Supermarkets UK:The Changing Values of UK Consumers

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In a tough trading environment the ‘Big 6’

supermarkets are fighting over price and

quality

Mixed financial results

• Britain’s biggest retailer, Tesco, announced in early October one of its worst

sales performances in its UK stores for twenty years

• In contrast, Sainsbury’s reported on the same day that its like for like sales

were up 1.9% in the last quarter

• Morrisons has recently reported a 2.4% increase in Q3 sales, after stripping

out the impact of petrol sales

Value, quality or both?

• A week prior to the release of its sales performance , Tesco announced that it

was launching its £500m ‘Big Price Drop’ campaign.

• Sainsbury’s has launched it’s Live Well for Less campaign, focusing on price

and quality

• Even upmarket supermarket Waitrose with a reputation for quality has

announced that it will seek to improve on price. This includes a price match

Tesco on more than 1000 products, and the Essentials range.

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UK shoppers are increasingly motivated by

community and pleasure

• In an economic downturn, shoppers clearly want competitive prices and quality

• Yet Starcom MediaVest Group research using our proprietary research application ‘SpaceID’ shows that other factors are important to regular shoppers, namely Community and Pleasure

• With all supermarkets focused on price, there is less to differentiate them. Community and Pleasure are the new battlegrounds for supermarkets.

• Community means the importance to people of their local neighbourhood communities, but it also means the importance to people of their networks of friends and family

• Of course, quality is an important element of Pleasure. But Pleasure is also about self-gratification, enjoyment of life, fun, even of the shopping experience. Amid an economic downturn with all its doom and gloom, people want to enjoy themselves.

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SpaceID measures the

value ‘space’ brands

occupy in the minds of

consumers

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SpaceID shows how supermarkets can

protect their customer base and poach

customers from competitors

• Uncovering peoples real emotional values enables us to more carefully and

precisely target them and understand media affinities

• Most research tries to uncover underlying values by asking direct attitudinal

questions of people. However, it is very difficult for people to understand, let

alone articulate their values

• SpaceID moves beyond this direct approach. It is an award winning annual

study of 2,500 people, that has been running since 2008 (Awarded at launch

by the Market Research Society its prestigious ‘Research Breakthrough

Award’).

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SpaceID does this by using Semiometrie

• Semiometrie uncovers people’s motives and values by measuring their

subconscious reactions to 210 key words

• These words have been identified through a 10 year long process of

research and analytics, as the most powerful at explaining the full range of

human emotional values.

• Through SpaceID, respondents are also asked which media and brands they

use

• All the results, values and consumer preferences are then measured in

proximity to each other by SpaceID’s sophisticated software. The resultant

proximity rankings are then plotted on a series of maps that reveal

consumers’ value associations with brands and media.

• In the latest wave of SpaceID we examined the values and emotions of UK

supermarkets’ customer base

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SpaceID measures consumer values

along 4 key axes

Spiritual

Seeking enlightenment,

experiences and knowledge

Materialistic

Seeking well-being,

accumulating possessions

Idealistic

Driven by the way things

could be, value ideas and

optimism

PracticalDriven by the way things are, value realism and pragmatism

Community

A sense of belonging, what's in it

for all of us, prefer collaboration to

competition

Autonomy

Self-determination,, strong

sense of individualism, what's in

it for them, prefer competition to

collaboration

Responsibility

Do what they feel

they should do, not

want to do, value

safety, familiarity and

stability

Pleasure

Do what they want

to do, not ought to

do, value adventure

and taking risks

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Supermarket

UK findings

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Shoppers at different supermarkets have

different values – but most value community

and pleasure

Base – people spending £40 or more on grocery shopping per week

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Who’s winning? The supermarket values league tables - Community

Base – people spending £40 or more on grocery shopping per week

Supermarket Contribution of community

values to shopper value profiles

Sainsbury’s 41%

ASDA 38%

Tesco 27%

Waitrose 23%

Co-Op 23%

Morrisons -10%

#1 - Sainsbury’s attracts the most

community minded shoppers

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Who’s winning? The supermarket values league tables - Pleasure

