Who are the winners and losers in Irish retail wars?

In order to lure in the more promiscuous shoppers, large supermarket groups need to focus on the key things that matter to their customers

ONE of the most fascinating, competitive and never-ending battles in the Irish business world is being waged on a daily basis in the shopping aisles of the country’s supermarkets as they slug it out for the hearts, minds and wallets of Irish shoppers What goes on within these aisles can make or break suppliers and manufacturers, shift consumer purchasing habits and ultimately determine a retail brand’s fortunes in what is a cut-throat and often unforgiving market. Faint-hearted marketers need not apply. Complicating matters even more is the fact that the consumption and shopping habits of Irish consumers have changed considerably in recent years. Now they are a lot more promiscuous in their retail relationships — preferring to shop around, depending on their mood and their needs.

In the battle of the shopping aisles, the key emotional and functional needs of shoppers are being satisfied by drivers like proximity, value, customer experience and quality.

So who is actually winning in the battle of the retail brands?

According to research published last week by Ignite Research and Checkout magazine, Tesco would appear to be the top choice for shoppers doing their main weekly shop, with some 31pc of those surveyed indicating it was their preferred retail brand for the main shop.

The in-depth research, which is now in its third year and entitled ‘Where We Shop 2016’, also found that Aldi was the next key destination for shoppers, with 23pc saying that they did their main shop in one of the German discounter’s outlets.

They were followed by Lidl (17pc), Dunnes Stores (17pc) and finally SuperValu (11pc).

At first, the research findings might seem out of kilter with what we know from the Kantar Worldpanel figures — which put SuperValu’s share of the Irish grocery market at 22.6pc, compared to Tesco’s 22.0pc, Dunnes Stores’ 21.4pc and the 11.3pc and 11.0pc attributable to Lidl and Aldi respectively.

The Kantar figures, however, just measure what people spend with one retailer.

The Insight Research/Checkout figures, on the other hand, measure people’s intent and the main drivers that lead them to shop with a particular retail brand in the first place.

“We asked people where they do their main shop. This is an interesting measure of not how much they spend with each retailer, but where they feel most psychologically anchored and which relationship is the primary supermarket relationship from a shopper’s perspective,” says Mark Nolan, managing director of Insight Research.

Everyone, of course, has different reasons for choosing one main retailer over another, but as we know, shoppers have other favourites and it’s not uncommon for shoppers to visit two or three different retail brands in one week, depending on their needs.

In the case of Tesco, for example, 67pc of those who do their main shop there said that location was the main consideration, followed by the wide range of products (62pc) and its loyalty programme (53pc).

For those that chose SuperValu for their main shop, location (82pc), friendly staff (63pc) and wide range of products (59pc) were the top three considerations.

Not surprisingly both Lidl and Aldi (82pc and 80pc respectively) scored highly amongst the survey’s respondents when it came to value while their convenient location was cited the next most important factor.

In the case of Dunnes Stores, it was praised for its location (68pc), its wide range of products (64pc) and its loyalty programme (44pc). In addition, Dunnes Stores was also associated with being Irish by 80pc of the survey’s respondents — although SuperValu led the way in this metric, chalking up a score of 87pc of people noting their Irishness. So what does all this mean for retailers? “As society and shoppers continue to fragment further in terms of needs, in terms of how they shop and why they shop, it will become increasingly important for retailers not just to try and win as much spend as possible, but to be planned and considered around how they expect to win spend from those who are their main customers, and those who are their secondary shoppers,” says Nolan.

It also means that retailers need to be more sophisticated with their strategies while they need to define their core audience and provide a more targeted solution to their needs. The ‘one-size-fits-all’ approach is broken and is no longer relevant in the daily lives of shoppers, he says.

And like any good battle, retailers should pick their fights carefully — and avoid the temptation to fight it out within categories. Instead, the battle should be fought around the things that matter to their customers.

And of course, a healthy, competitive and relatively diverse retail market where the key stakeholders are falling over themselves to win business is also good for shoppers — even if they may never feel the urge to splash out on a wetsuit or a cordless angle grinder.