The trading performance of some supermarket retailers has been a roller coaster ride. Almost everyday we read stories about how some are doing well whilst others struggle and are looking to reduce stores or make head office savings. For every success story Lidl / Aldi / Waitrose there is a story of Woe i.e. the main 4 supermarkets. In this article we will look at marketing in the food sector.
A food retailer nutcracker analogy
If you think of a nutcracker with a walnut in the middle.
- On one handle is Aldi and Lidl (the cut price / budget retailers)
- On the other handle is Waitrose and M&S.
- In the middle is everybody else and they are having there nuts crushed.
Food Factors in 2016
- In 1963 food and drink as a proportion of income was 25%. In 2015 this reduced to 8% . So from £2.50 out of every £10 being spent on food this has reduced to less than a £1
- Historically the big 4 supermarkets have relied on in store promotional items making over 40% of their sales. Compare this to Aldi and Lidl who don’t rely on promotional offers or pricing to sell
- EDLP = Every Day Low Price – as the food retailers look to move away from Bogof and multi buys. For some everyday value has led to the brands becoming farm orientated (note these may not be real farms}
- M& S food on the motorways is a franchise operation . Note Shopping for tonight represents 40% of food sales for M&S
- Aldi and Lidl deliberately dont sell branded alcohol in store – this could be for a number of reasons. It could be that they are looking to develop there own in house brands to the younger audience who are visiting the store and fancy a perfectly good bottle of whiskey and dont care that its called GlenBollo$&