S15 


Tenure 














“Within the Past 6 Months I Have Purchased Direct from a 

Supermarket Website” 

16.4% of respondents had shopped online from a supermarket’s website in 

the 6 months before interview. The respondents who were most likely to have 

shopped online were: 20 to 24 year-olds (34.9%) and 25 to 34 year-olds 

(27.1%); those in social grade B (25.1%) and A (22.3%); those not working 

(excluding the retired/invalid — 23.3%); those living in households of three or 

four people (23.1% and 28.8%, respectively); respondents with children in 

their household (24.9% with 0 to 4 year-olds, 22.9% with 5 to 9 year-olds and 

27.4% with 10 to 15 year-olds); and those buying a home (24%). Respondents 

living in the West Midlands had a higher-than-average level of agreement, at 

25.8%. There was a slight bias towards men (18.3%) over women (14.6%). 

The extension of online shopping to the majority of the population would 

require improved low-cost access to the Internet for people who do not have 

an Internet connection at home and encouragement for the elderly to 

become more familiar with the possibilities of the Internet. 




Table 26: Online Shopping with Supermarkets 


S16: “Within the past 6 months I have purchased direct from a supermarket website.” 

Sample S16 


All 100.0 100.0 16.4 

Sex 

Male 50.4 56.0 18.3 

Female 49.6 44.0 14.6 

Age 

16-19 7.4 8.2 18.3 

20-24 7.8 16.6 34.9 

25-34 17.6 28.9 27.1 

35-44 18.4 25.8 23.0 

45-54 16.3 11.6 11.7 

55-64 13.1 6.4 8.0 

65+ 19.5 2.6 2.2 

Social Grade 

A 6.8 9.3 22.3 

B 14.8 22.6 25.1 

C1 26.7 25.1 15.5 

C2 40.6 34.4 13.9 

D 10.4 8.2 13.0 

E 0.7 0.3 7.9 



Part time 14.7 15.7 17.5 











Sample S16 






North 1.8 0.8 7.4 

North West 12.9 9.2 11.6 

Scotland 9.6 7.8 13.2 

South East 14.4 16.7 19.1 

South West 8.8 6.4 11.9 

Wales 6.1 5.1 13.7 




One 21.4 5.3 4.1 

Two 31.9 26.5 13.6 

Three 17.2 24.2 23.1 

Four 21.3 37.4 28.8 

Five or more 7.4 5.8 12.9 



Single 28.1 33.8 19.7 

Divorced 6.8 4.4 10.6 

Widowed 9.6 0.9 1.6 



Aged 0-4 10.8 16.3 24.9 

Aged 5-9 10.7 14.9 22.9 

Aged 10-15 15.7 26.2 27.4 

No children 72.5 56.8 12.9 









Sample S16 


Tenure 














KEY POINTS 

• Just 6.7% of respondents had not shopped in a supermarket in the 

6 months before they were interviewed. Respondents were generally 

complimentary about supermarkets, with around three-quarters saying that 

supermarkets saved them money and time. 

• The large majority of respondents felt that supermarkets treated them 

fairly, although those in social grade A were more sceptical than other 

groups. However, only three people in ten accepted that supermarkets 

treated suppliers fairly. The most critical included older and more affluent 

shoppers, people with the potential capacity to pay a little more for their 

supermarket purchases. 

• More than six people in ten reported that supermarkets encouraged them 

to overspend, but four in ten, and a considerably higher proportion of the 

under-25s, would actually increase their spending in their favourite 

supermarket if it provided a wider range of goods and services. 




• Half of those surveyed had received cashback at a supermarket checkout in 

the past 6 months, and one in ten had a supermarket-issued credit card. 

Both of these factors highlight supermarkets’ importance in financial 

services. Supermarket motor insurance, held by one person in 20 overall, 

was most popular among young drivers. 

• Fewer than one in 50 respondents in social grade A admitted to having a 

supermarket ISP, compared with one person in 16 overall. Supermarket 

mobile telephone services are also a small niche, with 16 to 19 year-olds, in 

particular, appearing to be prepared to use a supermarket network. 

• Supermarket cafés, like mobile telephone services, were relatively popular 

with respondents aged 16 to 19. 

• Respondents in social grade E were significantly more likely to have had a 

prescription dispensed at a supermarket pharmacy in the past 6 months. 

• Online supermarket shopping has made headway with the under-45s, 

especially among those in social grades A and B, but older shoppers and 

those in the lower social grades lagged a long way behind. 

• The services provided by supermarkets have strong appeal to young people, 

especially the under-20s, who as they age may continue to buy a wide range 

of services from the providers of their groceries and household products. 

At present, older and more affluent people appear to have a tendency to 

regard supermarkets’ services as lacking something in prestige. The case of 

online shopping is different, in that, although this is most popular with 

higher-income shoppers, their core purchases would tend to be traditional 

supermarket items. 



Company Profiles 

14. Company Profiles 

THE ‘BIG FOUR’ 

The supermarkets market is highly concentrated and led by the ‘big four’ — 

Tesco, ASDA, Sainsbury’s and Morrisons — which between them accounted 

for 75.3% of consumer spending on groceries in Great Britain in the 12 weeks 

ending 4th November 2007. 

The Co-operatives, Somerfield and Waitrose are significant, but all had 

market shares of less than 5% in the 12 weeks to 4th November 2007. 

Discount chains Aldi, Lidl and Netto are focused on low price rather than on 

the range of goods and services, and had a combined market share of 5.6% 

during this period. 

Consumers’ spending in supermarkets rose by 4.8% between the 12 weeks to 

5th November 2006 and the 12 weeks to 4th November 2007, to £18.95bn. 

Tesco remained dominant and increased its market share by 0.4 percentage 

points to 31.5%. The other multiples that expanded their share were 

Sainsbury’s, Waitrose, Aldi, Lidl and Iceland. Aldi and Lidl (discount chains) are 

increasing shopper numbers as a result of new store openings. Iceland 

shoppers are spending more per head, pointing to a successful mix of 

products and pricing. Morrisons, the co-operatives and Somerfield all lost 

market share, as did other independent outlets. 


12 Weeks to 4th November 2007 

Percentage 

Point 

12 Weeks to Change in 

4th November 2007 

Market 

Consumer % of % Change Share 

Spend (£m) Total from † 2006 from † 2006 

Tesco 5,966.956 31.5 6.1 0.4 

ASDA 3,166.816 16.7 4.9 0.0 

Sainsbury’s 3,030.438 16.0 5.5 0.1 

Morrisons 2,107.679 11.1 4.5 -0.1 

Co-operatives 825.273 4.4 1.0 -0.1 






12 Weeks to 4th November 2007 


Percentage 

Point 

12 Weeks to Change in 

4th November 2007 

Market 

Consumer % of % Change Share 

Spend (£m) Total from † 2006 from † 2006 

Somerfield 785.290 4.1 -3.6 -0.4 

Waitrose 750.400 4.0 6.5 0.1 

Aldi 493.687 2.6 8.1 0.1 

Lidl 424.416 2.2 10.3 0.1 

Iceland 313.026 1.7 9.4 0.1 

Symbol groups 181.771 1.0 8.1 0.1 

Netto 138.985 0.7 8.7 0.0 

Other multiples 442.720 2.3 -6.1 0.0 

Other 

independents 319.188 1.7 -4.5 -0.1 

Total ‡ 18,946.644 100.0 4.8 n.a. 

† — 12 weeks to 5th November 2006 

‡ — does not sum due to rounding 

n.a. — not available 

Note: Marks & Spencer is not included in this survey. 

Source: TNS Worldpanel, 13th November 2007 




TESCO PLC 

Corporate Strategy 

Tesco PLC, with 1,898 stores in the UK in the 2006/2007 financial year and 142 

more scheduled for opening in 2007/2008, has positioned itself as the supplier 

of choice for fast-moving goods and services to consumers. Regeneration 

schemes are part of this positioning, which has been very successful overall; 

for example, in the Failsworth district of Oldham near Manchester, a Tesco 

Extra store covering 88,000 square feet is at the heart of a regeneration 

project within the Government-sponsored Underserved Markets programme, 

which requires at least 20% of staff to be recruited from the local disabled 

population and the long-term unemployed. Tesco accomplished this with 

financial support from public agencies, averaging £1,000 per recruit, for extra 

training and help with interview skills. In the tradition of ‘planning gain’, 

Tesco rebuilt a nearby health centre. The services that the new Tesco provides 

have to be set against job losses in local small businesses that can no longer 

compete, but in the short term at least, shoppers benefit from lower prices 

and wider choice, under one roof. 

As at the end of the 2006/2007 financial year, Tesco stores in the UK 

numbered: 147 Extra stores; five Homeplus stores focusing on homewares; 

433 Superstores; 162 Metro supermarkets in town and city centres; and 

735 Express convenience stores, many of them sited with the 420 filling 

stations run by Tesco in the UK. In addition, Tesco had 506 outlets branded 

as One Stop. 

Tesco’s range of services makes it a one-stop shop for householders. Fuel, 

fixed-line telephone communications, mobile telephones, Internet service 

provision and Internet telephone all come with a Tesco branding. Tesco’s 

partnership with Royal Bank of Scotland (RBS) with Tesco Personal Finance 

has worked effectively for both organisations. 

Tesco has become a distribution specialist rather than a grocer or even a 

supermarket operator, with outlets ranging in size from small Tesco Express 

forecourt and local neighbourhood shops (many of them through T&S Stores, 

which Tesco acquired in January 2003) to Tesco Extra hypermarkets exceeding 

60,000 square feet. In between are Tesco Metro (7,000 to 15,000 square feet 

stores) and Tesco Superstore (20,000 to 50,000 square feet). 

