More retail choices mean savvy consumers are here to stay

Published on
May 24, 2016

The fierce competition between the leading retailers in the United Kingdom has completely changed the landscape for grocery sales, with consumers hooked on a diet of discounts. And yet, provisional data from the U.K. Seafish Authority suggests there’s much more to growing market share in the seafood sector than a competitive pricing strategy.

According to Seafish figures, retail sales of seafood for in-home consumption totaled GBP 3.1 billion (USD 4.5 billion, EUR 4 billion) last year, which represented a drop of 0.6 percent. In volume terms, these sales equated to 331,151 metric tons (MT) of products or 1.2 million unit sales, down 0.9 percent and 1.3 percent, respectively. But they also highlight that the supermarket price war, with like-for-like grocery prices falling every month since September 2014, still hasn’t permeated the chilled seafood category. Indeed, chilled seafood sales grew in value by 1.1 percent to almost GBP 2 billion (USD 2.9 billion, EUR 2.6 billion) in 2015, with consumers buying more of these products and paying more for them than they were a year ago.

By comparison, the value of the frozen seafood category fell by 1 percent to GBP 689.7 million (USD 1 billion, EUR 896.1 million) and ambient seafood sales declined by 7.1 percent to GBP 454.8 million (USD 662.5 million, EUR 590.9 million) last year.

Seafood sales through the main shopping channels also continued to shift last year. Tesco, the country’s biggest retailer, accounted for 22.5 percent of total seafood retail, but its market share declined by 4.9 percent. Sainsbury’s and Morrison – in second and third place, respectively – also saw their market shares fall to 15.8 percent and 11.1 percent, respectively.

While gains were made by some of the higher-end retailers, the discounters Aldi and Lidl made the most dramatic increases. Seafish’s data finds that Aldi, now the country’s sixth-largest supermarket chain, increased its share of total seafood sales by 22.2 percent, giving it a record 7.2 percent of the market. At the same time, Lidl increased its seafood sales by 35.6 percent to secure 5.5 percent of the market, making it the country’s fastest-growing seafood retailer.
While attractive pricing is very important, seafood retailers need to address the long-term decline in store loyalty, said Julia Brooks, market insight analyst at Seafish.

Store experience, ranges and choice now differentiate a retailer, and not the lowest price, she said.

“It’s about the right product, the right price and the right format in the right store for ‘individual’ consumers. At the same time, provenance, health and wellbeing have become much more important to shoppers and should be seen as a growth opportunity for the industry,” Brooks said.

The small decline in retail sales of seafood was offset by a 1 percent increase in out-of-home consumption, which exceeded GBP 3.2 billion (USD 4.7 billion, EUR 4.2 billion) last year. But while the number of seafood servings increased by 3.8 percent to 993.6 million, the average spend per serving declined 2.7 percent to GBP 3.25 (USD 4.73, EUR 4.22), echoing the overriding consumer trend of seeking value for money.

The biggest gains in this sector were in the quick service restaurants (excluding fish and chips), which increased its seafood servings by 10.8 percent, and in work and school cafeterias, which grew 10.2 percent on the previous year. The fish and chip trade, meanwhile, saw its seafood servings drop 0.6 percent in 2015.

With regard to these findings, Brooks said the increased variety in U.K. foodservice meant there was much less consumer loyalty. Furthermore, customers increasingly want “super-convenience;” they don’t want to waste time standing in queues for their meal.

Looking forward, operators must build “human customer relationships,” and give consumers new reasons to engage with brands in what is an economically recovering U.K. foodservice market that’s awash with considerable choice, she said.

Contributing Editor reporting from London, UK

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