The purchase of analytics from the top 3 supermarkets in London
Writen by Ángela ·
Two thirds of the British frequent the supermarket more than once a day. And one in ten people often halt at a supermarket on their way home from work. In the United Kingdom, home to big four supermarkets such as Tesco, Sainsbury’s, Asda, and Morrisons, purchasing and eating behaviors go in tandem with the economic stability of the country. In 2015, the grocery retail market was valued at 178 billion British pounds. This value is only expected to rise annually till 2021.
Out of the four big supermarkets that contribute to the strength of the grocery retail scene in the United Kingdom, Tesco and Sainsbury’s held the largest market share together as of March 2017. The total share together accounted for 43.7%. Overall, the total value of the grocery retail market in the United Kingdom in 2017 is 192.6 billion British pounds. The revenue flowing out of this market, however, has shown an increase since 2012, the period when the revenue was 163.2 billion British pounds.
Grocery shopping patterns in the United Kingdom
The grocery shopping pattern in the UK occurs both online and offline, however, the percentage of inhabitants taking on the digital platform for their grocery shopping is on the increase off lately. It is stated that 48% of the British are online grocery shoppers. In reference to the different age categories, 19% of 25-34 young consumers are hitting the digital space to perform their grocery check outs. The rise of the online shoppers can be linked with the convenience offered to the consumers in terms of delivery and cost trackability and verification.
Grocery market share
As of 5th November 2017, the major supermarkets holding a place in the United Kingdom’s grocery retail scene are Tesco (28%), Sainsbury’s (16.2%), Asda (15.3%) and Morrisons (10.4%), followed by other retail groups such as Aldi, Waitrose, Co-op, Lidl, etc. The market share of these giant supermarkets are illustrated below:
Let’s analyse the top 3 UK supermarkets and decipher the relevant analytics.
Tesco was founded in the year 1919 by Jack Cohen. Today the United Kingdom is home to 397 Tesco shops and 218 Tesco Extras. Outside the United Kingdom, Tesco shows up with 7,000 stores worldwide. Tesco’s total revenue in 2017 is 74.01 billion British pounds. This, however, is a decrease from the previous year’s revenue at 82.44 billion British pounds.
Sainsbury’s is the second largest supermarket chain in the United Kingdom. Founded in 1869 by John James Sainsbury, this supermarket stands with a whooping presence of 1301 stores spread across the United Kingdom. As per the annual report released by Sainsbury in 2017, the underlying profit before tax amounts to 581 million British pounds.
This third largest British supermarket retailer was founded in 1949 by J.W. Hindell. Since its inception, its presence has been widespread in the United Kingdom with 523 stores. Overall the total number of stores as of October 2017 is 638. Being a subsidiary of Walmart, Asda’s revenue in 2016 fell by 19% to 791.1 million British pounds.
Demographic analysis behind the three supermarkets:
What is the underlying factor that drives the supermarket to pump out huge revenues and expand store networks? Is the location a critical component? Do demographics have a huge role to play? The answer is a straightforward yes. An executive responsible for validating the site for the supermarket takes into account the prime factors such as the population density, footfall, residential area, the proximity of transport stations and educational institutions. There is no backing for a business like that of a solid demographic check. Hence, let’s take a look at the demographic factors that revolves around the top 3 supermarkets discussed above.
The areas chosen for the analysis:
- Tesco – 19 Regents street, St. James, London SW1Y 4LR
- Sainsbury’s – 45 Berkeley Street, Mayfair, London W1J 8ES
- Asda – 464-504 Old Kent Road, London SE1 5AG
The demographic analysis is conducted upon the areas around the supermarkets within a 10-minute walking distance.
- To begin with the census population. The areas have a considerable amount of census population.
- The disposable income are quite appreciable around the selected areas of the supermarkets. In addition, in all the three areas, the percentages of singles occupy a majority. Precisely in the three areas, the percentages are 49.94%, 58.86%, and 51.90%.
- The disposable income however seconds our demographic analysis. A dive into this metric will eventually depict the target population’s spending and purchasing capabilities. That said the disposable income figures of the three areas can be deduced from the graph:
- A plentiful of today’s retailers place a heavy weight on two metrics to measure their future business performance in a location. While the first is the census population, the metric following is the footfall. Some companies have stated that analysing the foot traffic is not only an indisputable criteria but also a vitalizing indicator that impacts every euro spent on marketing and other business strategies. The three supermarkets in subject justify similar argument having a very high footfall traffic around their stores.
- Digging out the household composition empowers the executives to bolster the business strategy to a greater magnitude. Knowing the number of households and more importantly the number of inhabitants per household breaks open the door to a perfect location. The number of households thus populating the three areas around Asda, Tesco and Sainsbury’s are 2,050, 2,500 & 1,550. Additionally the single person households in the areas hold a greater percentage compared to the other household types, i.e., 32.01%, 57.58% and 57.44% respectively.
Thus, the above demographics are a few of a myriad of other demographics that go into choosing the right location for a supermarket. In reference to the British market, the grocery landscape is dominated by the two giants Tesco and Sainsbury’s. Although Asda and Morrisons become prominent for the third and the fourth positions, close competition from Lidl and Aldi comes as a warning signal for the former supermarkets. With a wider landscape of the online grocery market and click & collect services, and a positive increase in the supermarket sales over the past years, the grocery shopping sector is on a good stride for the United Kingdom.