Tesco’s loyalty card, Clubcard, was launched in 1995 and remains the premier 

loyalty card in the UK, used by around 11 million people. In February 2001, 

Tesco and Eastern Energy launched a promotion for Eastern customers to 

receive Clubcard points. By 2007, Tesco points could be amassed by customers 

of Powergen, Avis car hire, Johnsons dry cleaners, Marriott hotels, National 

tyres and autocare, and Nationwide Autocentres. 




Advertising 

Data from Nielsen Media Research (NMR) show that in the year ending June 

2007, Tesco spent more on main media advertising than any other 

supermarket company, although its expenditure was less than that by Marks 

& Spencer. Of Tesco’s total expenditure of £62.9m, 39.2% was for its product 

range, but there was also significant spending on food and drink, CDs, DVDs 

and clothing. The mobile telephone range was heavily promoted, receiving a 

spend of £2.8m, and £1.7m went into advertising the reuse of carrier bags. On 

the healthy lifestyle front, an expenditure of £2.7m supported a campaign for 

sport in schools and clubs. 

Profitability 

The pre-tax profit of £2.65bn for the year ending 24th February 2007, and a 

profit-to-sales ratio of 6.22%, shows just how dominant Tesco has become in 

UK distribution. A ratio of this order is high for supermarket retailing: 

Sainsbury’s figure for the year ending 24th March 2007 was 2.78% and 

Morrisons was 2.96% for the 53-week period ending 4th February 2007. 

Pre-tax profit increased by 18.7% in 2006/2007 and staff numbers rose by 

12.2% to 413,061. The average salary of £9,185 reflected the extent of 

part-time working. Turnover increased by only 8.1%, but this was more than 

Sainsbury’s or Morrisons for the equivalent financial year. 

Table 28: Financial Results for Tesco PLC 

(£000, number, % and £), Years Ending 26th February 2005, 

25th February 2006 and 24th February 2007 

2005 2006 2007 

Turnover (£000) 33,866,000 39,454,000 42,641,000 

Pre-tax profit (£000) 1,894,000 2,235,000 2,653,000 

Directors’ remuneration (£000) 31,902 17,070 25,507 

Employees’ remuneration (£000) 3,033,000 3,473,000 3,794,000 

Number of employees 335,750 368,213 413,061 

Profit/sales (%) 5.59 5.66 6.22 

Profit/capital employed (%) 13.08 14.86 15.93 

Profit/total assets (%) 9.40 9.91 10.69 

Current ratio 0.53 0.49 0.52 

Average employee 

remuneration (£) 9,034 9,432 9,185 

Sales per employee (£) 100,867 107,150 103,232 

Source: ICC Juniper database 




Future Company Developments 

Tesco sees greater opportunities overseas than in the UK, where it is probably 

approaching the limit of expansion that the Competition Commission would 

readily accept. Overseas outlets range in size from small convenience stores to 

hypermarkets. In 2006/2007, South Korea and Thailand delivered strong 

performances, and growth was rapid in the Czech Republic, Poland and 

Malaysia. Tesco is in the Chinese market, with a controlling interest in Tin 

Cao’s Hymall, operating 47 hypermarkets by the end of February 2007, and in 

2006/2007, opened a Tesco supermarket in Beijing. In the US, Tesco is opening 

10,000 square-foot Fresh & Easy Neighborhood Markets from 2007, starting in 

the South West (California, Arizona and Nevada), and opening 98 outlets in 

the first wave. The company sees the ‘neighborhood’ aspect as crucial — 

shoppers can avoid long car journeys for their daily or weekly shopping. Fresh 

& Easy stores will be around a quarter of the size of standard US supermarkets 

and will employ staff to provide customer service and information, a 

deployment of relationship marketing. The overseas expansion is 

accompanied by a programme to standardise all information technology (IT) 

systems across 3,263 stores in 14 countries. The development work for this 

huge project is undertaken in India. 1 

In June 2006, Tesco began the rollout of automated recycling machines for 

customers to sort their waste plastic, metal and glass, although the use of 

machines to perform a task that customers could do by hand in their own 

homes highlights the reluctance of some to get involved in recycling at home. 

The ‘Naturally’ range of household products, made from plant materials, 

offers an alterative to products using synthetic chemicals. Tesco has promised 

more support for local producers, which, provided the produce is not 

transported out of the district to distribution centres and then back to stores, 

could reduce food miles. 

ASDA GROUP LTD 


Wal-Mart, the largest retailer in the US in terms of sales, acquired ASDA in 

summer 1999. ASDA is part of the Wal-Mart International division. Wal-Mart 

has around 3,800 outlets in the US and a further 3,800 outlets in 15 other 

countries, including joint ventures. In 2007, ASDA had 340 stores in five 

formats: ASDA Wal-Mart Supercentres; ASDA Supermarkets; ASDA Living (for 

non-food); George (for clothes and household textiles); and ASDA Essentials, 

a discount format launched in 2006. 

For all customers, services include ‘greeters’ to welcome shoppers and answer 

their questions and trolleys of various sizes, including ‘Mart Karts’ (trolley 

scooters for the disabled). There are ‘gift receipts’ that do not display the 

price, a 28-day returns policy for people who just change their mind and 

biodegradable carrier bags, but no loyalty scheme. ASDA trialled one in 19 

stores but axed it in favour of price reductions. 

1. ‘Tesco standardises IT for global expansion’, www.computerweekly.com, 24th April 

2007. 




The ASDA offer covers travel agency (with www.wefly.co.uk, part of P&P 

Associates Ltd), home delivery, prescription collection and pharmacy, 

opticians, mobile telephone service (with Vodafone) and financial services, 

largely with Norwich Union. An online electrical shop was launched in 

January 2007. 

Reliance on long supply lines and just-in-time (JIT) deliveries means that both 

ASDA and Wal-Mart are vulnerable to supply interruptions, whatever the 

cause. Directors have been considering and responding to this problem by 

moving to a network of local hubs and seeking more local suppliers, including 

farmers delivering direct to stores. 

Advertising 

ASDA’s main media advertising expenditure of £38.5m in the year ending 

June 2007 concentrated on the brand itself, the George clothing range, 

bread, wine, milk and the Extra Special food range. Services were not 

prominent during the 12-month period. 

Profitability 

ASDA Group Ltd’s accounts take longer to reach the public domain than those 

of Tesco, Sainsbury’s and Morrisons, because it is a subsidiary of a US 

company. The Sarbanes-Oxley Act of 2002 requires US companies to apply 

more stringent standards to their accounts, under pain of heavy penalties, 

and so accounts now go through a longer checking process. In the year 

ending 31st December 2005 (the latest year for which the ICC Juniper 

database had financial results at the time this report was published 

[December 2007]), ASDA recorded a 3.8% increase in turnover to £14.87bn. 

However, pre-tax profit fell by 9.2% to £571.9m. 

Table 29: Financial Results for ASDA Group Ltd 

(£000, number, % and £), 

Years Ending 31st December 2003-2005 

2003 2004 2005 

Turnover (£000) 13,325,700 14,318,200 14,865,200 

Pre-tax profit (£000) 670,800 629,800 571,900 









Table 29: Financial Results for ASDA Group Ltd 

(£000, number, % and £), 


2003 2004 2005 

Profit/sales (%) 5.03 4.40 3.85 





remuneration (£) 9,702 10,032 9,947 




ASDA’s freedom to develop in its own way is restricted by the larger 

imperatives of Wal-Mart, which, in 2007, was experiencing a squeeze on 

margins as credit-strapped consumers in the US counted their money more 

carefully. With Tesco emphasising low prices in 2007, thus placing itself firmly 

in ASDA’s territory, ASDA needs to find a response that will build brand 

identity. During 2007, 14 new ASDA stores have been opened and a further 

15 have been extended. Six Living stores are scheduled to open in the UK by 

the end of 2007, with a further four Living stores to be opened in 2008. 

In the US, Tesco has forced Wal-Mart onto a back foot. Tesco’s small 

neighbourhood stores are very different from the Wal-Mart superstore, and 

Wal-Mart has decided to develop some smaller formats to serve small 

localities and to enable people to shop on foot. 

J SAINSBURY PLC 


As at 24th March 2007, J Sainsbury PLC’s estate of stores comprised 490 

supermarkets and 298 convenience stores. The total included 19 Country 

Town stores of 10,000 to 20,000 square feet and five Local stores of around 

3,000 square feet. 

Sainsbury’s financial-services partnership with HBOS centres on Sainsbury’s 

Bank, which was launched in February 1997 with Sainsbury’s as the majority 

partner. This reverted to 50:50 ownership in February 2007, when Sainsbury’s 

sold 5% to HBOS for £21m. 




Other services from Sainsbury’s include electricity and gas, and mobile and 

landline telephone services — utilities and communications ventures that 

compete head-on with Tesco. The Internet-based home delivery service 

Sainsbury’s to You operated from 114 stores during 2006/2007, with plans to 

increase this to around 200 by March 2010. There is a separate online store 

for kitchen appliances and one for its contact lens service. A joint venture 

with Shell provides Sainsbury’s Local shops on Shell forecourts. These are 

larger than typical forecourt shops, with at least four checkouts and around 

10 to 12 parking spaces. 

Unlike Tesco, Sainsbury’s no longer has its own loyalty scheme, but takes part 

in the Nectar loyalty programme alongside companies including BP, Ford and 

office supplies firm Viking Direct. 

