Table of Contents

Grocery Retailers 2006 - Verdict Research: The definitive analysis of grocery retailing in the UK, with market sizes and trends, key retailer profiles detailed strategic analysis.

Product Code: dmvt0312

Publication Date: 04-Dec-2005

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Overview

Introduction

Verdict Research: The grocery market has changed significantly after Morrison's takeover of Safeway. This report analyses how this has impacted the market and looks in detail at Asda's slowdown in growth, Sainsbury's fledgling recovery, Iceland under new ownership and a potential takeover of Somerfield. While Tesco's outperformance is a rare constant, the retailer remains highly dynamic.

Scope

· Market size broken down by channel

· In depth profile and appraisal of all the leading grocery retailers.

· Market shares for leading players 2000-2005.

· Analysis of key issues that will shape the market over 2006.

Highlights

A three year period of grocery deflation will save UK consumers a total of more than £3bn by the end of 2006 as intense price competition among the key players continues.

Tesco's market share gains over the past five years have amounted to more than six times that of the rest of the current Top 4 put together. Since 2000 Tesco has increased its share by 6.1 percentage points.

The Morrison-Safeway conversion programme has shifted the dynamic in UK grocery retailing in 2005, dealing a timely fillip to Sainsbury while increasing the pressure on Asda. It is clear that Morrison, to date, has failed to satisfy many ex-Safeway shoppers.

Reasons to Purchase

· Benchmarks retailer performance against the market.

· Identifies the growth prospects of key players in grocery retailing.

