Mid-Year Symbol Review: Symbols remain steadfast amongst savvy shoppers
The symbol store sector here is unique, with a precious place on the fabric of every community, both urban and rural, which has evolved over the past 50 years to the extent that a town, village or city without its symbol is simply unimaginable in 2023.
Consumers like names they can trust and symbol groups are the perfect combination of local faces with trusted brands, thus encouraging return trade and a relationship between shopper and store.
The latest data from Kantar Worldpanel to 14th May 2023, shows the Northern Irish grocery market saw sales grow by 8.5% in the year to 11th June 2023, with shoppers spending an additional £308.4 year-on-year.
With grocery inflation at 16.1% for June, the average grocery bill is set to rise by £840, from £5221 to £6061 if consumers don’t make changes to what they are buying.
But shoppers are savvy, and are continuing to look for ways to manage household bills and as part of this, they are returning to store more often, picking up less each time.
What they are choosing to buy is also changing, as own-label items now account for a bigger share of the sector year-on-year. Indeed some €2.9 billion was spent on own-label groceries in NI in 2022 (estimated), with Mintel noting that 71% of Northern Irish consumers avoided buying premium products due to the cost-of-living crisis in 2022.
“Irish shoppers have felt the impact of increased grocery prices in 2022, and have shifted their shopping behaviour accordingly, with a greater level of consumers reporting that they are avoiding premium brands and many using more own-label brands and discounter retailers,” said Brian O’Connor, Senior Consumer Analyst at Mintel.
Convenience is key and is fast becoming the cornerstone of everyday life. Gone are the corner shops of yesteryear. It’s all about the customer experience – and symbol stores have taken that concept to heart – by making the efficiency and ease of shopping at the core.
The symbol sector has actively capitalised on making the ‘shopper experience’ at the centre of their business ethos – smart, stylish, well lit, clean, clear labelling – with value for money being the driving force – this savvy sense of driving the sector forward has its roots in research, category management, and sound business sense.
THE SHIFT TO SYMBOLS
Retail analysts are identifying a clear shift in consumer behaviour and attitudes that is favouring the convenience sector.
On average, shoppers are returning to store nearly 17 times more, but are picking up less volume -2packs when compared to this time last year.
These new attitudes towards grocery shopping are supporting growth in the convenience sector, meaning retailers should adapt to drive change and keep pace with these new shopper behaviours.
These trends are presenting the symbol sector with a new raft of opportunities. Along with technology developments, it’s a clear response to customer needs and demands. It’s being predicted that these trends are likely to continue to evolve rapidly over the next five to 10 years.
Travel and movement patterns have altered in recent years, with more people working from home, resulting in people travelling on the road at different times of day. These pattern shifts are also changing the way consumers view and use convenience stores – but most importantly, consumers want the assurances and certainty that a recognised symbol secures – that meets their expectations.
THE ’CONSUMER EXPERIENCE’
At the cutting edge of change, the symbol sector is creating great shopping experiences for consumers, alongside the essential services and facilities they are known for.
The Henderson Group, which boasts some 500 stores across Northern Ireland – a mix of company-owned and independent retailers – has committed to significant investments throughout 2023, with a capital programme of over £60 million to be invested.
“We are a successful, independent, family-run, family-owned business and we have an ethos and culture of continual reinvestment to drive the business,” said Paddy Doody, Sales and Marketing Director.
“That’s about partnering with our independent retailers, investing in their business, investing in new stores, investing in promotional and price activity to give better value to the shopper, and investing in our infrastructure.”
‘Shoppers in Northern Ireland spent an additional £6.7 million in symbols versus last year, with 76.7% of Northern Ireland households purchasing their groceries in a symbol group over 2023’
As food and drink prices continue to climb, with average prices up 10.1% compared to last year, the impact on shoppers’ budgets is unavoidable for many Northern Irish consumers.
As shoppers look for ways to manage costs, many are turning to cheaper alternatives such as retailer own-label lines, where sales are up £193 million compared to last year and versus branded products, which are up £119m year-on-year.
All retailers are seeing year-on-year growth in the latest 52 weeks. Total symbols are seeing the slowest growth among retailers, at 2.4% year-on-year.
Shoppers in Northern Ireland spent an additional £6.7 million in symbols versus last year, with 76.7% of Northern Ireland households purchasing their groceries in a symbol group over 2023.
On average shoppers pick up groceries in a symbol group 65.3 times over the course of the year, which is down only slightly, at 0.1% on last year.
LOOKING TO THE FUTURE
Retailers will need to continue to make efforts to be more sustainable, as 78% of Northern Irish consumers noted they consider their lifestyle to be environmentally friendly to at least some degree, notes Mintel.
Some 71% of Northern Irish consumers believe that unless there are changes from big businesses, the planet cannot be saved. As such, grocery retailers that can successfully display green/ethical initiatives to support sustainability, will likely appeal more to shoppers.
With more consumers struggling to justify ‘splashing out’, adding a sustainable angle to grocery shopping may help to alleviate any ‘buyers’ guilt that consumers might feel in splashing out in a time where they may feel they need to deny themselves luxuries.
Having set out to achieve a 12% carbon reduction by the end of 2023, SuperValu and Centra retailers have achieved a 9% carbon reduction, a year on from the launch of the €25m Musgrave Sustainability Fund.
In June last year, Musgrave announced the first of its kind €25 million sustainability fund aimed at realising this target and reducing emissions across its operations, ultimately to achieve net zero by 2040. In order to reduce emissions to net zero by 2040, Musgrave is aiming to achieve a 46% reduction in carbon emissions (Scope 1 and 2) by 2030.
Ian Allen, Managing Director of SuperValu and Centra said: “Our stores are at the heart of communities around Ireland, and we are proud that our network of SuperValu and Centra retailers are on track to reach our carbon reduction goal by the end of this year.
“Our retailers have shown real passion and enthusiasm to continue to lead by example and implement sustainability measures across their leading supermarket and convenience stores.”
Retailer Philip Woods, who operates four SuperValu and Centra stores in the Armagh and Portadown areas, has invested £660,000 to reduce his store’s carbon emissions and make them more sustainable, supporting brand owner Musgrave Northern Ireland’s sustainability goals.
Investing in new energy efficient refrigeration, LED lighting, and solar panels, the retailer has also been supported by Musgrave NI’s £3.6 million Sustainability Fund.
Mr Woods is the first retailer in Musgrave NI’s network to use the Sustainability Fund for solar panels, which have been installed by local company Solmatix into SuperValu Fruitfield, Richhill and Tandragee, plus Centra Dobbin Road.
The solar panels will reduce carbon emissions by saving a predicted 49 tonnes of CO2 across the four sites each year helping to achieve Musgrave NI’s overall target of net zero carbon by 2040. This is the equivalent to planting 1,856 trees.
TO VIEW THE FULL MID-YEAR SYMBOL REVIEW IN THE NEIGHBOURHOOD RETAILER JULY ISSUE, CLICK HERE