RN/ RI Survey

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Special Report

New Survey Gets to the Heart of Irish Shopping Habits New research from Retail News, in association with Retail Ireland, is required reading for Irish retailers and brand owners.

NEW research from Retail News, in next 12 months, with that figure rising to 52% for grocery shoppers. Female grocery association with Retail Ireland, reveals that shoppers are the most likely (55%), with shopping around is very much the norm 18-24 years (64%) and 35-44 year olds (63%) when it comes to grocery shopping, while price and value remain key concerns for also most likely to shop around. It comes as consumers. no surprise that older generations are more fixed in their behaviour, with 42% of 45-54 “These findings will be of interest to year olds and 36% of 65+ likely to shop grocery retailers who have been at the very around more next year. Income and working sharp end of this recession,” stresses Retail News Editorial Director, Kathleen Belton. status is clearly a factor here with students “Competition remains very intense in the and unemployed respondents most likely to sector and there is no sign that this will ease. shop around.

“Shopping around is par for the course Even though shoppers are more optimistic these days, and from this research we as the economy improves, they remain very can see that it is only going to increase,” careful with their money. Price, value and comments Stephen Lynam, Director, Retail special offers remain absolutely vital if a Ireland. “Over half of shoppers say they will retailer is to survive”.

Stephen Lynam, increase the practice. We have seen from The Shopper Attitude Survey, carried Director, Retail Ireland other sources that typically grocery shoppers out by Millward Brown on behalf of Retail News and Retail Ireland, revealed that these days go to about four different supermarkets every month, compared to one or two during almost half of all adults (47%) will shop around more in the

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Special Report Thinking about your grocery shopping and shopping around in the next 12 months, do you think you will...

Shopping around in the next 12 months. Base: All Grocery Shopper, Republic of Ireland (n=607).

the boom. Competition is only going to get fiercer.”

The savvy shopper is still a feature, with 71% or respondents claiming they actively seek out cheaper ways of living.

The Power of Price When it comes to grocery shopping, price remains

key (38%) as the reason for choosing a product – this rises to 40% when it comes to grocery shoppers. Value for money is also hugely important to consumers (25%), as is product quality (17% with all shoppers and 18% with grocery shoppers).

However, when all factors are considered, we see

Irish made (40/42%) a more salient feature for people and grocery shoppers. Brand reliability is also is a factor, with 29% claiming it is important to them when choosing a product.

“Highlighting how price-sensitive Irish grocery shoppers are, the survey shows that ‘price’ and

Thinking about what is important to you when choosing a product for your groceryshopping, which is most important to you?

What’s Important to Shoppers When Making aPurchase When Grocery Shopping: First Mentions.

Base: All Grocery Shopper, Republic of Ireland (n=607).

‘value for money’, with a combined share of 63% of first mentions, are king,” Stephen Lynam explains.

“This is hardly surprising, given the drop in income that consumers suffered over the last five years. The grocery sector has responded to this: the price of food and non-alcoholic beverages fell by over 6% in the 2008-2012 period and has been stable since.”

The continued quest for cheaper goods “poses huge difficulties for grocery retailers”, according to the Retail Ireland Director, “as the price of everything from legal and accountancy services to rates and water charges has gone up and up. Margins have been squeezed.”

Lynam also points out that while being Irish made is of primary importance to only 8% of grocery shoppers, 42% of shoppers say it has some influence on their spending decisions.

Brands do not, it seems, figure very highly in the minds of Irish shoppers, however. Only 2% give brands a first mention when it comes to choosing a grocery product and less than a third give them any mention at all. “This might come as a disappointment to many brand owners, though the fact that 61% say the products they buy are “of good quality” means there is still room for well-made and trustworthy products in the shopping baskets of Ireland,” Lynam explains.

Big Ticket Buyers?

Indeed, 40% of the Irish population have held off with a big ticket purchase – higher among grocery shoppers at 45%. Those aged between 25 and 34 (49%) and over 55 are less likely to have held off, however, suggesting that mortgages and other financial commitments may have impacted the other age groups’ willingness to spend here.

“This shows that a

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Special Report Thinking about what is important to you when choosing a product for your groceryshopping, which is most important to you?

What’s Important to Shoppers When Making a Purchase When Grocery Shopping: Total Mentions.

Base: All Grocery Shopper, Republic of Ireland (n=607).

sizeable chunk of people, just short of a majority, have deferred ‘big ticket items’ as the recession dragged on,” Lynam notes.

“The implications for the retail sector of this are huge, and retail sales data shows it has a knock-on effect

on spending on smaller items too. All the evidence suggests that if a shopper has decided not to buy that new car or new sofa, they will probably be less likely to splash out on their weekly shop too.”

The floodgates of

spending are unlikely to open in the next 12 months, according to Brendan Beere, Client Director, at Millward Brown, with only 8% of respondents “very likely” to make a big spend purchase that they may not have considered in the last two

Which of the following do you use when ordering or purchasing your grocery shopping nowadays?

What consumers use when ordering or purchasing grocery shopping. Base: All Grocery Shopper, Republic of Ireland (n=607).

years, with a further 19% “fairly likely” to do so.

While this is modest growth, Lynam nonetheless feels that it is positive that “over a quarter say that they will make a big purchase that they have hitherto deferred. Retail sales data so far this year shows a marked increase in the sales of cars and furniture, for example,” he notes. “This is good news for the economy, and will have a knock-on effect on sectors like grocery, with more money circulating in the domestic economy - a rising tide lifts all boats, and all that.”