Advertising 

In the year ending June 2007, 46.3% of Sainsbury’s main media advertising 

expenditure was on its product range, with food and drink, including 

fresh food, accounting for much of the rest, consistent with Sainsbury’s 

self-positioning as the supermarket that makes good food available to 

everyone. There was a large social responsibility spend with £2.9m supporting 

Comic Relief, which raises money for community improvement schemes in the 

UK and overseas. Jamie Oliver, as the face of Sainsbury’s, associates the brand 

with caring cookery, fresh ingredients and good nutrition. 

The business flags up its ‘broad range of great products at fair prices with 

particular emphasis on fresh food’, according to the 2007 Annual Report, 

although this is a rather diffuse message that Tesco counters for range, ASDA 

counters for price and Morrisons for the emphasis on fresh food. 

Profitability 

The financial year ending 24th March 2007 saw a recovery for J Sainsbury PLC. 

Pre-tax profit rose by 358.7%, although the profit-to-sales ratio of 2.78% was 

significantly lower than that for Tesco (6.22%). Turnover for J Sainsbury 

increased by 6.8% to reach £17.15bn. 




Table 30: Financial Results for J Sainsbury PLC 

(£000, number, % and £), Years Ending 26th March 2005, 

25th March 2006 and 24th March 2007 

2005 2006 2007 

Turnover (£000) 15,202,000 16,061,000 17,151,000 

Pre-tax profit (£000) -238,000 104,000 477,000 




Profit/sales (%) -1.57 0.65 2.78 

Profit/capital employed (%) -3.62 1.31 6.96 

Profit/total assets (%) -2.05 0.82 4.98 



remuneration (£) 9,974 10,209 10,776 




The Make Sainsbury’s Great Again (MSGA) 3-year plan ends in March 2008. 

The targets within MSGA include investing more than £400m in improved 

product quality alongside a 1% to 1.5% reduction in buying costs. By the end 

of 2006/2007, Sainsbury’s claimed to have made good progress towards 

meeting the plan’s goals. The programme for the future includes a wider 

range of non-food products and services, larger stores (75 should be 

expanded between 2007/2008 and 2009/2010) and a target of 19 million 

square feet of retail floorspace, requiring 30 new supermarkets and 100 more 

convenience stores, by March 2010. 

The globalisation of retailing means that virtually no company is immune 

from takeover, and Sainsbury’s is no exception. In July 2007, it was announced 

that Delta (Two) Ltd was negotiating to gain control of Sainsbury’s. However, 

following the submission of Delta Two’s original proposal, the combination of 

a number of factors meant that additional funding would be necessary to 

allow the takeover to occur, and Delta Two ended its discussions with 

Sainsbury’s in November 2007. 




WM MORRISON SUPERMARKETS PLC 


Wm Morrison Supermarkets PLC completed its acquisition of Safeway in 

March 2004 and finished incorporating the company into Morrisons in 

2006/2007. In the Half-Yearly Financial Report 2007/08, Morrisons reported to 

have 369 stores and 10.6 million square feet of selling space. 

A ‘head to head’ with Tesco is emerging; for example, in Carmarthen in 

Wales, Morrisons (a former Safeway outlet) and Tesco are the two major 

supermarkets, while in Llanelli, a new Morrisons opened in 2007, almost 

opposite a flagship Tesco. There is a strong emphasis on food, but the 

company also has offers range of household products and equipment. 

According to the 2007 Annual Report, Morrisons is positioning itself as 

the ‘food specialist for everyone’ and focuses particularly hard on the 

quality, provenance and freshness of food. During 2006/2007, sales of the 

health-conscious Eat Smart, Organics and The Best ranges rose by 47%, 20% 

and 58%, respectively, and sales of chocolate biscuits, crisps and carbonated 

drinks fell. 

Food service is at the heart of Morrisons’ trading strategy, and takeaway 

items are prepared in-store. This unique selling point (USP) positions 

Morrisons differently from Tesco (range of services), ASDA (low price) or 

Sainsbury’s (generally healthy eating). Food artisans who would formerly 

have worked in small businesses are employed in Morrisons in large numbers: 

2,000 bakers, 1,500 butchers and 800 fishmongers were employed during the 

53-week financial year ending 4th February 2007. 

Morrisons has a major food preparation and processing business in the UK; in 

2006/2007, it had six fruit and vegetable packing houses, three bakeries, two 

abattoirs and a food preparation factory. In addition, there are filling stations 

at 278 stores. Motorists with Morrisons Miles loyalty cards can earn money-off 

vouchers for their shopping in-store, and Morrisons also offers fuel cards for 

businesses. The loan of glasses for parties, recycling centres, cash points, baby 

changing rooms and motorised shopping carts are among the other services 

offered by the supermarket chain, alongside dry cleaning, pharmacies and 

photograph processing. Financial services are not as important as for Tesco or 

Sainsbury’s, although there is an alliance with HSBC Bank, which had 

branches in around 20 stores in 2007. 

Advertising 

The £26m spend on main media advertising in the year ending June 2007 was 

mainly for the brand, food and drink. Although substantial, the expenditure 

was only 40.1% of Marks & Spencer’s and 41.4% of Tesco’s. 




Profitability 

In the 53-week period ending 4th February 2007, Wm Morrison Supermarkets 

PLC recorded a pre-tax profit of £369m on a turnover of £12.46bn. In the year 

ending 29th January 2006, the company made a pre-tax loss of £312.9m on a 

turnover of £12.11bn. In 2006/2007, Morrisons had 117,804 employees, a 

significant decrease on the 134,337 reported for 2005/2006. In the Annual 

Report (p. 4), new Chief Executive Officer (CEO) Marc Bolland commented 

that: 

“An important, and encouraging, feature of the year was 

the increasing focus by consumers, the media and industry 

on health, quality, freshness and the provenance of food. 

This was a shift away from merely focusing on price, the 

main area of attention in the previous five years.” 

Table 31: Financial Results for Wm Morrison Supermarkets PLC 

(£000, number, % and £), Years Ending 30th January 2005, 

29th January 2006 and 4th February 2007 

2005 2006 † 2007 

Turnover (£000) 12,122,000 12,114,800 12,461,500 

Pre-tax profit (£000) 193,000 -312,900 369,000 




Profit/sales (%) 1.59 -2.58 2.96 

Profit/capital employed (%) 3.11 -5.55 6.56 

Profit/total assets (%) 2.44 -4.20 4.91 



remuneration (£) 9,862 11,594 11,107 


† — 53-week period 



Morrisons published a social responsibility report for the first time in 

2006/2007, and is aiming to reduce its food miles. 






Services have been a vital area for co-operatives for decades. The 

Co-operative Group — by far the largest of the UK’s co-operative societies, 

with around 85% of all retail sales by value through co-operative-owned 

shops — emerged from the merger between Co-operative Wholesale Services 

(CWS) and Co-operative Retail Services in April 2000. The Group has been 

holding its own, albeit in recent years performing better in financial services 

than in pure retailing. Merger talks with United Co-operatives got under way 

in 2006 and was completed in July 2007 to create the world’s largest 

consumer co-operative, with more than 4,500 outlets, 87,500 staff, 4.5 million 

members (the owners) and an annual turnover in excess of £9bn. 

The Co-operative Group’s convenience concept is intended to offer shoppers: 

• a full range of food and drink 

• strong local identities 

• financial services 

• toilets and baby change facilities in many supermarkets and superstores 

• cash machines. 

The Co-op brand is community-minded, comprehensive and good value. The 

issue of ‘image’ raises the question of whether a single brand can stretch 

across the range of consumer purchases — from food to travel and from DVDs 

to funerals — without losing relevance and impact. In 2006, the Co-operative 

Group launched its legal services to customers for property sale and purchase, 

accidents, consumer rights, problems with neighbours and other personal 

matters, funerals, banking and insurance, all serious and usually non-impulse 

purchases, which do not sit too easily alongside wines and spirits, cosmetics or 

groceries. However, the Co-op has benefits of scale in its main markets: it is 

the UK’s largest funeral director and largest independent travel-services 

provider, as well as the UK’s largest farming organisations and the thirdlargest 

pharmacy chain. Not all these sectors have bright prospects; for 

example, travel services have had to adapt to the decline of the package 

holidays. 

In 2007, the focus has been on food, pharmacy and the Co-operative Bank, 

which is the flagship ‘ethical’ business. Brand updating was in progress and 

cross-selling opportunities were given more emphasis. Social goals, very 

important to the co-operative movement, are clustered around five themes: 

climate change; social inclusion; crime prevention; making the most of good 

food; and community co-operation. 




Advertising 

The Co-operative Group’s main media advertising expenditure of £11.3m in 

the year ending June 2007 was more than Waitrose or Somerfield, and signals 

the Group’s determination to develop as a national ethical retailer. 

Profitability 

The Annual Report and Accounts 2006 shows that revenue before significant 

items in the 52-week financial year ending 13th January 2007 was £7.33bn; 

the company recorded a pre-tax profit of £318.1m. In comparison, in the 

53-week period ending 14th January 2006, the Co-operative Group recorded 

a revenue before significant items of £7.39bn and a pre-tax profit of £270.4m. 


The ethos of the Co-operative Group (a business owned by its customers) 

is in tune with the environmental concerns of the early 21st century, and 

has great experience in services from pharmacy to funerals. The brand image 

is less sharp than Tesco’s or ASDA’s, but its status as Britain’s largest farmer 

and the presence of Co-op stores in many market towns give it a potential 

pivotal role in the Transition Towns movement, a network of local groups 

working to reduce carbon emissions and develop sustainable economies 

in their own localities. 

