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PRIMEDIA INSTORE NEWSLETTER

2008 POP TRENDS

DEBUNKING RETAIL MYTH

POPAI SA'S RESEARCH FOCUS

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THE VOICE OF INSTORE
April 2008

	DEBUNKING RETAIL MYTHS

THE WEEKLY SPENDING OF METRO RETAIL STORES’ MAIN SHOPPER’S IS HIGHER THAN FOOD AND GROCERIES’ SPENDS BY SHOPPERS IN OTHER RETAIL STORES

R292 is what a shopper frequenting Metro stores spends weekly- the highest spending by far when compared to shoppers’ weekly spending in other retail outlets.

It is interesting to note how the "top-end stores" fare in relation to the Metro chain in terms of their weekly food and groceries spending.

This brings to mind a quote by Unitrade* Management Services (UMS) MD Jad Pereira (Wholesale Business 2007 Issue 1) who aptly said that "The lines between the wholesale and retail environment are becoming blurred. The customer profile of our members has shifted and some are seeing higher numbers of the general public shopper." (Wholesale Business 2007 Issue 1).

		AVERAGE WEEKLY SPENDING BY SHOPPERS IN RETAIL STORES
	2006/7 C	BASE: ANY URBAN MAIN SHOPPER (MS) IN SA (13M) SOURCE: TGI SA 2006/07

Average Weekly Spending

And how true this is when one notices the variation in the packaging of product offering on shelves in wholesale outlets. Whether you’re in the market for bulk-packs or individual-packs its all there on the shelves, accommodating the general shopper as well as the owner of “Betty’s tuckshop” in Pimville.

So, how far gone is the reduction in the ratio between the trader and the public customer?

Well, one only has to look at penetration of category usage in retail outlets to get an understanding of our main shoppers in SA. In the last 12 months we have seen the following:

75% of those frequenting Metro outlets have consumed the Instant Soup category (vs. 55% consumption for an average shopper in any of the retail outlets)
84% of those frequenting Metro outlets have consumed the Cold Breakfast Cereals category (vs. 75% consumption for an average shopper in any of the outlets)
93% of those frequenting Metro outlets have used the Stock Cubes category (vs. 77% consumption for an average shopper in any of the outlets)

		PENETRATION OF FOOD CATEGORY USAGE BY RETAIL OULTET
	2006/7 C	BASE: ANY URBAN MAIN SHOPPER (MS) IN SA (13M) SOURCE: TGI SA 2006/07

Food Category Penetration

Here are some surprising facts:

36% more shoppers are using the Instant Soup category and frequent the Metro stores.
12% more shoppers are using the Cold Breakfast Cereals category and these ones frequent the Metro stores.
20% more shoppers than the norm are using Stock Cubes category and these ones frequent the Metro chain of stores.

Metro shoppers are outperforming your average shopper in consumption patterns in these categories. If your brand is in any of these categories, you should be thinking of a bold instore communication to talk to these shoppers. Well, these shoppers are outperforming your average shopper in consumption patterns so if your brand is in any of these categories then we should be seeing your bold instore communication to talk to these shoppers.

Again, interestingly enough, Metro shoppers who consume the Instant Soup category are also known to spend on average R304 per week on their food and grocery shopping – even higher than the average shopper in this retail chain. R285 per week & R288 per week is spent per week on food and grocery shopping by those consuming the Cold Breakfast Cereals and Stock Cubes categories respectively.

Food categories aside- what about household categories? How are they performing in this outlet?

Well, again – of our main shoppers in SA, TGI indicated consumption of household categories as follows:

12% more shoppers who frequent Metro stores are using the Washing Up Liquids for Washing Dishes by Hand category (98% vs. 87% consumption for an average shopper in any of the outlets). Shoppers spend R291 per week on their food and groceries spending.
90% have used Household Cleaners (vs. 83% consumption for an average shopper in any of the outlets).These spend R292 on food and grocery shopping per week, whilst the average shopper spend R267 per week.
17% more shoppers who frequent Metro stores are using the Floor Polish category (81% vs. 69% of your average shoppers).R304 is spent on food and grocery shopping per week.
77% have used the Lavatory Category Cleaner category (vs. 65% consumption for an average shopper in any of the outlets). These shoppers spend R302 on average per week when instore.

		AVERAGE FOOD AND GROCERY WEEKLY SPENDING BY RETAIL OULTET
	2006/7 C	BASE: ANY URBAN MAIN SHOPPER (MS) IN SA (13M) SOURCE: TGI SA 2006/07

Hh Weekly Spend

The need to understand category consumption by retail chains has become a necessity, even more so when you are “Manuel-ly” challenged – as is the case with some of us who handle marketing budgets with objectives so big and yet budgets so small!!!

Even more challenging of course is South Africa’s economic status quo: with gloomy times for retail spending being noted in the first 3 months of the year, the term “getting the best returns for your buck” has warranted a lot more soul-searching (read “digging deeper into your pockets”).

With a limited budget it makes sense to be bold and visible where your category’s consumption and the potential for your brand to outperform the competitor are greatest.

In fact, 80% of them in fact stated categorically that “yes they do look out for sales promotions instore.” (TGISA 2006/7 C)

So, if you truly want to talk to shoppers who use your category and you want to talk to Metro shoppers - talk to us.

*Unitrade was previously fully owned by Metcash Trading Africa- under new deal structure Metcash is managing UMS’s operation for the next 30 months (Wholesale Business 2007 Issue 1)