Food shopping goes premium

Verdict's survey of more than 10 000 Christmas shoppers has revealed that supermarket switching was higher over the Christmas period than at any other point in the year. In total, some 14.6% of supermarket shoppers abandoned their regular supermarket in favour of an alternative destination. Most of these were trading up to more premium offerings.

Source: Verdict Consulting; survey based on representative a sample of 10 074 consumers.

Commenting on the survey, Neil Saunders, consulting director of Verdict said: "When it comes to food, many consumers put financial and meteorological concerns to one side this Christmas. They wanted treats and good quality fare for their Christmas table and were prepared to pay for it and travel for it. In many ways, this is a continuation of a trend we have seen since the end of the recession: consumers are no longer prepared to be food frugal and while they're still careful with their cash, they put quality and taste ahead of pure price."

Waitrose, M&S main beneficiaries

As premium retailers, the two main beneficiaries of the trading up trend were Waitrose and M&S, both of which secured large numbers of additional customers over the festive period. Waitrose had 46% more main users (those who do most of their food spend at a given store) than usual, while M&S grew its main user share by 318%.

"As higher end operators, Waitrose and M&S should always do well at Christmas. However, they deserve credit for the amount of innovation and thought they put into this year's Christmas food offer. Unusual products like the Heston Christmas Pudding from Waitrose really captured the public's imagination and went down a storm," says Saunders.

As well as trading up, there was some trading down in the market as almost 5% of shoppers looked for cheaper alternatives. Tesco and Asda picked up customers here.

Looking forward to 2011, Verdict believes the premium trend will continue with most grocers looking to enhance the higher end of their offer, even as households become more constrained.

Consumer cutbacks this year

"Consumers will have to cut back in 2011, but it's unlikely we will see a return to the food frugality of the recession. That trend has been and gone and consumers are more likely to prioritise food spending above other forms of consumption" says Saunders. "The challenge for the mainstream grocers will be to show that they are offering great value as well as great quality. This is something Waitrose has done to great effect, but it's not a message that's easily emulated."

Source: Verdict Consulting; survey based on a representative sample of 10 074 consumers.