Battle for instant meal market hots up

Just a week after Pick n Pay launched its new range of food, Woolworths has started to fly in UK retailer Marks & Spencer products direct from Thailand, with stickers slapped on to the packaging claiming the food is specially packed for Woolworths.

This is an indication that Woolworths is moving quickly to defend its market share.

Nick Badminton, CE of Pick n Pay, said yesterday he had not seen the new snack range in his rival's stores but was not concerned about Woolworths' latest move. The snacks on offer include chicken breast chunks, duck spring rolls and vegetarian finger foods — all products that could have been obtained in SA rather than Thailand.

“I'm not that concerned about Woolworths, it's more about us getting it right,” Badminton said.

The battle between the retailers started more than a year ago when Pick n Pay, which was losing market share and whose share price performance was lacklustre, decided to turn its ship around.

From interviews with more than 4000 customers, Badminton said, the main messages were to get a better range together and improve quality. Having relaunched itself last week, Pick n Pay aims to have 460 new lines by the middle of next month.

“We do look at what Woolworths is doing. It's difficult to say what the Marks & Spencer products are about. We must just get our delivery right,” Badminton said.

Simon Sussman, CE of Woolworths, was not available for comment when the writer tried to make contact.

The retailer, however, said in a statement: “Woolworths is constantly assessing product ranges, sourcing and developing new ones. Woolworths stocks an array of products that meet customer needs, some of which are sourced from Marks & Spencer. Woolworths has sourced products from Marks & Spencer for a number of years.”

While Woolworths has always targeted SA's high-income earners, it has started opening stores in less affluent areas. Pick n Pay, which has been slow to open stores despite the burgeoning of new shopping centres, said this month it wanted to “defend and grow” its present customer base which falls into the top end of the income market, the Living Standards Measures (LSM) 8 to 10. Badminton said he wanted to take Pick n Pay to a more middle-to-lower-income market, in the LSM 4 to 7 range.

Shoppers who have gone to Pick n Pay in the past 10 days will not have found many of the new food products on the shelves.

Badminton admitted teething problems, including miscalculations on the packaging, having small suppliers trying to cope with new recipes and large volumes, and a new central distribution warehouse that was not yet functioning at full capacity.

He said 460 new lines had probably been too many at once.

Source: Business Day

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