The Online Agenda Online shopping behaviour will increase for about 20% of the population in the next 12 months – unsurprisingly, younger consumers will be the most likely to grow their online spend.

“These results show that bricks and mortar remains important, despite all the hype about online,” stresses Stephen Lynam. “Data from the CSO’s Information Society survey in 2013 suggests that only 4% of consumers purchase grocery products online, compared to 30% who booked their holiday online and 20% who purchased clothing. While savvy grocery retailers know that online grocery sales will surely grow, they will know it is a slow burner.”

More recent innovations, such as grocery apps and QR codes have a low penetration of usage for information.

Interestingly, social media sites also have low usage levels for information on grocery shopping, with the store website itself the most important information source for consumers (16%).

That said – about 30% of shoppers use at least one of these.

“Nearly three quarters of grocery shoppers still don’t use apps or social media when planning their food shopping. On the face of it, this is a remarkable figure,” admits Lynam, “though

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Special Report Online and Digital Behaviour in Grocery Shopping

Online and Digital Behaviour in Grocery Shopping. Base: All Grocery Shopper, Republic of Ireland (n=607).

retailers should ignore these phenomena at their peril. The results highlight again how far online has to go in this country in terms of influencing grocery shopping trends.”

He points out that Retail Ireland’s own research from a couple of years ago showed that barriers to online trading, such as start-up costs and the high costs of delivery in this country

represented real barriers to online trading and grocery retailers trying to establish online selling will need to grapple with these problems.

The CSO estimates that 46% of consumers purchased something online last year, up from 36% in 2010. “It is noteworthy that more purchases were made from Irish online retailers than from retailers based abroad,

which shows that retailers who are known and trusted

by Irish consumers are still in the running to win their fair share of the online spend,” Lynam stressed.

The All Pervasive Loyalty Card When shopping, the loyalty card dominates with 47% of grocery shoppers using them. Describing this as “an interesting finding”,

Attitudes to Shopper Behaviour

Attitudes to Shopper Behaviour. Base: All Grocery Shopper, Republic of Ireland (n=607).

Stephen Lynam noted how, “as well as being good for consumers, they can be hugely beneficial to the large grocery retailers who have them in their armoury.”

At this year’s Retail Ireland MasterCard Annual Conference, Baroness Lucy Neville Rolfe, formerly of the board of Tesco plc, remarked that their loyalty card intelligence gave them great insight into consumer behaviour; “When we started to introduce a lot of organic lines in response to prosperity and environmental concerns, our analysis showed that organic enthusiasts also drank a lot of wine, so we introduced organic wine, and we discovered a strong correlation between first time nappy purchase and beer sales.”

Positive Outlook for the Future Probably the best news to come out of the survey, however, is that overall shopper outlook is generally positive. 51% of respondents and 52% of grocery shoppers claim that they are more positive about their financial status compared to 12 months ago.

A massive 78% of grocery shoppers, however, admitted to taking more notice and buying more goods on special offer than they did pre-recession, while 66% of grocery shoppers purchase more own label products than they did, with 69% of grocery shoppers confessing to planning their grocery shopping and personal spending more than they did before the recession.

“The good news is that fully half of grocery shoppers are more positive about their financial situation than they were last year. This is no doubt influenced by factors like rising property values in Dublin, a reduction in unemployment and

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Special Report BIG TICKET ITEMS: In the last 2 years or so, have you delayed any bigger spend purchases (such as car, furniture, and holidays) or not?

In the next 12 months, how likely are you to make a big spend purchase that you may not have considered in the past 2 years?

Brendan Beere, Client Director, Millward Brown.

evidence of pay rises in many sectors of the economy,”Lynam adds.

However, it’s not all upbeat, and “the bad news for retailers is that the vast majority of shoppers are much more cautious about how they spend their money, even if they have more of it in their wallets,” he warns.

“Linked to the finding that brands are not uppermost in shoppers’ minds is the finding that 66% of shoppers buy more own label products than before the recession. We estimate that about half the products now sold in supermarkets are own brand- which is close to the European average.

Big Ticket Items. “Base: All Adults Aged 15+ (n=1,000).

“Grocery retailers will also not at all be surprised at all by the finding that 78% of grocery shoppers buy more goods on special offer than they did before”, Lynam notes.

“Promotions are now hard-wired into the grocery offering and from the

Methodology & Fieldwork THIS survey was conducted by means of the Millward Brown Omnibus, a twice monthly survey of a nationally representative sample of 1,000 adults. The sample is quota controlled to be representative of the Irish population. All interviews were conducted face-to-face in-home across 64 randomly selected sampling points. Sampling points are randomly selected to reflect the geographical distribution of the population. Respondents are selected on a quota basis, with interlocking controls by sex, age, marital status and social class. Results are accurate within +/- 3% of the total population.

Interviewing took place from July 30 to August 13, 2014

results of our survey, consumers are happy about that.

“If the Irish consumer could be summed up in one phrase on the basis of these findings,” Lynam concludes, “it would be ‘optimistic but cautious’.”

“Recession shopper behaviour has been normalised for the Irish consumer in 2014,” summarises Brendan Beere, Client Director, Millward Brown. “While consumers are more optimistic about their financial outlook, they remain cautious, giving due consideration to all types of spend from grocery to big ticket items. Value and price are primary drivers in choice but brands can still play a meaningful role by emphasising their quality, reliability and indeed their Irish credentials.”