Bond said yesterday that consumers have changed for the long term and that they will never go back to the way they were before the downturn. He believes traditional values will return and the post-war mentality of being cautious with money will prevail.
This mentality will stand Asda in good stead. For years Asda has been voted lowest priced grocer and its buoyant sales figures show that shoppers are trading down from more premium grocers. Asda claims it has attracted a million new shoppers this year so it’s clear that its value proposition is working.
Morrisons will be very much in the same camp as Asda. The grocer’s struggles with Safeway are well and truly over and it has recently reported industry-beating like for likes. Its focus on fresh and value products has given it a different edge to Asda and again, attracted more ABC1 customers. The value has drawn these shoppers in, the quality of its fresh fish and meat has been a pleasant surprise and they’ve kept shopping there.
For Tesco and Sainsbury’s the new era will be harder to cope with. Tesco has already launched its Discounter range to stem the leakage of customers to the hard discounters but it looks like it will now have to do more to show it offers real value.
And while Sainsbury’s has been performing well, managing to keep its shoppers in its stores with the relaunch of its Basics range, it too is seen as a premium grocer. It will need to carry on working hard, but initiatives such as a "feed your family for a fiver" have been inspired.
Waitrose and Marks & Spencer on the surface look like they will suffer the most. But if they are savvy, they can both adapt.
Waitrose has never been known for its ready meals so it doesn’t need to change anything there. Rather, it is a shop for would-be chefs and so is often the first port of call for those ingredients that you can’t find in other supermarkets.
Waitrose has also started introducing different cuts of meat into its stores – the trotters and cheeks that have long been abandoned. The grocer said this range of traditional, but cheaper cuts, have been a huge success. If Waitrose continues to think like this, and make sure it isn’t too expensive, then shoppers may well go there if only for a top up shop.
For M&S, it needs to find the answer to the next ready meal. It has already tried introducing an ingredients range for shoppers wanting to cook from scratch but it is still too expensive. M&S is a traditional brand and could do well in a frugal era if it gets its pricing right.
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