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CHAPTER 1 EXECUTIVE SUMMARY	16
Key Findings	16
Main Conclusions	17
CHAPTER 2 MARKET ANALYSIS	22
Market Definition	22
Retail Expenditure Growth	24
Grocery Market Size and Structure	24
Sales by Retailer Type	28
Store Numbers by Retailer Type	30
Selling Space by Retailer Type	32
Grocery Market Store Development	34
Sales Density by Retailer Type	36
Superstores	38
Smaller Supermarkets and Convenience Stores	40
Food Specialists	42
Other Stores	45
Food and Grocery Expenditure	48
Growth Rates	50
Channels of Distribution	51
CHAPTER 3 COMPANY DATA ANALYSIS	53
Market Shares	53
Key Operating Statistics	54
Space Allocation	59
Advertising	64
CHAPTER 4 OUTLOOK	67
Overview	67
Tesco vs the Rest 2000-2005	67
Share of Total Retail Expenditure	69
Diversification Development	70
Rise of Health Issues	71
Margins Under Pressure	72
Safeway Fallout	74
Customer Relationship Building	76
Opportunities in Non-food and Services	77
CHAPTER 5 ASDA WAL-MART	79
Company Overview	79
Market Share	81
Trading Record	82
Store Portfolio	84
Retail Proposition	86
Space Allocation	89
Outlook	90
CHAPTER 6 CO-OPERATIVE GROUP	93
Company Overview	93
Market Share	95
Trading Record	96
Store Portfolio	98
Retail Proposition	100
Space Allocation	102
Outlook	103
CHAPTER 7 ICELAND	105
Company Overview	105
Market Share	107
Trading Record	108
Store Portfolio	110
Retail Proposition	112
Space Allocation	114
Outlook	115
CHAPTER 8 MARKS & SPENCER	117
Company Overview	117
Market Share	119
Trading Record	120
Store Portfolio	122
Retail Proposition	124
Space Allocation	126
Outlook	127
CHAPTER 9 WM MORRISON	130
Company Overview	130
Market Shares	132
Trading Record	134
Store Portfolio	136
Retail Proposition	138
Space Allocation	141
Outlook	142
CHAPTER 10 SAINSBURY	145
Company Overview	145
Market Share	147
Trading Record	149
Store Portfolio	151
Retail Proposition	153
Space Allocation	156
Outlook	157
CHAPTER 11 SOMERFIELD GROUP	160
Company Overview	160
Market Share	162
Trading Record	163
Store Portfolio	165
Retail Proposition - Somerfield	169
Retail Proposition - Kwik Save	171
Space Allocation	172
Outlook	174
CHAPTER 12 TESCO	176
Company Overview	176
Market Share	178
Trading Record	180
Store Portfolio	182
Retail Proposition	186
Space Allocation	189
Outlook	190
CHAPTER 13 WAITROSE	193
Company Overview	193
Market Share	195
Trading Record	196
Store Portfolio	198
Retail Proposition	200
Space Allocation	203
Outlook	204
CHAPTER 14 HARD DISCOUNTERS	207
Company Overviews	207
Market Shares	209
Trading Records	211
Store Portfolios	212
Retail Propositions	214
Space Allocations	216
Outlooks	217
CHAPTER 15 GLOSSARY	220
Financial Statistics - VAT	220
Trading Profile	220
Physical Development	220
Abbreviations	221
List of Tables
Table 1: Grocery market definition 2005	23
Table 2: Total grocery market size 1995-2005e	26
Table 3: Total grocery market size by retailer type 1995-2005e	28
Table 4: Total grocery store numbers by retailer type 1995-2005e	30
Table 5: Total grocery space by retailer type 1995-2005e	32
Table 6: Annual sales densities by retailer type 1995-2005e	36
Table 7: Channel overview: superstores 1995-2005e	38
Table 8: Channel overview: smaller supermarkets and convenience stores 1995-2005e	40
Table 9: Channel overview: food specialists 1995-2005e	42
Table 10: Food specialists' sales 1995-2005e	43
Table 11: Channel overview: other stores 1995-2005e	45
Table 12: Other retailers' sales 1995-2005e	46
Table 13: Consumer spending in core food and grocery product categories at current and constant (2002) prices 1995-2005e	48
Table 14: Channels of distribution 2000-2005e	51
Table 15: Retailers share of the total grocery market 2000-2005e	53
Table 16: Leading grocery retailers key operating statistics 2004/05	54
Table 17: Leading grocery retailers store profile statistics 2004/05	56
Table 18: Leading grocery retailers space allocation 2005	59
Table 19: Advertising media expenditure 2000-2004	64
Table 20: Leading grocery multiples advertising expenditure by media as % of total 2004	65
Table 21: Asda Wal-Mart Company Overview	79
Table 22: Asda key operating statistics 2000-2005e	80
Table 23: Asda trading record 1995-2005e	82
Table 24: Asda turnover growth analysis 2001-2005e	82
Table 25: Asda store profile 1995-2005e	84
Table 26: George standalone and Asda Living portfolio by year of opening 2003-2005	84
Table 27: Asda retail proposition	86
Table 28: Asda sales mix 2005	87
Table 29: Asda space allocation 2005	89
Table 30: Co-operative Group Company Overview	93
Table 31: The Co-operative Group food retail key operating statistics 2001-2006e	94
Table 32: Co-operative Group trading record 1995-2005	96
Table 33: Co-operative Group food retail trading record 2000-2006e	97
Table 34: Co-operative Group store profile 1997-2006e	98
Table 35: Co-operative Group store analysis 2005	99
Table 36: Co-operative Group retail proposition	100
Table 37: Co-operative Group food division sales mix 2004/05	101
Table 38: Co-operative Group space allocation 2005	102
Table 39: Iceland Company Overview	105
Table 40: Iceland key operating statistics 2001-2006e	106
Table 41: Iceland trading record 1995-2006e	108
Table 42: Iceland store profile 1995-2006e	110
Table 43: Iceland retail proposition	112
Table 44: Iceland sales mix 2004/05	113
Table 45: Iceland space allocation 2005	114
