Tuesday, 29 April 2008

Golden churn

Shoppers are leaving their favoured supermarkets.

Customer defections have increased by some 38% between 2005 -2007.
This ‘Churn’ where consumers switch from one brand of supermarket to another was highest in Britain .

The Retail Bulletin points to; not being recognised as a valuable customer, unhelpful staff, and ineffective call centres as major reasons for customers leaving a favorite.

However another really useful indicator of Churn rates is Price. There is a downward migration in retail as budgets are squeezed and a lot more families will be discovering Primark and Morrison's. The rising share prices of the discounters will be in contrast to the shrinking disposable income of consumers.

2008 will almost certainly see an increase in this movement to the budget brands and possibly the first cracks in Tesco’s domination of the grocery market as customers really don’t have the cash to spare on anything that is non essential and move lower down the food chain, as it were. Shopping basket switching is actually a very successful way of saving money, unlike utility or transportation ’choice’

The other upside is a lot less television programs being made about buying or rearing “happy poultry”

We may well all become too poor for guilt.



James Higham said...

This trend is going to impact the local retailer more than the global chain in the end. Eventually the Tescos of the world will have to downgrade to compete.

Anonymous said...

I can't be doing with Asda becuase they blare bloody pop music at you, but Aldi has its merits. Oh yes. Or ach ja.

Anonymous said...

I always shop at the back of supermarkets in the skips. Its called make do and mend !!

Very inexpensive.Welcome to my world boys and get used to it.

Nick Drew said...

Seems to me Tesco very astutely spotted the economic downturn 12 months ago - they have clearly switched away from the Long March Up-market, and have retrenched on a basic price-cutting strategy, as in former times

Bill Quango MP said...

People will move down. It can be quite a delight for Mrs Middle Class to try Sainsburys instead of Marks and find that its nearly as good, but saves 20%. And the clothing! my word.. A pack of children's tights for only 2/3 the price she would normally pay!

If she ever goes down to Tesco the circle is completed again, and so on all the way down to Lidl, where its fantastic value for things that you don't quite know what they are, from countries you've never heard of.

I've just started switching from Tesco to Morrison. Tesco was king because it was bigger, but Morrisons is now cheaper.

Purely from observation I would say Morrisons is slightly poorer for dairy and vegetables, but superior for crisps and biscuits and frozen desserts.

I think I may now have to be reclassified C1/C2, but at least I can get Supermousse.

CityUnslicker said...

I think morrisons is better for fish than sainsbury's or tesco.

Anonymous said...

Aldi is very good at Dundee Cake, though unsurprisingly they don't call it that.

Anonymous said...

No recession, says Waitrose boss

Writing on his daily blog, Price said: “I don’t believe we’re in any kind of recession, rather a slowdown, in which customers are being far more careful about the value choices they make"

Of course, he is sitting rather high up the "food chain" isn't he?

Old BE said...

Without a car I have little choice but to go to Tesco. Sainsbury's is a little smarter, but still has terrible availability on busy days. I find I spend a lot less in Tesco but I can't work out whether it's because I try to get out more quickly or the prices are actually lower...

Anonymous said...

You’ve got it all wrong. Morrisons’ saving grace is their sausage rolls. Amazing.

( I’m not a fatty)

Old BE said...

No recession, says Waitrose boss

This is similar to my house-price-crash denial in that it doesn't stand up to any kind of logical scrutiny but it's nice to pretend.

Anonymous said...

Why would you need a call centre for a supermarket?

Bill Quango MP said...

The call centres are for the online delivery business and customer services.

Electricals / clothing / telecoms and financial products now making up a large part of the supermarkets business.

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