SMALLER SUPERMARKETS AND SPECIALIST MULTIPLES 

Budgens Stores Ltd 


Advertising 

Budgens Stores Ltd, a subsidiary of Bishop’s Group Ltd within wholesaling 

business Musgrave Group PLC, comprises supermarkets and convenience 

stores, often in affluent locations where Waitrose also attracts custom. The 

emphasis is on smaller stores than Waitrose, however, as Musgrave aims to 

supply the convenience-store sector. In 2007, Budgens was in the process of 

becoming a franchised chain. 

Budgens’ spend of £649,000 on main media advertising in the year ending 

June 2007 was less than the expenditure of symbol groups Costcutter and 

Spar, and perhaps hints at some uncertainty as to the best way forward while 

the business is being converted from an owned to a franchised chain. 




Profitability 

Budgens Stores Ltd made a pre-tax loss of £9.9m in the year ending 

31st December 2005, the most recent year for which the ICC Juniper database 

had financial results at the time this report was published (December 2007). 

Turnover fell in 2003, 2004 and 2005, and by 2.9% between 2003 and 2005, as 

the chain was caught in a squeeze between Waitrose and convenience stores 

in more residential locations. 

Table 32: Financial Results for Budgens Stores Ltd (£000, 

number, % and £), Years Ending 31st December 2003-2005 

2003 2004 2005 

Turnover (£000) 470,828 461,829 457,187 

Pre-tax profit (£000) 4,180 959 -9,931 


Employees’ remuneration (£000) 46,973 47,811 50,067 


Profit/sales (%) 0.89 0.21 -2.17 

Profit/capital employed (%) 14.22 5.19 -75.06 

Profit/total assets (%) 2.44 0.56 -6.38 



remuneration (£) 8,591 8,854 9,836 




By 2007, Musgrave was in the process of converting Budgens into a franchised 

chain, and hopes to have converted the entire chain into a franchise business 

by 2008. During 2006, 59 stores were sold to franchisees, leaving 74 in 

Musgrave ownership and a total of 108 owned by franchisees. While the 

franchisees have some flexibility as to the services they offer, Musgrave’s own 

focus is firmly on the supply of food and everyday household products. 




Iceland Foods Ltd 


Advertising 

Profitability 

Iceland, which became part of Baugur’s Icebox Holdings Ltd in February 2005, 

claimed, in 1998, to be the first retailer in the world to provide nationwide 

home delivery of grocery shopping. Iceland has more than 650 stores in the 

UK, and has developed from a small North Wales chain selling frozen food 

and freezers. Growth was steady from its launch in 1970 until 1984, when 

Iceland floated. In 1989, Iceland took over its larger competitor, Bejam, and 

numbered 465 stores, compared with 81 in 1984. The ‘service’ element 

included an own-brand range free of genetically modified (GM) ingredients 

and promotion of the health benefits of eating vegetables. 

Five difficult years followed the acquisition of cash-and-carry firm Booker in 

2000, until Icelandic private-equity group Baugur took over Iceland and 

Booker, which had been renamed The Big Food Group, in 2005. Founder 

Malcolm Walker, who had left in 2001 following the Booker deal, returned 

as Chief Executive to look after the Iceland chain. Marks & Spencer bought 28 

leasehold stores in January 2006, which provided a cash injection that helped 

Iceland on its way to a perhaps unexpected recovery, showing that there is 

still room for smaller national grocery multiples if they have an attractive 

enough sales proposition. 

Apart from free home delivery for customers who spend £25 or more, and the 

sale of kitchen and domestic electrical appliances, the main customer-service 

slant taken by Iceland has been food quality — own-brand foods are free 

from GM ingredients and artificial colours and flavours. 

The £7.8m that Iceland spent on main media advertising during the year 

ending June 2007 reflects a desire for the brand to re-establish itself as the 

local store for ‘busy mums’. 

Iceland Foods Ltd managed to return decent financial results in the year 

ending 30th March 2007 while continuing to reduce staff numbers. Turnover 

increased by 5.7% to £1.57bn, but pre-tax profit fell by 32.7% to £63m. The 

profit-to-sales ratio of 4.02% was adequate in the circumstances of an 

ongoing turnaround. 




Table 33: Financial Results for Iceland Foods Ltd 

(£000, number, % and £), Years Ending 1st April 2005, 

31st March 2006 and 30th March 2007 

2005 2006 2007 

Turnover (£000) 1,439,098 1,481,533 1,565,337 

Pre-tax profit (£000) -75,049 93,554 62,982 




Profit/sales (%) -5.22 6.31 4.02 

Profit/capital employed (%) -33.31 33.86 19.62 

Profit/total assets (%) -19.38 20.53 11.78 



remuneration (£) 9,964 9,290 9,087 


Note: the company was known as Iceland Foods PLC until 09/02/2005. 



The Iceland offer, based on frozen food, should remain attractive to the core 

market of ‘busy mums’, although looking ahead a decade, domestic freezers 

will need to be more energy-efficient in manufacture and use to minimise 

harmful emissions, and electricity supplies will have to remain reliable, 

because power cuts can ruin frozen food. Iceland has scope to develop in its 

core business without becoming too involved in ancillary services. 




Marks and Spencer PLC 


Advertising 

Marks and Spencer PLC is not classified as a ‘supermarket’ multiple, but it sold 

£3.97bn-worth of food in the UK, all own brand, in 2006/2007, 9.7% more 

than in 2005/2006. In 2006/2007, Simply Food outlets grew from 144 to 205 

stores in the UK, located at BP Connect forecourts, motorway service stations, 

railway stations and airports. By early December 2007, Marks & Spencer 

owned and operated 163 Simply Food outlets; there were a further 130 

franchised outlets (the franchise holders were SSP Rail, SSP Air, BP and Moto). 

The franchised outlets were located as follows: four Simply Food outlets at 

airports; 28 at railway stations; 75 at BP filling stations; and 23 at motorway 

service areas. 

With a claimed 4.3% of the retail grocery market, Marks & Spencer is larger 

than Waitrose or Somerfield and has a weekly customer total of 7 million. 

The 2007 Annual Report says: 

“The trend in healthy eating shows no signs of easing. 

Demand for fresh, natural food as well as the healthy 

prepared meals, at which we excel, is rising fast. But 

indulgent products are also in high demand such as our 

‘Gastropub’ range and special desserts …” 

Hydrogenated fats, or transfats, were not in any Marks & Spencer foods by 

2006, and the Marks & Spencer Cook!, Eat Well children’s meals and its ready 

meals are free of artificial colours, flavourings, sweeteners and preservatives. 

Foods are labelled with ‘traffic lights’ and guideline daily amount (GDA) 

percentages, a system that should cover all ranges by the end of 2007/2008. 

Organic foods, in 350 lines by May 2007, are expected to triple in sales by 

2012. The Marks & Spencer ‘service’ is about quality and traceability, with 

luxury treats on one hand and everyday healthy eating on the other, 

appealing to affluent customers and to shoppers on tight budgets who are 

planning a special occasion. 

The financial-services arm, M&S Money, has been separate from the retailing 

business since November 2004, when it was sold to HSBC. The product range 

includes savings, investments, insurance, credit cards, loans and a travel 

service run in association with Thomas Cook. 

Marks & Spencer spent £64.9m on main media advertising in the year ending 

June 2007, according to NMR. 29.4% of the total was for women’s fashion, 

with a further 19.8% for the food range overall, plus additional amounts for 

special food ranges, e.g. Christmas and Easter. 




Profitability 

The year ending 2nd April 2005 saw a turnover slide of 9.8% for Marks 

and Spencer PLC and a 35.6% decrease in pre-tax profit. However, the 

12-month period ending 1st April 2006 was much better for the company, 

with the profits-to-sales ratio rising from 6.72% to 9.6%. Things improved 

further for the company in the year ending 31st March 2007, with turnover 

growing by 10.1% to £8.59bn and pre-tax profit increasing by 25.2% to 

£936.9m. The profit-to-sales ratio improved to 10.91%. 

Table 34: Financial Results for Marks and Spencer PLC 

(£000, number, % and £), Years Ending 2nd April 2005, 

1st April 2006 and 31st March 2007 

2005 2006 2007 

Turnover (£000) 7,490,500 7,797,700 8,588,100 

Pre-tax profit (£000) 503,400 748,200 936,900 




Profit/sales (%) 6.72 9.60 10.91 





remuneration (£) 11,950 12,694 12,429 




Simply Food outlets located in places such as motorway service areas have 

brought the Marks & Spencer brand to a wider range of customers, including 

young people who may previously have thought of Marks & Spencer as a 

store for older shoppers. During 2007, the company opened new Simply Food 

outlets at BP filling stations at the rate of two a week and is scheduled to 

bring the total to more than 160 by the start of 2008. The strategy of bringing 

Simply Food stores to people on the move prevents Marks & Spencer from 

competing on exactly the same territory as Waitrose, although the Marks & 

Spencer and John Lewis/Waitrose organisations have similarities in their 

positioning, both serving relatively affluent shoppers. Marks & Spencer 

provides (through M&S Money) a wider range of financial services than 

Waitrose, although Waitrose is also an ISP. For both businesses, food is 

becoming more important, with services in an ancillary role. 




The newly confident Marks & Spencer is considering re-entering Western 

Europe, expanding in India from 11 stores, and planning to benefit from the 

People’s Republic of China’s astronomical growth. In 2006, international 

business represented just 7% of sales. Marks & Spencer is not yet a major 

multinational. 

Somerfield Ltd 


Advertising 

Profitability 

Somerfield was acquired by Violet Acquisitions in December 2005. Violet 

Acquisitions is a private-equity consortium including PIA Investments No.1, a 

subsidiary of Barclays Bank, and two companies within the Tchenguiz Family 

Trust: Tazamia and Brigetta Investments. 

