ALDI has shaken up the market. It’s taken the German retailer 15 years to carve out an 8 per market-share1 but that’s set to grow rapidly in 2016 as ALDI spends $700 million expanding into West and South Australia.
Market leaders Woolworths and Coles are lowering prices and expanding their private-label ranges to stave off competition from ALDI.
Woolworths are currently implementing a cost-cutting plan to free up $500 million to invest into lowering prices and improving customer service. The retail giant has also charged M&C Saatchi to refresh the Woolworths brand, switching ad agency for the third time in five years.
Metcash owned IGA recently launched “Project Diamond” – a program of store refurbishments, lower prices for shoppers, and a restructure of private label brands so they can keep pace with competitors.
With intense change and high investment, 2016 will see competition for grocery buyers reach fever pitch.
The satisfaction challenge
The key to market share is a happy customer base and when it comes to satisfying shoppers ALDI is outperforming competitors.
ALDI has an approval rating of 89 per cent, ahead of IGA (79%), Coles (73%) and Woolworths (71%).
There are 2 million grocery buyers currently dissatisfied with their main supermarket. Woolworths face the greatest satisfaction challenge, with some 819,000 unhappy customers across the country.
Reach for the stores
Marketing managers at the major supermarkets will be working hard to ensure their grocery campaigns reach these shoppers as they vie to win market share and validate big money investment.
Daily newspapers are proven to get promotions in front of grocery buyers, the first step in winning the battle for the floating customer.
Newspaper media reaches 8 million grocery buyers, or 92 per cent of shoppers2.
Some 5.8 million Woolworths customers and 5.2 million Coles shoppers read newspaper media in the past month. Nine in ten ALDI and IGA shoppers read a print or digital newspaper in the same period.
With this level of reach, the major supermarket brands can be assured newspaper campaigns will be seen by customers.
Newspaper ads influence shoppers
Grocery buyer readers say newspapers and catalogues are one of the most important sources of information they turn to when planning food and beverage purchases, second to catalogues and direct mail.
Media most useful when buying groceries and beverages (grocery buyers)
|Catalogues & unaddressed mail||27%|
By advertising in newspaper media, supermarkets can influence shoppers, encouraging current shoppers to stay loyal or attracting shoppers from competitors.
Newspaper readers, valuable customers
In terms of spending, the newspaper audience is a particularly attractive shopper-segment for supermarkets, particularly print readers.
They spend an average $15 more per household member than non-readers every time they shop. For a family of four, that’s a difference of $3,120 per year between print readers and non-readers.
Supermarkets that can attract print-reading grocery buyers can count on a rise in sales.
1, 2. emma, November 2015 Database