Table 46: Marks & Spencer Company Overview	117
Table 47: Marks & Spencer key operating statistics 2004-2005	118
Table 48: M&S UK trading record 1995-2005	120
Table 49: M&S food sales 2000-2006e	120
Table 50: Marks & Spencer store portfolio 1995-2005	122
Table 51: Marks & Spencer food space analysis 2000-2006e	122
Table 52: M&S retail proposition	124
Table 53: M&S grocery sales mix 2004/05	125
Table 54: M&S space allocation 2005	126
Table 55: Wm Morrison Company Overview	130
Table 56: Wm Morrison key operating statistics 2000-2005e	131
Table 57: Wm Morrison trading record 1995-2006e	134
Table 58: Wm Morrison like-for-like sales performance 2004/05	135
Table 59: Wm Morrison store profile 1995-2006e	136
Table 60: Morrison retail proposition	138
Table 61: Wm Morrison sales mix 2004/05	139
Table 62: Morrison space allocation 2005	141
Table 63: Sainsbury Company Overview	145
Table 64: Sainsbury UK retail key operating statistics 2001-2006e	146
Table 65: Sainsbury supermarkets trading performance 1995-2006e	149
Table 66: Sainsbury supermarket turnover growth analysis 2000-2005	149
Table 67: Sainsbury supermarkets store profile 1995-2006e	151
Table 68: Sainsbury supermarkets store profile by type 2005-2006e	151
Table 69: Sainsbury retail proposition	153
Table 70: Sainsbury sales mix 2004/05	154
Table 71: Sainsbury space allocation 2005	156
Table 72: Somerfield Group Company Overview	160
Table 73: Somerfield key operating statistics 2001-2006e	161
Table 74: Somerfield Group trading record 1995-2006e	163
Table 75: Somerfield Group trading by fascia 2003/04-2004/05	164
Table 76: Somerfield Group store profile 1995-2006e	165
Table 77: Somerfield Group store analysis April 2005 vs April 2004	166
Table 78: Somerfield store formats 2006	167
Table 79: Somerfield retail proposition	169
Table 80: Somerfield sales mix 2004/05	170
Table 81: Kwik Save retail proposition	171
Table 82: Kwik Save sales mix 2004/05	171
Table 83: Somerfield and Kwik Save space allocation 2005	172
Table 84: Tesco Company Overview	176
Table 85: Tesco key operating statistics 2001-2006e	177
Table 86: Tesco trading record 1995-2006e	180
Table 87: UK sales growth (incl VAT) 2000-2005	180
Table 88: Tesco UK store profile 1995-2006e	182
Table 89: Number of UK Tesco stores by format 2000-2005	184
Table 90: Tesco store format profile August 2005	184
Table 91: Tesco UK stores - size analysis 2004 and 2005	185
Table 92: Tesco retail proposition	186
Table 93: Tesco sales mix 2004/05	187
Table 94: Tesco space allocation 2005	189
Table 95: Waitrose Company Overview	193
Table 96: Waitrose key operating statistics 2001-2006e	194
Table 97: Waitrose trading record 1995-2006e	196
Table 98: Waitrose store profile 1995-2006e	198
Table 99: Waitrose store portfolio development 2005/06	198
Table 100: Waitrose retail proposition 2006	200
Table 101: Waitrose sales mix 2004/05	201
Table 102: Waitrose space allocation 2005	203
Table 103: Hard discounters company overviews	207
Table 104: Hard discounters key operating statistics 2005/06	208
Table 105: Hard discounters estimated sales record 1996-2006e	211
Table 106: Hard discounters estimated store numbers 1995-2006e	212
Table 107: Hard discounters space allocation 2005	216
List of Figures
Figure 1: Total growth in consumer expenditure in major retail sectors 2000-2005e	24
Figure 2: Grocery market by key channel 1995 and 2005	25
Figure 3: Share of total grocery market store numbers by type of retailer 1995 and 2005e	34
Figure 4: Share of total grocery market space by type of retailer 1995 and 2005e	35
Figure 5: Expenditure growth: total grocery market vs core food and grocery vs total retail at current prices 1995-2005e	50
Figure 6: Sales per sq ft comparisons 2005/06e	57
Figure 7: Operating profit per sq ft comparisons 2004/05	58
Figure 8: Key issues in the grocery market 2006	67
Figure 9: Tesco vs the rest - market share 2000-2005	67
Figure 10: Tesco vs the rest - sales growth 2000-2005	68
Figure 11: Percentage of total retail expenditure accounted for by the four largest grocery retailers 2000-2005	69
Figure 12: The Morrison-Safeway dynamic 2004-2006	70
Figure 13: The importance of health issues among consumers 2006	71
Figure 14: Strategies to counter the increasing pressure on profit margins 2006	72
Figure 15: Consumer savings made by consumers due to deflation in the grocery market 2004-2006	73
Figure 16: Alternative growth strategies 2006	74
Figure 17: Strategies for customer relationship building 2006	76
Figure 18: Opportunities in non-food and services for the Top Four UK grocers 2006	77
Figure 19: Asda grocery market share 1999-2005e	81
Figure 20: Co-operative Group grocery market share 1999-2005e	95
Figure 21: Iceland grocery market share 1999-2005e	107
Figure 22: Marks & Spencer UK grocery market share 1999-2005e	119
Figure 23: Wm Morrison and Safeway grocery market share 1999-2005e	132
Figure 24: Sainsbury grocery market share 1999-2005e	147
Figure 25: Somerfield Group grocery market share 1999-2005e	162
Figure 26: Tesco UK grocery market share 1999-2005e	178
Figure 27: Waitrose grocery market share 1999-2005e	195
Figure 28: Waitrose like-for-like sales growth 2001/02-2005/06e	196
Figure 29: Aldi, Lidl and Netto market shares 1999-2005e	209

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