Somerfield had sought a wide positioning, from discount to upper mass 

market, underpinned by premium own-label lines. An alliance with Tchibo in 

250 stores for household equipment and clothing failed to win shoppers over 

in a substantial way, and the chain has struggled to offer wide enough ranges 

of food to compete with the ‘big four’. 

Stores tend to be in communities too small to attract any of the major 

multiples, so Violet Acquisitions has made a virtue of necessity by positioning 

the chain at the convenience end of supermarket retailing, within residential 

neighbourhoods and in ‘transient locations’; for example, alongside main 

roads. Discount clothing retailer Peacocks had outlets in 21 Somerfield 

stores in 2007, adding to the message of ‘everyday value’. There are other 

possibilities for emphasis, such as ‘local food’, ‘super convenience’ or 

‘ethical trader’. 

The main media advertising spend of £8.3m in the 12 months to June 2007 

(more than Iceland but less than Waitrose) was not substantial given the size 

of the business and reflects trading issues during that period. 

In the year ending 29th April 2006, Somerfield Ltd reported a pre-tax loss of 

£617.8m and a loss-to-sales ratio of 11.77%. Meanwhile, staff numbers 

continued to increase from 53,011 in the 53-week period ending 30th April 

2005 to 56,980 in 2005/2006, while the total remuneration for the directors 

rose from £3.6m to £6.1m. 




Table 35: Financial Results for Somerfield Ltd 

(£000, number, % and £), Years Ending 29th April 2004, 

30th April 2005 and 29th April 2006 

2004 † 2005 2006 

Turnover (£000) 4,521,200 4,676,800 5,249,000 

Pre-tax profit (£000) 45,200 60,900 -617,800 




Profit/sales (%) 1.00 1.30 -11.77 

Profit/capital employed (%) 3.74 4.12 -185.75 

Profit/total assets (%) 2.40 2.69 -37.43 



remuneration (£) 8,655 8,962 9,044 


† — 53-week period 

Note: the company was known as Somerfield PLC until 21/12/2005. 


Performance in 2006/2007 failed to show any sort of recovery. Weak trading 

in the basic offer meant that Somerfield had little leeway to launch into new 

services, and Budgens was competing in the same ‘local’ niche. 


In August 2007, Somerfield bought five stores from Fopp, a music retailer in 

administration, in a move that fits with the intention to focus on town-centre 

top-up grocery retailing. 




Waitrose Ltd 


Advertising 

Profitability 

Waitrose Ltd, owned by the John Lewis Partnership and with 185 stores in 

2007, has a reputation for high quality and service, including home delivery 

for in-store shoppers and an online shopping service. The stores are mainly in 

the South and the Midlands, and are often in affluent communities. The 

other side of John Lewis is composed of the 26 department stores and the 

Greenbee direct-sales business. 

The Waitrose niche, for high-quality foods at prices affordable for the middle 

to upper mass market, is tough to maintain because of constant tensions 

between quality and cost, between serving the customer and giving the 

supplier a fair deal. 

In the year ending June 2007, Waitrose spent £8.7m on main media 

advertising, supporting brand values and the continued growth of the 

business. 

Waitrose Ltd’s turnover rose by 10.7% in the year ending 27th January 2007 

to £3.5bn. However, pre-tax profit fell by 8.6% to £87.8m. 

Table 36: Financial Results for Waitrose Ltd 


28th January 2006 and 27th January 2007 

2005 2006 2007 

Turnover (£000) 2,796,700 3,158,900 3,497,300 

Pre-tax profit (£000) 79,300 96,100 87,800 








Table 36: Financial Results for Waitrose Ltd 


28th January 2006 and 27th January 2007 


2005 2006 2007 

Profit/sales (%) 2.84 3.04 2.51 





remuneration (£) 9,769 9,997 10,528 




Waitrose is going further down the ‘services’ road than the other 

medium-sized multiples. Online services from Greenbee include home, travel, 

wedding and event insurance from AXA, and a MasterCard credit card that 

gives users points to spend throughout the John Lewis group. Greenbee, the 

Ocado online grocery shopping service and the waitrose.com Internet service 

provider (ISP) help to develop cross-selling. Although Waitrose works with 

partners such as AXA, the majority of the cross-selling is within the John Lewis 

Partnership. The John Lewis brand has successfully retained a reputation for 

high quality at a fair price — a reputation that extends across its outlets. 

DISCOUNT CHAINS 

Aldi Stores Ltd 


Advertising 

Aldi Stores Ltd, a subsidiary of Hiller GmbH of Germany, has more than 5,000 

stores worldwide, and the overriding aim is to provide products at the lowest 

possible cost. 

The £12.6m main media advertising expenditure by Aldi in the year ending 

June 2007 was the sixth highest of any food retailer, signalling the intention 

to become the first-choice discount chain. 




Profitability 

In the year ending 31st December 2006, turnover for Aldi Stores Ltd rose by 

17% to £1.32bn. However, pre-tax profit fell by 27.9% to £48.4m. 

Table 37: Financial Results for Aldi Stores Ltd (£000, number, 

% and £), Years Ending 31st December 2004-2006 

2004 2005 2006 

Turnover (£000) 1,017,561 1,126,597 1,318,259 

Pre-tax profit (£000) 27,360 67,188 48,442 

Directors’ remuneration (£000) 1,071 1,113 968 



Profit/sales (%) 2.69 5.96 3.67 





remuneration (£) 21,407 21,105 21,138 




Aldi is likely to expand the range of products offered, from DIY tools to 

washbasins, furniture to photograph frames, but development into 

added-value services appears unlikely, and too far from the strategy of 

special offers sourced at the lowest possible cost. Aldi has abandoned its 

policy of accepting cash only, allowing shoppers to pay by debit card, which 

is an advance in service. 

Lidl Ltd 


Lidl Ltd is a subsidiary of Lidl UK GmbH of Germany, within Lidl Stiftung 

& Co KG of Germany, and employs the staff who work in Lidl operations in 

more than 380 stores in the UK. There are around 5,000 Lidl stores 

throughout Europe, dating from the early 1970s. 




Advertising 

Lidl invested very heavily in main media advertising over the year ending 

June 2007, spending £10.2m — almost as much as Aldi. 

Profitability 

In the year ending 28th February 2006, Lidl Ltd achieved a 23.2% rise in 

turnover to £104.9m. The company made a pre-tax profit of £72,000, 

compared with a pre-tax profit of £62,000 in the previous year. 

Table 38: Financial Results for Lidl Ltd 

(£000, number, % and £), Years Ending 29th February 2004 

and 28th February 2005 and 2006 

2004 2005 2006 

Turnover (£000) 71,380 85,155 104,881 

Pre-tax profit (£000) 59 62 72 




Profit/sales (%) 0.08 0.07 0.07 





remuneration (£) 14,419 14,728 15,165 




It is hard to see how Lidl can differentiate itself from Aldi. Both chains 

concentrate on food and non-food special offers, both accept cash and debit 

cards and neither promotes high-quality fresh foods or is eager to develop 

customer services, other than e-mail alerts or the latest offers. 




Netto Foodstores Ltd 


Advertising 

Profitability 

Netto Foodstores Ltd is a subsidiary of Dansk Supermarked A/S of Denmark. 

Netto’s main media advertising expenditure was not high profile in the year 

ending June 2007, but promotions and offers are flagged prominently on the 

company’s website. 

Netto Foodstores Ltd suffered a steep fall of 93.1% in pre-tax profit in the 

year ending 31st December 2006, as the company sought to grow turnover, 

achieving a 5.2% increase to £627.4m. 

Table 39: Financial Results for Netto Foodstores Ltd 

(£000, number, % and £), 


2004 2005 2006 

Turnover (£000) 578,236 596,347 627,442 

Pre-tax profit (£000) 10,604 91,731 6,318 

Directors’ remuneration (£000) 234 208 250 



Profit/sales (%) 1.83 15.38 1.01 





remuneration (£) 13,361 14,050 15,181 







Netto provides a larger selection of branded goods than Aldi, and special 

offers that include fresh food and extend to Scandinavian-style furnishings, 

but like the other main discount chains, it accepts only cash and debit cards 

and does not appear to have ambitions in customer services apart from e-mail 

alerts. 

KEY POINTS 

• Tesco has become a trading portal for a widening range of goods and 

services, leveraging its power in physical space and online presence. 

Sainsbury’s challenge to Tesco has revived, although, in 2007, the takeover 

bid from Delta Two was a distraction. ASDA also takes the ‘general trading 

company’ approach, but is more focused than Tesco or Sainsbury’s on 

low- to middle-income shoppers who want low prices on basics above 

anything else. Morrisons continues to concentrate on selling food and 

household goods and has not introduced a wide array of services. 

• The Co-operative Group rivals Tesco in the range of services offered, and 

grew in size in 2007, due to the merger with United Co-operatives. The 

Co-operative Group is among the leading retailers for environmental 

awareness and for local sourcing. 

• Among the smaller chains, Waitrose provides financial and other services, 

and benefits from the cross-selling opportunities that result from being part 

of the John Lewis Partnership. 

• Convenience retailing, rather than expansion into a wide range of services, 

is the theme for Somerfield, Budgens (on the way to becoming a symbol 

group) and, increasingly, for Marks & Spencer, with its food-only outlets at 

BP Connect forecourts, motorway service stations, airports and railways. 

Although Marks & Spencer has a financial-services brand, M&S Money, this 

is owned by HSBC. 

• Recovering Iceland is firmly in the frozen food niche, while discount chains 

Aldi, Lidl and Netto compete in the ultra low-price territory where customer 

services are secondary. 



