Today’s trading updates from Sainsbury’s and Tesco highlight that the market continues to be tough for the leading grocery players. However, we also see the retailers in the middle that seek universal appeal being squeezed from the likes of Waitrose at one end, and discounters and pound stores at the other. For example Poundland, which reported strong growth yesterday, has a very clear customer proposition and a different cost base which has enabled it to maximise current consumer conditions.
Sainsbury’s has reported slightly more encouraging results – with a lot of their growth coming from convenience – again reflecting the changing consumer and the way we are shopping, i.e. shopping for less stuff, more often, closer to where we live.
Whilst we are told that there is some room for optimism in the broader economic climate, we are seeing that the shoppers of Britain are not changing their behaviour. Instead they are digging deeper and making very considered decisions about when and where they will shop, and more importantly who with. We are now seeing significant cultural shopper change which is here for the long term and will mean that retailers will have to rethink their future strategies to win hearts, minds and most importantly pockets.