Two-thirds of us regularly or occasionally visit a supermarket more than once a day. It’s a trend especially evident among the young: 18- to 24-year-olds are twice as likely to regularly visit a supermarket twice a day than the over-55s.
Such startling facts, from Waitrose’s latest Food and Drink Report, represent a lens through which this week’s landmark food deals can be seen.
Tesco’s tie-up with wholesaler and retailer Booker, and the Co-op’s acquisition of buying and c-store group Nisa, position each more strongly in convenience – a rapidly growing sector epitomised by the frequent shopping habit highlighted by Waitrose.
“Nearly 60% of UK households used convenience shops and splashed out £3.2bn in them over a 12-week period. The Co-op is the most frequently visited – shoppers visit almost twice a week on average”
Market monitor Kantar observed this week that convenience stores of all types account for 12.1% of grocery sales.
Nearly 60% of UK households used convenience shops and splashed out £3.2bn in them over a 12-week period. The Co-op is the most frequently visited – shoppers visit almost twice a week on average.
C-stores fulfil missions very different from the traditional ‘weekly shop’. They’re likely to be ranged according to time of day needs such as breakfast or eating tonight, as time-pressed consumers’ horizons shorten from what they need over days to what they need now.
Tesco/Booker and Co-op/Nisa both position the enlarged businesses to better cater for a changing market.
A departure from the norm of more store openings or acquisitions of chains is how each is drafting in the power of indy shops to extend their reach – testament to the role independent retailers still play in many communities, and their frequently visited status.
The new distribution opportunities through the independent store networks brings the chance for the Co-op, for instance, to build the reach of its own-brand. In the case of the Co-op and Tesco, there will be benefits of scale in buying.
These deals are defensive as much as offensive, reflecting the intensity of competition in food and the challenges and costs of opening more company-owned stores in the right places.
Wholesale and supply deals open up new routes to market. More such deals may be on the table.
Food for thought
This week’s tie-ups reflect also the changing patterns of food consumption, as food-to-go specialists ranging from Greggs to Pret compete with traditional grocers for share of stomach.
These days, a commuter on the way home may weigh up whether to buy a chicken nasi goreng from M&S’ Simply Food or drop by the local Chinese takeaway for a sweet and sour pork.
Whether to pick up a bottle of white and a Tesco Finest wood-fired spicy Italian meat pizza, or order from Domino’s using Amazon’s Alexa.
Or they might even choose to dine at a Waitrose store, where the lines between shopping and eating out are being blurred.
“A few years back, Tesco’s purchases of eaterie Giraffe and café chain Harris + Hoole raised eyebrows. Maybe the timing was wrong, but could such tie-ups become a feature of the future food retail landscape?”
In its clearance of Tesco’s merger with Booker, the Competition and Markets Authority noted that Tesco and Booker “do not compete head to head in most of their activities”.
It said: “In particular, Tesco does not supply the catering sector to which Booker makes over 30% of its sales.”
You wonder though if the convergence of convenience retail, ready-to-eat specialists and restaurant dining might mean that in a few years’ time, competition in food may be viewed in a different light.
A few years back, Tesco’s purchases of eaterie Giraffe and café chain Harris + Hoole raised eyebrows. Maybe the timing was wrong, but could such tie-ups become a feature of the future food retail landscape?
Will a big retailer once again pounce on a restaurant group?
After all, former Waitrose boss Mark Price said when he left the business that he regretted not having bought Eat.