The Future 

15. The Future 

‘THE SUPERMARKET’ IS TRANSFORMING INTO ‘THE SOURCE’ 

The process of supermarkets transforming into ‘the source’ is most marked at 

Tesco, which offers UK consumers access to almost every kind of purchase — 

one can furnish a home, bank, travel, lose weight and even pay for Open 

University courses with Tesco (the latter using Clubcard vouchers). 

Tesco is no longer about sourcing and selling groceries, although this remains 

an important part of the business; it is about the business of retailing — the 

process has become more important than merchandise. 

ASDA has chosen the same path, albeit not quite to such an extent, and is 

more reliant than Tesco on the superstore format. Since its purchase of T&S 

Stores, Tesco has developed a range of formats from forecourt shop to 

hypermarket. The Co-operative Group offers a variety of services to rival Tesco 

and ASDA, and although its grocery stores lack Tesco’s range of formats or 

ASDA’s emphasis on superstores, customers appreciate the emphasis on 

Fairtrade and protecting the environment. 

Sainsbury’s has preferred to refocus on food, especially fresh and nutritious 

food, an arena in which there is strong competition from the upmarket 

retailers Marks & Spencer and Waitrose. Morrisons also concentrates on food 

for customers on every size of budget. The discount chains such as Aldi, Lidl 

and Netto, and the repositioned convenience chains Budgens and Somerfield, 

are not developing as service hubs, although they all offer some form of 

customer service; for example, special offers publicised on their websites. 

WHAT WILL CONSUMERS WANT? 

Between 2008 and 2012, consumers are likely to want more: 

• local shopping to minimise transport and save time 

• one-stop shopping for food, clothes and household items 

• online shopping. 

Environmental concerns will grow, although consumers on tight budgets will 

often put low price above ethical procurement. 

Further ahead, between 2012 and 2032, the world is likely to be entering a 

time of resource shortages that will enforce changed shopping practices: 

• greater concentration on essentials 

• fewer out-of-town stores and much more neighbourhood shopping, and 

local sourcing to reduce transport and emission costs. 


The Future 


When people do journey to shop, they will want to make it more of an 

occasion, with opportunities for relaxation as well as purchasing. The 

Thirdspace/Fresh & Wild complex in London’s Soho is an example of this 

concept. The Fresh & Wild supermarket, concentrating on organic foods, has 

a café, juice bar and food takeaways, while Thirdspace is a gym and fitness 

centre. Fresh & Wild, with six shops in London, was acquired in 2004 by Whole 

Foods Market, which opened an 80,000 square-foot store in Kensington in 

June 2007. Whole Foods Market is a US company that was started in 1978 in 

Austin, Texas, by John Mackey, and became a public company in 1992. By 

2007, it had 190 stores in the US, Canada and the UK, and is a union of 

(sometimes pale) green commerce and destination shopping. The foods 

include organically grown produce, they are additive free or relatively 

unadulterated and ‘local’ is favoured over air-freighted produce, although 

‘local’ has a different, more distant meaning in the US than in the UK. Whole 

Foods Market tries to achieve commercial growth while trading ethically and 

paying suppliers fair prices — a tricky balance. Customer service is integral to 

the experience: little cafés, restaurants, food tastings and introductions to 

fruit and vegetables that may be unfamiliar to UK shoppers. 

The problem for Whole Foods Market is to retain its environmental ideals 

while continuing to expand, but its presence in the UK exemplifies the arrival 

of the ‘destination supermarket’ to a greater extent than Marks & Spencer, 

which is probably the nearest equivalent. Marks & Spencer, with its attractive 

in-store cafés, has a great deal of knowledge about destination shopping, 

which should stand it in good stead. 

The parallel trend for the re-emergence of local shopping will create 

opportunities for independents, but Tesco and the Co-operative Group, in 

particular, should thrive as a result of: 

• customers’ confidence in their brand names 

• expertise in retailing a wide range of services and goods. 

The Co-operative Group has a loyalty base in towns and villages, and ethical 

brand values, but Tesco’s strength in neighbourhood stores all the way up the 

size chain to hypermarkets gives it an immense advantage. However, Tesco 

can still do a lot more to make its ‘destination’ stores more appealing for a 

day out. 

Supermarkets’ popularity with customers is clear from Key Note’s consumer 

research — only 6.7% of respondents had not shopped in a supermarket in 

the 6 months before they were interviewed, which shows that they are 

successfully providing what shoppers want. Among the under-25s, a majority 

of those surveyed would increase their spending on products and services 

from supermarkets if a wider range of goods and services were offered. In 

Key Note’s research, the under-25s were less inclined than older respondents 

to link a supermarket brand name with groceries and more inclined to think 

of the brand as a source for a wide array of goods and services. This 

perception may be retained as they age, eventually overcoming the tendency 

for older and more affluent people to regard supermarkets’ branded services 

as somewhat lacking in status. 



The Future 

Supermarkets help the Government by using their buying power to minimise 

price inflation for consumers. For this reason alone, the UK Government is 

unlikely to do anything significant to make life harder for supermarket 

retailers. This protected position makes it easier for multiple retailers to 

expand in directions unrelated to food and drink. Increasingly, however, the 

media will be watching the extent to which the multiples’ activities accord 

with high environmental and ethical standards. Provided they score well on 

these counts and offer a range of formats, including neighbourhood stores to 

which customers can walk or cycle, relatively few people will oppose their 

transformation into general trading companies. 

KEY POINTS 

• Current trends include more local, one-stop and online shopping. 

• In the longer term, as resource scarcities and emission reduction imperatives 

bite, shoppers will concentrate more on essentials, which they will want to 

buy locally. The future for efficient neighbourhood stores, supplemented by 

online purchase of bulky and luxury items, is brighter than for out-of-town 

superstores that are too far for most customers to walk to. 

• Stores not in residential neighbourhoods will need to be leisure and 

entertainment destinations, offering choices for a day out. 

• Prospects are particularly exciting for Tesco and the Co-operative Group, 

Tesco because of its market dominance and expertise across services and 

formats and the Co-operative Group because of its experience in local 

retailing and sourcing and its track record of promoting ethical and 

environmentally sustainable trading. 

• Flexibility to gear formats and ranges to local needs, and scale to function 

as general trading companies, will be important attributes for supermarket 

businesses as they adapt to meet the challenges of the future. 


The Future 




Further Sources 

16. Further Sources 

Publications 

Computer Weekly 

Quadrant House 

The Quadrant 

Sutton 

Surrey, SM2 5AS 

http://www.computerweekly.com 

Financial Times 

1 Southwark Bridge 

London, SE1 9HL 

Telephone: 020-7873 3000 

Fax: 020-7873 3076 

http://www.ft.com 

Great Britain Consumer Spend, 2007 

TNS Worldpanel 

Westgate 

London, W5 1UA 

Telephone: 020-8967 0007 

http://www.tnsglobal.com 

Scotland on Sunday 

108 Holyrood Road 

Edinburgh, EH8 8AS 

Telephone: 0131-620 8620 

http://www.scotlandonsunday. 

