Drastic changes in the supermarket retail environment last year were primarily due to price deflation rather than a change in shopper behaviour, a new report from Kantar Worldpanel has claimed.
One of the most popular and frequently cited explanations for the change in the grocery market is that British consumers have fundamentally altered the way they shop, the report said. But analysis from Kantar Worldpanel, which collects data from over 30,000 British households, found there has been remarkably little change in how people buy groceries in the past five years.
The annual number of shops remains relatively stable with an average of 221 shops occurring annually, the same number it has been since 2010. Equally the number of items put in each basket has not changed significantly either, hovering just over 10 items per trip.
The report also dispelled the myth that shoppers are heavily flocking to convenience shops, which has grown, but grew at a slower rate than the overall market at just 1% throughout 2014. The report though did emphasis what has grown are the number of Tesco Expresses and Sainsbury's Locals, which has stolen market share from other smaller chains.
The report said: "The much vaunted move to convenience stores should more accurately be described as a move to the convenience stores of the major supermarkets. There hasn't been a fundamental shift in habits here, simply a change in who is winning."
So what has changed?
According the report there are three fundamental changes that have reshaped the supermarket retail environment.
The current grocery price war is by far the biggest issue affecting major supermarket players according to Kantar and it shows no signs of letting up. "The price war has driven the price of groceries down this year, meaning that several major grocers may have to contemplate resetting their margin expectations." it said. "Price cuts meant £182 million less was spent at the tills over the final 12 weeks of 2014."
Another major shift came from the focus over the last year of discounters Aldi and Lidl on the UK market and moving more mainstream with British consumers.
Finally, the report identifited the rise of online grocery shopping, which now accounts for 6.3% of the market. Although this seems likely a relatively small percentage, it is the area showing the largest growth. Kantar said players will have to rethink shelf space and the profitability of items on shelf in stores, as the trend is unlikely to slow down.