A ‘Supermarket Scorecard’ to measure who’s winning and who’s losing in the Australian supermarket battleground

The Situation –

In March, 2015, UBS engaged Solutions Marketing to develop a supermarket scorecard. The objective was to monitor changes in grocery shopper profiles, shopping behavior and attitudes and to determine which brands improved and which brands declined over the last 12 months and which were likely to improve and those likely to decline over the next 12 months. Also to uncover the factors driving these changes, competitive implications and opportunities in the market place

How Solutions Marketing helped -

We conducted an online quantitative survey of n=1002 main grocery shoppers with quotas set in accordance with population in capital cities and regional Centres across Australia. The fieldwork was completed in the last 12 days of March, 2015 and identified the following:

• The customer profile of the Australian main grocery shopper and also by major brands (Woolworths, Coles, Aldi, IGA & Costco)
• The extent of main brand and cross-shopping amongst the top 5 supermarket brands
• Frequency of grocery shopping and changes vs. year ago and expected in the year ahead
• Spending on grocery shopping and changes vs. year ago and expected in the year ahead
• The attributes which are important to grocery customers and the strengths and weaknesses in delivering these attributes by the top 5 brands
• The relative performance on key store attributes vs. year ago, for the top 5 brands
• The overall relative performance vs. year ago, for the top 5 brands
• Which of the top 5 brands are likely to be considered as the main brand in the future

Strategic recommendations –

Overall we found that main grocery shoppers demand a high quality fresh offering and a strong value proposition. On the most important attribute ‘Quality of fresh food’ Aldi ranked first, followed by IGA & Coles with Woolworths last. On the value offer as measured by ‘Every-day low competitive prices’ and ‘Regular genuine price specials’ Aldi was clearly ranked first, followed by Coles then Woolworths and IGA. On customer support matters as measured by “Fast & efficient Checkout’, ‘Friendly staff’ and ‘Available, efficient & helpful staff’, Woolworths was clearly last, well behind Aldi, IGA and Coles. These are the key areas for Woolworths (and also Coles) to address in order to maintain their market leadership position.

Coles and Woolworths are the clear leaders, each attracting 80% of main grocery shoppers, but there is no loyalty. 2/3rds of Coles’ main shoppers also shop in Woolworths and 2/3rds of Woolworths’ main shoppers also shop in Coles. On attributes vs a year ago, all 4 key brands improved on all attributes except Woolworths which rated a little worse on ‘’Fast & efficient checkouts’.

It appears is that Woolworths has been damaged, more by their own neglect and not so much by Coles’ improvement. Coles is not so far ahead of Woolworths that Woolworths could not quickly catch up. But they will have to make quick, clearly visible improvements. Woolworths must be prepared to invest heavily in their fresh and their value offer and accept a significantly lower margin of profitability, particularly in the short term.

The result –

UBS have published these and other key findings in much more detail for their investors and also released the above key facts to the press.

Again, it is gratifying to know that UBS, one of the world’s most successful investment advisory companies can rely on our research findings to add important market and consumer insights to a number of their investment reports