scotsman.com 

General Sources 

NEMS Market Research 

22-23 Manor Way 

Belasis Hall Technology Park 

Billingham, TS23 4HN 

Telephone: 01642-373 355 

Fax: 01642-373 350 

http://www.nemsmr.co.uk 

Nielsen Media Research 

1st Floor 

Atrium Court 

Bracknell 

Berkshire, RG12 1BZ 

Telephone: 01344-469 100 

Fax: 01344-469 102 

E-mail: nmrcommunication 

@nielsen.co.uk 

http://www.nielsenmedia.co.uk 

Government Sources 

Competition Commission 

Victoria House 

Southampton Row 

London, WC1B 4AD 

Telephone: 020-7271 0100 

Fax: 020-7271 0367 

E-mail: info@cc.gsi.gov.uk 

http://www.competitioncommission.org.uk 

Government Actuary’s Department 

Finlaison House 

15-17 Furnival Street 

London, EC4A 1AB 

Telephone: 020-7211 2601 

Fax: 020-7211 2630 

E-mail: enquiries@gad.gov.uk 

http://www.gad.gov.uk 

• 2004-Based Population Projections 




HM Revenue & Customs 

Somerset House 

Strand 

London, WC2R 1LB 

Telephone: 020-7438 6622 

http://www.hmrc.gov.uk 

National Statistics 

1 Drummond Gate 

London, SW1V 2QQ 

Telephone: 020-7533 5888 

Fax: 01633-812 599 

http://www.statistics.gov.uk 

• Family Spending 

• Social Trends 

Office of Communications 

Riverside House 

2a Southwark Bridge Road 

London, SE1 9HA 

Telephone: 020-7981 3000 

Fax: 020-7981 3333 

http://www.ofcom.org.uk 

United Nations Population Fund 

220 East 42nd Street 

New York, NY 10017 

US 

Telephone: 001-212 297 5000 

• State of the Population 2007 

Other Sources 

ASDA Group 

ASDA House 

South Bank 

Great Wilson Street 

Leeds, LS11 5AD 

Telephone: 0113-243 5435 

Fax: 0113-241 8666 

http://www.asda.com 

The Co-operative Group 

New Century House 

Manchester, M60 4ES 

Telephone: 0800-0686 727 

http://www.co-operative.co.uk 

Ethicalsuperstore.com 

c/o PointOV Ltd 

Unit 9 

Hawick Trading Estate 

Newcastle-upon-Tyne, NE6 1AS 

Telephone: 0845-0099 016 

Fax: 0845-0099 017 

http://www.ethicalsuperstore.com 

Experian 

Talbot House 

Talbot Street 

Nottingham, NG80 1TH 

Telephone: 0115-941 0888 

Fax: 0115-934 4905 

http://www.experian.co.uk 

Marks and Spencer PLC 

Waterside House 

35 North Wharf 

London, W2 1NW 

Telephone: 0845-302 1234 

Fax: 0845-303 0170 

http://www.marksandspencer.com 

Wm Morrison Supermarkets 

Hilmore House 

Gain Lane 

Bradford, BD3 7DL 

Telephone: 0845-611 5000 

Fax: 01924-875 250 

http://www.morrisons.co.uk 




J Sainsbury PLC 

33 Holborn 

London, EC1N 2HT 

Telephone: 020-7695 6000 

Fax: 020-7695 7610 

http://www.sainsbury’s.co.uk 

Tesco PLC 

Tesco House 

Delamare Road 

Cheshunt 

Waltham Cross 

Hertfordshire, EN8 9SL 

Telephone: 01992-632 222 

Fax: 01992-630 794 

http://www.tesco.com 

Thomas Charles 

164 Acton High Street 

London, W3 6QZ 

Telephone: 0870-141 7271 

http://www.thomascharles.com 

Waitrose 

Doncastle Road 

Bracknell 

Berkshire, RG12 8YA 

Telephone: 01344-424 680 

Fax: 01344-824 686 

http://www.waitrose.com 

YouGov 

50 Featherstone Street 

London, EC1Y 8RT 

http://www.yougov.com 

Bisnode Sources 

ICC Information Ltd 

Telephone: 020-8481 8800 

Fax: 020-8941 6014 

E-mail: info@icc.co.uk 

http://www.icc.co.uk 

ICC provides in-depth business 

information on all UK and Irish 

companies, directors and 

shareholders through a wide range 

of flexible online business and 

integration services. 

ICC can provide information via: 

• Juniper (Windows TM online service), 

updated daily 

• Plum (Internet), updated daily 

• Blueberry (CD-ROM — Credit Index, 

Company Index and Broker 50), 

updated monthly 

• Damson (Bulk Data Supply via EDD, 

EDI, ISDN, magnetic tape and DAT). 

Databases available via Juniper, Plum, 

Blueberry and Damson include: 

• directory information on all live and 

dissolved companies 

• analysed financial information of 

every trading British company 

• database of all 4.9 million 

directorships 

• images of the latest directors’ 

reports and accounts 

• full text annual reports and 

accounts of UK quoted PLCs 

• stockbroker research 

• shareholders’ information. 




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E-mail: sales@keynote.co.uk 

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Key Note Research 


Key Note is a leading supplier of market information, publishing an extensive range of 

consumer, industrial, business-to-business and services titles. With over 25 years’ experience, 

Key Note represents clear, concise, quality market information. 

For all reports, Key Note undertakes various types of research: 

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online searching on particular companies. 

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invaluable to the Key Note research process. 

Secondary data are provided by BMRB International (TGI) and Nielsen Media Research for 

consumer/demographic information and advertising expenditure respectively. In addition, 

various official publications published by National Statistics, etc. are used for essential 

background data and market trends. 

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will be some instances where: a realistic estimate cannot be made (e.g. the number of disabled 

people in the UK); or external sources request that we do not update their figures. 

Key Note Editorial Manager, 2007 






The Key Note Range of Reports 


Key Note publishes over 180 titles each year, across both the Key Note and Market 

Assessment product ranges. The total range covers consumer, lifestyle, financial 

services and industrial sectors. 