Base – people spending £40 or more on grocery shopping per week

#1 – The Co-Operative attracts the

most pleasure driven shoppers

Supermarket Contribution of pleasure

values to shopper value profiles

Co-Op 41%

Tesco 25%

ASDA 14%

Sainsbury’s 11%

Waitrose -3%

Morrisons -45%

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Pen portraits

Pen Portraits

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The

Co-operative

shoppers

Passions TV Magazines Media

Behaviours

Animals

& Nature

E4 Closer Social

networking

Films 4Music Health and

Beauty

Newspapers

Photography

Independent

travel

Environment

Famers

markets

7%

13%

23%

41%

Idealism

Spiritual

Community

Pleasure

64% of the value profile of

Co-Op shoppers is around

Community and Pleasure

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Passions TV Magazines Media

Behaviours

Health and

fitness

Nickelodeon Closer Read online

product

reviews

Celebrities Sky1 BBC Good

Food

Watching TV

with friends

Design 4Music Marie Claire National

lottery

Horse racing Instant

messaging

Environment

Education

Olympics

Ethical

purchasing

Tesco

shoppers

52% of the value profile of

Tesco shoppers is around

Community and Pleasure14%

21%

25%

27%

Materialism

Idealism

Pleasure

Community

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Sainsbury’s

shoppers

52% of the value profile of

Sainsbury’s shoppers is

around Community and

Pleasure

Passions TV Magazines Media

Behaviours

Celebrities Sky1 Health &

Beauty

Posting

product

reviews

Olympics Nickelodeon Closer Price

comparison

websites

Local

community

issues

Glamour National

Lottery

Property Read online

product

reviews

Design

Ethnical

purchasing

11%

11%

35%

41%

Idealism

Pleasure

Spiritual

Community

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ASDA

shoppers

52% of the value profile of

ASDA shoppers is around

Community and Pleasure

Passions TV Magazines Media

Behaviours

Local

community

issues

Channel 4 Health and

Beauty

Entering

competitions

Celebrities Watch National

lottery

Fashion Watching TV

with partner

Daytime TV

Price

comparison

websites

14%

15%

29%

38%

Pleasure

Materialism

Idealism

Community

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Waitrose

shoppers

23% of the value profile of

Waitrose shoppers is around

Community

Passions TV Magazines Media

Behaviours

Education BBC2 Red Read online

product

reviews

Current

Affairs

Fiver Marie Claire Reading

blogs

Personal

Finance

More 4 Radio Times

Charity Work Five USA BBC Good

Food

Olympics Good

Housekeeping

DIY

3%

13%

23%

44%

Responsibility

Spiritual

Community

Practical

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Morrisons

shoppers

Values of Responsibility and

Autonomy are more

important to Morrisons

customers than Community

and Pleasure

Passions TV Magazines Media

Behaviours

Documentary Cartoon

Network

Woman’s

Own

Playing

online Bingo

Rugby Food

Channel

OK Voting on TV

programme

DIY Sky Atlantic Now

Personal

finance

Smash! Hits What’s On

TV

Readers

Digest

0%

10%

24%

45%

Idealism

Autonomy

Spiritual

Responsibility

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To win more share, supermarkets should

target the rival shoppers with value profiles

closest to their own

Base – people spending £40 or more on grocery shopping per week

Sainsbury’s and ASDA will need to compete

strongly in 2012; Waitrose is especially vulnerable

to competitive poaching

Supermarket Closest Community

value profile

Closest Pleasure

value profile

Co-Op Waitrose Tesco

Tesco Waitrose ASDA

Sainsbury’s ASDA ASDA

ASDA Sainsbury’s Sainsbury’s

Waitrose Co-op Sainsbury’s

Morrisons Co-op Waitrose

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Summary and

implications

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Summary and Implications

• Whilst the economic climate remains gloomy, and consumers continue to

seek value in-store, they are also increasingly drawn to values of community

and pleasure (probably as an antidote to the austerity of the times). They

want shopping experiences that are pleasurable and seek brands that

exhibit community values.

• In 2012 Supermarkets will need to continue to complete on price and value,

but our research indicates that those brands that can differentiate

themselves on community and pleasure values will gain an extra advantage

– and a greater share of the changing consumer’s wallet.

• Sainsbury’s and The Co-Operative are currently best suited to meet this

shift. Morrisons has a very different profile of consumer values –

suggesting there will be a strong degree of consumer loyalty. Waitrose

looks to be most vulnerable in 2012.

• Supermarkets can appeal to the new consumer values of community and

pleasure through the way they act in-store and in their communications.

Associating with the right media products, with similar values and creating

rich consumer experiences are two potentially successful strategies to win

in 2012.

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About Starcom MediaVest

Group and Supermarket UK

Supermarket UK is an industry-wide series of studies into the changing values and behaviours of shoppers to the big six supermarkets – Tesco, ASDA, Waitrose, Sainsbury’s, Morrisons and Co-Op. It will investigate the effect of societal changes - including the economy, new technologies and social media -on supermarket consumer behaviour, and examine trends for the future. This report is the first in a series - a second phase of research will be released later this year and will culminate in a full report to be published in 2012.

Starcom MediaVest Group (SMG) is a global leader in communications strategy, media buying and management, response media, internet and digital communications. SMG operates two separate agencies under the group banner –MediaVest and Starcom– each built around a distinct focus and expertise set, representing global brands such as Proctor & Gamble, Samsung and Honda.

SMG is part of Publicis Groupe, the world’s second largest media counsel and buying group, the world’s third largest communications group and the world’s leading supplier of media services to FMCG brands.

To discover more insight into your retail brands, or to see how SMG’s unique approaches to insight, planning and analytics can deliver results for your business, please be in touch.