Continued Supermarket & Hypermarket expansion leading to increasingly competitive Indian retail environment: Nielsen Shopper Trends India

The Indian Modern Trade scene is getting increasingly complex and competitive by the day, according to the latest Nielsen ShopperTrends India report released today. Nielsen found the number of customers frequenting Supermarkets and Hypermarkets has grown by 11 percent in India’s eight key metros compared to the last round of ShopperTrends conducted in November ‘07. Nielsen ShopperTrends also found that one-fifth of Indian shoppers are now spending most of their grocery rupees at Supermarkets/ Hypermarkets.

However, while the Indian shopper continues to embrace the Modern Trade Format, the rate of adoption has slowed in 2008 compared to 2007. Traditional grocery stores continue to dominate the Indian retail scene and are frequented more often by Indian shoppers. While 39 percent of grocery buyers visited a Supermarket/Hypermarket at least once in four weeks, 97 percent of them visited a Traditional store over the same period.

“The exponential growth in the Modern Trade Format’s customer base that we have observed in recent years now appears to be stabilising. Given this scenario, awareness and presence will continue to drive the equity a retail banner enjoys in shoppers’ minds,” said Asitava Sen, Director, Retail Consulting, The Nielsen Company, India.

Ever-elusive store loyalty

The expanding Modern Trade has given consumers more options to experiment, resulting in shoppers flirting across store banners. The repertoire of stores visited has increased amongst Supermarket/ Hypermarket shoppers, with over one fifth of them visiting four or more stores in a month.

Convenience a strong driver of store choice

Convenience is the key word for India’s modern day shopper, and the location of a store is a priority for them. The Nielsen ShopperTrends survey reveals that ease of accessing a store tops the list of attributes driving store choice among Supermarket/ Hypermarket shoppers. While more than half the shoppers are accustomed to visiting their regular store, almost an equal proportion of shoppers claim to have shopped at a store because of its sheer proximity.

A wide array of products is another factor driving store selection, addressing a basic need of ‘everything I need in one shop’. The Nielsen survey also found it important to avoid stock-out situations and carry an assortment of product categories and brands.

“Keeping regular customers happy by stocking categories and brands that are important to them is a key mantra to avoid banner switching. Food and grocery is a low involvement category, so convenient and easy access to product categories is particularly important to today’s grocery buyer,” continued Sen.

While both value for money and low price are rated as important drivers of store choice, ShopperTrends found that value for money had a slight edge over low prices.

The survey also found that shoppers do not explicitly state promotions as a factor that influences their store choice. However, when we consider their actual behaviour, then it is observed that attractive and interesting promotions play a vital role in store selection. Shoppers claiming to have checked the newspaper or flyers for coupons and then having gone to the store with attractive deals increased three-fold compared to last year.

What’s in the shopping basket?

While spending on total grocery has remained the same, the survey found the proportion spent on Fresh Food Meats or Vegetables to have declined. Shampoos, Detergents, Biscuits, Personal Toiletries, Hair Oils, and Cooking Medium were popular categories purchased in the Modern Trade, while the Traditional Trade remains the most preferred outlet type for all categories according to the Nielsen ShopperTrends report.

Shopper profile

The middle class consumer is increasingly shopping at Supermarket/Hypermarket, according to Nielsen ShopperTrends. The shopper base spreads across socio economic groups, with more than a quarter of customers today belonging to SEC C category. Supermarkets/Hypermarkets are also the preferred destination for younger males’ shopping needs.

“In future, the successful retailers will be those who use this shopper information to target their growth via advertising, merchandising and promotional activities, and offer a product range that offers the best demographic fit with the shoppers who visit their stores,’ continued Sen.

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About The Nielsen Company

The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com.

Nielsen ShopperTrends India is conducted in the top eight metros in India (Mumbai, Delhi, Chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad and Pune) and three 20lac+ cities - Nagpur, Jaipur, and Indore. The target respondents included both main grocery buyers and influencers; males/females aged 15-65 years in SEC ABC households in the above cities. A sample size of 3441 was used.

About Nielsen Retail Consulting Division

The Retail Consulting Division in India leverages Nielsen’s core and existing competencies in the Retail business and provides strategic advice and diagnostic tools to existing and new entrants in organized retail and allied sectors. For more information, please visit, www.in.nielsen.com