Title Edition Published 


Market Reports and Reports Plus 

A 

Access Control 9 2007 

Accountancy 11 2007 

Aerospace 12 2003 

Agrochemicals & Fertilisers 3 2002 

Air Freight 2 2005 

Airlines 18 2007 

Airports 11 2007 

Animal Feedstuffs 11 2001 

Arts & Media Sponsorship 2 2007 

Automatic Vending 21 2007 

Automotive Services 5 2007 

Autoparts 18 2007 

B 

Baths & Sanitaryware 13 2007 

Bearings 2 2007 

Betting & Gaming 20 2007 

Biscuits & Cakes 14 2007 

Book Publishing 19 2007 

Bookselling 14 2007 

Bread & Bakery Products 22 2007 

Breakfast Cereals 13 2007 

Breweries & the Beer 

Market 26 2007 

Bricks & Tiles 14 2006 

Bridalwear 3 2007 

Builders’ Merchants 15 2006 

Building Contracting 9 2006 

Building Materials 12 2006 

Bus & Coach Operators 8 2006 

Business Press 13 2007 

C 

Cable & Satellite TV 10 2004 

Camping & Caravanning 13 2002 

Canned Foods 15 2006 

Carpets & Floorcoverings 15 2002 

Catering Equipment 10 2007 

Chemical Industry 11 2006 

Childrenswear 7 2007 

Chilled Foods 13 2005 

China & Earthenware 24 2007 

Cigarettes & Tobacco 21 2007 

Cinemas & Theatres 9 2001 

Closed-Circuit Television 9 2007 

Clothing Manufacturing 14 2007 

Clothing Retailing 6 2007 

Commercial Radio 8 2004 

Commercial Vehicles 14 2007 

Computer Hardware 6 2005 

Computer Services 7 2004 

Computer Software 6 2005 

Confectionery 25 2007 

Consumer Internet Usage 4 2000 

Consumer Magazines 14 2007 

Contraception 3 2007 

Contract Catering & 

Foodservice Management 20 2007 

Contract Cleaning 19 2006 

Cooking Sauces & Food 

Seasonings 2 2006 

Corporate Giftware 2 2007 

Corporate Hospitality 6 2007 

Cosmetics & Fragrances 20 2007 

Cosmetic Surgery 5 2007 

Courier & Express Services 14 2005 

D 

Dark Spirits & Liqueurs 3 2004 

Debt Management 

(Commercial & Consumer) 4 2007 

Defence Equipment 10 2006 

Design Consultancies 3 2000 

Digital Broadcasting 2 2007 

Digital TV 2 2003 

Direct Marketing 18 2007 

Discount Retailing 6 2007 

Disposable Paper Products 12 2007 

Document Imaging Systems 1 2007 

Domestic Heating 13 2007 

Dry Cleaning & Laundry 

Services 5 2005 






E 

Electrical Contracting 8 2006 

Electrical Wholesale 4 2006 

Electricity Industry 5 2006 

Electronic Component 

Distribution 12 2002 

Electronic Component 

Manufacturing 11 2002 

Electronic Games 4 2003 

Equipment for the Disabled 4 2006 

Equipment Leasing 12 2003 

Estate Agents 16 2007 

Ethnic Foods 14 2007 

Exhibitions & Conferences 9 2007 

F 

Factoring & Invoice 

Discounting 2 2003 

Fast Food & Home Delivery 

Outlets 22 2006 

The Film Industry 4 2002 

Finance Houses 11 2000 

Fire Protection Equipment 8 2006 

Fish & Fish Products 12 2004 

Fitted Kitchens 7 2007 

Football Clubs & Finance 3 2005 

Footwear 15 2007 

Franchising 10 2006 

Free-To-Air TV 8 2004 

Freight Forwarding 15 2006 

Frozen Foods 22 2007 

Fruit Juices & Health Drinks 11 2007 

Fruit & Vegetables 20 2007 

Further & Higher Education 5 2005 

G 

Garden Equipment 12 2006 

Gas Industry 4 2006 

Giftware 16 2007 

Glassware 14 2007 

Greetings Cards 23 2007 

H 

Hand Luggage & Leather 

Goods 13 2007 

Health Clubs & Leisure 

Centres 8 2007 

Health Foods 22 2003 

Heating, Ventilating & Air 

Conditioning 9 2002 

Home Furnishings 17 2007 

Home Shopping 11 2005 

Horticultural Retailing 16 2007 

Hotels 22 2007 

Housebuilding 17 2006 

Household Appliances 

(Brown Goods) 10 2004 

Household Appliances 

(White Goods) 15 2004 

Household Detergents & 

Cleaners 15 2007 

Household Furniture 17 2004 

I 

Ice Creams & Frozen 

Desserts 12 2007 

Industrial Fasteners 8 2001 

Industrial Pumps 5 2000 

Industrial Valves 8 2001 

Insurance Companies 11 2006 

Internet Usage in Business 8 2005 

IT Security 8 2007 

IT Training 11 2007 

J 

Jewellery & Watches 23 2007 

K 

Kitchenware 6 2007 

L 

Laboratory Equipment 8 2006 

Lighting Equipment 14 2002 

Lingerie 7 2007 

M 

Management Consultants 10 2003 

Market Forecasts 1 2005 

Meat & Meat Products 18 2006 

Medical Equipment 16 2007 

Metal Recycling 4 2004 

Milk & Dairy Products 21 2007 

Mobile Phones 6 2005 

Mobile Telecommunications 2 2007 






N 

Natural Products 2 2007 

New Media Marketing 3 2002 

Newspapers 16 2006 

Non-Metal Recycling 1 2005 

O 

Office Furniture 20 2006 

Offshore Oil & Gas Industry 4 2006 

Ophthalmic Goods & 

Services 15 2006 

OTC Pharmaceuticals 12 2005 

Own Brands 12 2007 

P 

Packaging (Glass) 12 2003 

Packaging (Metals & 

Aerosols) 12 2003 

Packaging (Paper & Board) 13 2002 

Packaging (Plastics) 14 2003 

Paper & Board 

Manufacturing 14 2002 

Personal Banking 11 2000 

Photocopiers & Fax 

Machines 14 2005 

Plant Hire 13 2007 

Plastics Processing 10 2003 

Poultry 2 2005 

Power Tools 5 2007 

Premium Lagers, Beers 

& Ciders 7 2007 

Printing 12 2007 

Private Healthcare 18 2007 

Protective Clothing 

& Equipment 6 2006 

Public Houses 23 2007 

R 

Rail Travel 6 2005 

Ready Meals 9 2006 

Recruitment Agencies 

(Permanent) 7 2007 

Recruitment Agencies 

(Temporary & Contract) 7 2007 

Renewable Energy 2 2006 

Restaurants 22 2007 

Retail Chemists & 

Drugstores 14 2006 

Road Haulage 21 2007 

S 

Sauces & Spreads 10 2007 

Shopfitting 13 2006 

Short Break Holidays 4 2001 

Slimming Market 8 2000 

Small Domestic Electrical 

Appliances 11 2007 

Snack Foods 18 2007 

Soft Drinks (Carbonated & 

Concentrated) 16 2006 

Soup Market 2 2007 

Sports Clothing & Footwear 11 2007 

Sports Equipment 14 2007 

Sports Sponsorship 6 2007 

Stationery 

(Personal & Office) 23 2007 

T 

Take Home Trade 16 2006 

Telecommunications 21 2007 

Timber & Joinery 18 2006 

Toiletries 20 2007 

Tourist Attractions 5 2001 

Toys & Games 21 2007 

Training 16 2007 

Travel Agents & Overseas 

Tour Operators 20 2007 

Tyre Industry 3 2006 

V 

Vehicle Security 8 2007 

Videoconferencing 4 2007 

Video & DVD Retail & Hire 8 2005 

W 

Wallcoverings 

& Ceramic Tiles 17 2006 

Waste Management 8 2005 

Water Industry 4 2007 

Windows & Doors 18 2006 

Wine 18 2007 

White Spirits 1 2005 

Market Reviews 

Catering Market 19 2007 

Clothing & Footwear 

Industry 11 2006 





UK Computer Market 11 2004 

Construction Industry 10 2006 

Contracted-Out Services 3 2007 

Defence Industry 7 2003 

Distribution Industry 9 2007 

DIY & Home Improvements 


Drinks Market 17 2006 

Energy Industry 6 2005 

Film Market 1 2006 

Food Industry 18 2007 

Healthcare Market 10 2005 

Insurance Industry 9 2007 

The Legal Services Market 1 2005 

Leisure & Recreation 

Market 15 2005 

Leisure in the Home 1 2007 

Leisure Outside the Home 1 2007 

Local Government Services 2 2007 

Mechanical Handling 1 2001 

Motor Industry 11 2006 

Music Industry 1 2006 

Office Equipment Industry 8 2006 

Packaging (Food & Drink) 


Passenger Travel in the UK 5 2007 

Pharmaceutical Industry 5 2005 

Process Plant Industry 1 2000 

The Publishing Industry 11 2006 

Railway Industry 2 2006 

Security Industry 11 2006 

Sports Market 11 2007 

Travel & Tourism Market 14 2007 

Market Assessment Reports 

A 

The ABC1 Consumer 2006 

Activity Holidays 2006 

Advertising Agencies 2007 

All-Inclusive Holidays 2000 

Alternative Healthcare 2005 

Audio-Visual Retailing 2000 

B 

Baby Foods 2006 

Baby Products 2005 

Baths and Showers 2000 

Beds, Bedrooms and 

Upholstered Furniture 2000 

Betting and Gaming 2002 


Book Retailing on the Internet 2007 

Bottled Water 2003 

Bridalwear 2002 

Business Postal Services in the UK 2002 

The Business Travel Market 2006 

C 

Cable and Satellite Services 2002 

Charity Funding 2005 

Childcare 2006 

Children’s Publishing 2005 

Clothing Retailers 2000 

Coffee & Sandwich Shops 2007 

Commercial Dynamics in 

Financial Services 2005 

Commercial Insurance for 

Small Businesses 2002 

Condiments and Sauces 2006 

Consumer Credit & Debt 2007 

Contact Centres 2007 

Contraception 2002 

Cooking & Eating 2007 

Cross-Border Shopping 2000 

The Cruise Market 2005 

Customer Loyalty in Financial Services 2000 

Customer Magazines & Contract 

Publishing 2007 

Customer Relationship Management 2006 

Customer Services in 

Financial Organisations 2007 

The C2DE Consumer 2006 

D 

Diet Foods 2007 

DINKY Market 2007 

Direct Insurance 2007 

Direct Mortgages 2006 

Domestic Lighting and 

Electrical Products 2000 

Domestic Telecommunications 2006 

E 

E-Commerce: The Internet 

Grocery Market 2007 

E-Commerce: The Internet Leisure & 

Entertainment Market 2006 

Electronic Banking 2000 

EMU — The Impact on the UK 

Financial Services Industry 2003 

E-Recruitment 2006 

E-Shopping 2002 

Estate Agents and Services 2007 





Ethnic Foods 2002 

European Electricity Industry 2007 

European Gas Industry 2007 

European Long-Term Insurance 2006 

European Oil & Gas Industry 2007 

The European Renewable 

Energy Industry 2005 

European Short Breaks 2001 

European Telecommunications 2002 

European Tourist Attractions 2007 

European Water Industry 2007 

Extended Financial Families 2005 

F 

Financial Services Marketing to ABs 2006 

Financial Services Marketing to ABC1s 2000 

Financial Services Marketing to 

C1C2DEs 2006 


Marketing to Over 60s 2004 

Financial Services Marketing to the 

Retired and Elderly 2007 

Financial Services Marketing to 

Start-Up Businesses and the 

Self-Employed 2003 

Financial Services Organisations on 

the Internet 2005 

The Fish Industry 2001 

Forecourt Retailing 2006 

Functional Foods 2007 

Funding in Higher Education 2002 

G 

General Insurance 2006 

Generation Y 2007 

Global Waste Management 2007 

Green and Ethical Consumer 2005 

Grey Consumer 2006 

H 

Healthy Eating 2006 

Holiday Purchasing Patterns 2006 

Home Entertainment 2002 

Hot Beverages 2007 

I 

In-Car Entertainment 2000 

Independent Financial Advisers 2003 

Individual Savings Accounts 2005 

Insurance Prospects 2002 


Internet Advertising 2007 

Internet Service Providers 2005 

Issues and Challenges in the UK Life 

Assurance Market 2002 

Issues in Higher Education Funding 2006 

IT Recruitment 2007 

L 

Lifestyle Magazines 2005 

Low-Fat & Reduced-Sugar Foods 2006 

The Luggage Market 2000 

M 

Marketing to Children 4-11 2003 

Marketing in the Digital 

Age 2006 

Medical & Health Insurance 2007 

Men and Women’s Buying Habits 2005 

Men’s Toiletries & 

Fragrances 2006 

Millennium Youth 2002 

Motor Finance 2005 

N 

The Newspaper Industry 2005 

Non-Food Sales in Supermarkets 2006 

Nutraceuticals 2005 

O 

Off-Trade Spirits 2004 

Opticians & Optical Goods 2006 

Organic Baby & Toddler 

Care 2007 

Organic Food 2006 

OTC Pharmaceuticals 2000 

Over-40s Consumer 2005 

P 

Pay TV 2004 

Pension Extenders 2002 

Pensions 2007 

Personal Banking 2003 

Personal Lines Insurance 2007 

Personal Loans 2006 

Pet Market 2007 

Plastic Cards in Europe 2005 

Plus-Size Fashion 2005 

Private Sector Opportunities in 

Education 2001 

Public Relations Industry 2007 

Public Transport 2001 





R 

The Railway Industry 2004 

Ready Meals 2001 

Recycling and the Environment 2000 

Retail Credit 2000 

Retail Development 2001 

S 

Savings & Investments 2007 

Saving Trends in the Eurozone 2002 

Singles Market 2007 

Shopping Centres 2006 

Short Breaks 2004 

Slimming Market 2007 

Small Businesses & Banks 2002 

Small Office Home Office Consumer 2001 

Small Office Home Office Products 2001 

The Soup Market 2001 

Sponsorship 2000 

Supermarket Own Labels 2007 

Supermarket Services 2007 

Sweet & Salty Snacks 2006 


T 

Teenage Fashionwear 2000 

Teenage Magazines 2007 

Teleworking 2003 

Trends in Food Shopping 2006 

Trends in Leisure Activities 2007 

Tweenagers 2005 

U 

Utilities 2007 

V 

Vegetarian Foods 2007 

Vehicle Breakdown Services 2007 

Vitamins, Minerals & Supplements 2007 

W 

White Goods 2000 

Women Over 45 2007 

Working Women 2006 

© Key Note Ltd 2007 

All rights reserved. 

No part of this publication may be reproduced, copied, stored in an electronic retrieval system or transmitted save with 

written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988. 

Published by Key Note Ltd, Field House, 72 Oldfield Road, Hampton, Middlesex TW12 2HQ, Telephone: 020-8481 8750 

Stringent efforts have been made by Key Note to ensure accuracy. However, due principally to the fact that data cannot 

always be verified, it is possible that some errors or omissions may occur; Key Note cannot accept responsibility for such 

errors or omissions. Details supplied by Key Note should only be used as an aid, to assist the making of business decisions, 

not as the sole basis for taking such decisions. 

Under the new Privacy and Electronic Communications Regulations 2004, it is unlawful for a business to make an unsolicited 

sales & marketing call to a corporate subscriber if it is either registered with CTPS or has requested NOT to receive such calls. 

Key Note Ltd holds and regularly updates (every 28 days) its data in accordance with the regulations and ensures that its 

data are compliant, as of the date created. It is the responsibility of the caller to ensure that these data are up to date; 

Key Note Ltd does not hold itself liable for any subsequent legalities. 

If you have any queries regarding the CTPS legislation you may find the following websites useful: 

www.informationcommissioner.gov.uk or www.prospectswetenhams.com

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