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Bryan roberts, Planet Retail

Bryan roberts, Planet Retail



Bryan roberts, Planet Retail, presentation at Building Supermarkets 2010.

Bryan roberts, Planet Retail, presentation at Building Supermarkets 2010.



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  • Five largest have over 80% market share – others inc Waitrose Iceland, Discounters & Farm Foods.Other others includes multiples, symbols, independents etc
  • Five largest have 54% market share – around 55 companies with grocery sales of over £100 million

Bryan roberts, Planet Retail Bryan roberts, Planet Retail Presentation Transcript

  • Update on market activity
    Building Supermarkets, July 2010
    Planet Retail Ltd
  • Agenda
    • Overview & introduction
    • Where the Big 4 (Big 5?) are going
    • Whither the discount threat?
    • ‘New’ entrants & partnerships
    • Likely drivers & impact on store development
    • Conclusions & outlook
  • Overview & introduction
  • Introduction
    • We need to think beyond ‘supermarkets’.
    • Big 4 (Big 5?) all pursuing multi-channel .
    • Discounters here to stay despite short-term ‘problems’.
    • Non-traditional food retail is where the growth is.
    • Drivers for development set to include convenience, non-food, planning constraints & e-commerce.
  • UK food retail – the traditional view
  • UK food retail – the non-traditional view
  • Strategies of the major players
    • Typical new grocery space per year: 2.5 million sq ft.
    • 2010 best case: 5 million sq ft.
    • Clearly no slowdown in the pace of development!
    • Rolling out Tesco Direct desks in many larger stores to offer full non-food range.
    • Tesco Bank and Tesco Mobile desks also appearing in larger stores.
    • Aim of reaching 2,000 Express c-stores (1,100+ currently).
    • Lack of public ambitions for Homeplus.
    • Tesco Extra annual growth likely to slow to a trickle.
    • 2 dark stores trading so far (more to come).
    • Organic growth plans for 2010 split 50/50 between new stores & extensions (10 each).
    • Five year target of increasing Asda Livings from 25 to 150 units.
    • Netto deal has enabled Asda to smash target of 100 smaller supermarkets (up from current 25).
    • 193 8,000 sq ft Asdas will come on stream regulators permitting.
    • Non-food leadership will require more substantial investment/acquisitions.
    • Service counters, Click & Collect gaining pace, new dark store for London to join existing unit in Leeds.
    • On track for 2.5 million sq ft, or 15%, of gross new space growth in two years to March 2011.
    • New openings focused on North & Scotland.
    • Smaller supermarkets & c-stores a focus of growth.
    • Expansions of existing stores.
    • Online & financial services a priority.
    • Looking to build on progress in non-food.
    • Benefiting from Nectar loyalty scheme with 17 million members.
    • Not the same level of non-food space pressure, although the chain is opening Techno centres and has piloted a Peacocks concession in Bradford store.
    • Small stores now very much an acceptable alternative to standard big boxes as it journeys from “National to Nationwide”.
    • No e-commerce offer to accommodate (yet?).
    • Sustainability agenda is being pursued in a quiet and modest fashion.
    • Main focus to continue to be on integration of Somerfield & rebranding of stores to common identity - 65% of stores now rebranded.
    • Strong uplift in sales from rebranded stores.
    • Somerfield deal expanded presence in supermarkets.
    • First signs of e-commerce (electricals & furniture kiosks being piloted in 3 larger stores).
    • Further absorption of regional co-ops?
  • Commonalities
    • Small format food stores a universal trend following Asda’s Netto deal.
    • Morrisons is the only exception to prove the e-commerce rule.
    • Non-food key, but only Tesco & Asda making specialist play.
    • Click & Collect becoming commonplace.
    • Growing importance of ancillary services such as banking, foodservice, photo, etc.
    • Sustainability remains a major factor despite the downturn.
    • Heading towards the resurgence of the high street – but within a supermarket.
  • Whither the discount threat?
  • Is the discount threat fading?
  • Consistent under-delivery on growth targets…
    • 2008: Aldi claimed it would “open a store a week for the foreseeable future”.
    • New stores: 2008 – 55; 2009 – 15.
    • 2008: Lidl states aim of 40 – 50 new stores per year.
    • New stores: 2008 – 49; 2009 – 36.
    • 2008: Netto states: “Plans to open around 1,000 additional stores in the long-term”.
    • 2010: Sells up to Asda.
  • …but still long-term potential
    • Lidl set to be trading through 580 stores by end-2010.
    • Aldi on track for 430 units by end of the year.
    • Combined total of 1,000 stores could conceivably reach at least 2,000.
    • Main limit on growth: site availability, particularly for the more fastidious Aldi.
    • Despite the press coverage dying down, both chains are making steady progress and gaining consumer acceptance.
  • ‘New’ entrants & partnerships
  • Some unfamiliar names set to grow the fastest
    Forecast % growth , 2010/15
    Source: Planet Retail Ltd – www.planetretail.net
  • Many non-trad retailers looking to build food assortments
  • Partnerships progressing…
    • Seven Waitrose stores stocking a number of H&B categories consisting of Boots own labels alongside a number of leading brands.
    • Initial customer feedback reportedly ‘mixed’.
  • Partnerships progressing
    • Three Boots stores stocking a larger range of lunchtime and convenience food, including Essential Waitrose: 1,500 products supplied by Waitrose.
  • Partnerships progressing…
    • Partnership with Welcome Break for MSA c-stores.
    • 11 stores trading so far.
    • Heralded the opening of the first sub-3,000 sq ft c-store in Cambridge in June 2010.
    • Small stores reportedly trading well.
  • Partnerships progressing…
    • Other retailers exploiting opportunities.
  • Likely drivers and impact on store development
  • Key drivers for likely growth strategy
    • Zoning & planning framework making big box more problematic.
    • Tesco’s ubiquity will create more problems for them.
    • Big box bottleneck encouraging store extensions & mezzanines.
    • All retailers shifting focus towards small box development.
    • Rising importance of e-commerce.
  • Non-food formats generating higher ROI
    Asda: ROI by Format
    Source: Planet Retail Ltd – www.planetretail.net
  • E-commerce impacting store development strategy
    • Both Tesco & Asda augmenting instore picking for grocery with the opening of dark stores – greater efficiency & less inconvenience. Ocado plotting a new DC in Midlands.
    • E.g. Asda Leeds: 50,000 sq ft centre housing 500 colleagues.
    • Much more efficient – pickers pick twice as many orders per hour (approx 250 per hour) = fourfold increase in the # of delivery slots (anywhere between 12,000-15,000 per week using 50 vans).
    • Customers can have their bread baked to order. A full state-of-the-art bakery is included - a colleague arrives at midnight and bakes only what's been ordered that day ensuring no waste.
    • Zero waste to landfill. All waste is returned to depot where it's recycled.
  • Outlook
    • No real sign of the space race abating, but clear strategic shift towards smaller stores, auxiliary services & e-commerce.
    • Food market still the preserve of the big 5, but aggressive incursions from all sides.
    • Fastest growing food retailers are non-specialists.
    • Discount not the threat it was a year ago, but will steadily build market share.
    • Retailers becoming more innovative & collaborative to generate growth above & beyond new space.
    • Mounting evidence that supermarkets are chasing market share of consumer spending, not just food.
  • www.planetretail.net