Benefits of Grocery Market Consolidation
December 10 2003
The latest consumer research from the Institute of Grocery Distribution in the UK finds that consumers expect to see instant changes if Safeway is acquired and these will include lower prices, more special offers, better customer service and food quality, and the introduction of more own label foods.
The new report, Consumer Watch - Consolidation in Food Retail, investigated consumers' awareness of and reaction to consolidation and particularly the potential acquisition of Safeway.
IGD found that:
- Few consumers have kept track with the results from the Competition Commission enquiry and many actually think that Safeway has already been acquired by Morrisons.
- They are interested in the benefits an acquisition of Safeway can bring to them rather than who buys it.
- They want to be sure that competition and choice is maintained.
- Many want to see a retailer that currently has no presence in their area acquire their local Safeway store, believing that a range of shops provides different products and promotions and brings additional variety to the diet.
- No matter who acquires Safeway, consumers expect to see changes straight away. They expect much planning to have gone on behind the scenes, and once any take-over is complete they want to be able to reap the benefits almost immediately.
- More consumers expect to see a drop in price (36%) and the introduction of own brand foods (28%) before any name change or store refurbishment.
- Despite wanting some instant change, Safeway shoppers want to see certain elements of the Safeway offer retained: ie, Special offers and the standard of product quality to be maintained, Café Fresco which it is believed surpasses the general standards of in-store cafés and Shop and Go as consumers like the ability to track the total cost of shopping, not having to queue at the checkout and not having to load and unload the trolley.
IGD Chief Executive Joanne-Denney Finch commented: "Although much of the industry talk this year has been on who will buy what, we have found that this is not the case for consumers. They are more interested in what benefits they will gain from any take over. Overall most people expect to see positive changes including lower prices, more special offers, better customer service and better quality food. They clearly want more choice and are also expecting a greater range of own brand foods allowing them to obtain a more varied diet. This presents a clear challenge to suppliers and retailers to continue to provide increasing levels of innovation'.
All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.
