By Michael Barker
The age-old question of whether the chicken or the egg came first has a unique answer at the discounters right now – both are coming first. The irresistible rise of Aldi and Lidl is throwing up some fascinating dynamics in the grocery market, and nowhere is that more visible than in the poultry category, where the two stores are outfoxing the big four and posting some extraordinary figures.
With a combined 11.9 per cent share of the UK grocery market [Kantar Worldpanel, 12 w/e 18 June 2017] and both stores in 19 per cent growth, it’s no surprise to see the big four looking over their shoulders. Nevertheless, their performance in the fresh food categories is particularly remarkable, and is being credited as a major driver for the success of the two chains overall.
At the South West Chicken Association Conference in May, Kantar’s Sophie Barter revealed a startling acceleration of the discounters’ performance in the meat, fish and poultry category – in 2013, they had a nine per cent share of the market, but that had shot up to a stunning 17 per cent this year. The simple explanation would be to say it’s all about price at a time of austerity. But is there more to it than that, and is a more holistic approach to the category being taken by the discounters that is making them serious competitors across poultry and eggs?
In her presentation, Barter naturally highlighted the discounters’ value and quality proposition, with Aldi and Lidl both offering tempting weekly offers in their revolving Super 6 and Pick of the Week promotions respectively. For example in the week beginning 3 July, Aldi had a sweet chilli chicken crown for just £3.69, while Lidl was offering 600g of Chef Select buffalo chicken wings for £2.39. Savvy shoppers can therefore get their protein fix at an extremely affordable price if they’re willing to be flexible on their weekly basket.
The discounters themselves believe a straightforward, cost-friendly offer, backed by quality and provenance, is a winning ticket for consumers. David Cole, Aldi UK’s buying director for meat, tells Poultry Business that the overtrade is down to a couple of key factors: “Firstly, there’s a clear focus on British at Aldi,” he explains. “We are 100 British across our poultry range, and we are very focused on consistent quality. Discount retail has been known for price and value, but we have fantastic quality as well as a significant discount position. That’s generally as simple as it is.”
Aldi in particular has been at pains to underline its quality position in a notable marketing shift in the last two years, with last year’s campaign, backed by its sponsorship of Team GB’s Olympic team, having the dual effect of stressing Britishness and quality.
This new-found reputation has been earned through building trust and credibility over a number of years, according to Cole, but it’s also about the simplicity of the offer. He cites the example of chicken breast, where Aldi sells four lines compared to as many as 15 in other retailers. Similarly, it sells chickens in no-nonsense small, medium and large sizes. “We pick what sells and have a limited scale-back offer to give choice without duplicating the range,” Cole explains.
Suppliers are certainly on board. One supply chain source, who did not want to be named, said that despite price being fundamentally the key reason why consumers buy their poultry and eggs from the discounters, they will not compromise on quality and the work to emphasise the taste credentials of the products has been important. “As more and more shoppers have tried the discounters, they have been pleasantly surprised with the quality that is available at the price,” the source adds.
Consumers, of course, also shop with their eyes, and one might have imagined the simplicity of the presentation in the discounters would have held them back. However they are benefiting from a lack of imagination in British retail generally, according to food marketing expert Professor David Hughes, who travels the world providing insight into the retailing of meat and fresh produce. “In-store theatre isn’t a characteristic of UK supermarkets generally,” he says. “They are not leading edge in that area. You don’t have to be flash to be at least the equivalent or better than ordinary supermarkets. Thank the lord the way we present meat is changing, as it used to be always by species – beef, pork, lamb etc – though the chicken guys have been better at having more consumer-friendly names. It’ll be interesting to see whether the Aldis and Lidls move towards the kind of three-for-£10 offer you see in M&S, where all the proteins are in the same shelf. That’s the immediate future for meat retailing.”
Change is already at hand, and Lidl took a notable step with moves to revamp its meat chiller cabinets recently, which is the kind of initiative that has impressed onlookers. “The in-store shopping experience has historically been one of the biggest barriers to encouraging increased penetration and purchasing within the poultry category,” says the supply chain source. “Shoppers often quote the ‘wall of pink flesh’ as being dull, uninspiring and hard to shop, with many packs looking the same and NPD not having a chance to stand out.
“Increasing shopper engagement through a more visually appealing poultry aisle, clearly laid out and signposted by shopper needs/mission/usage and using visual cues to reference the end dish, rather than the raw input ingredient, all combined to drive emotional association with the category and ultimately make it more enjoyable to shop.”
Aldi is also getting in on the act, and Cole points out that the retailer’s trial store at Glascote, Tamworth features increased space for fresh products as part of a long-term commitment to British meat and produce.
The traditional big guns have responded to the discounters’ drive by getting in on the ‘fake farms’ act – Aldi and Lidl have specialised in faux brands for years – and despite some initial criticism are starting to see positive results. Tesco recently reported that its farm brands, introduced in 2016 with names like Willow Farms for chicken and Boswell Farms for beef, had caught the imagination of consumers, with 64 per cent of its shoppers buying from the range in the first three months of 2017. Similarly Asda said its new Farm Stores range had helped drive a 20 per cent uplift in own-label sales generally and had helped “reconnect” shoppers with the supermarket’s heritage. If imitation is the sincerest form of flattery, there’s no clearer indication that the big four are taking the discounters’ surge in fresh food seriously.
And don’t expect the success to taper off any time soon. According to John Giles, divisional director at Promar International, poultry will continue to benefit from the current popularity of protein combined with a reduction in red meat consumption. Regarded as good value, versatile and healthy, it very much fits with the zeitgeist. And price, quality and provenance makes for a pretty compelling proposition in anybody’s language.
How the leading stores stack up on price
6 x FREE-RANGE BRITISH MEDIUM EGGS
Tesco: 89p (14.8p/egg)
Sainsbury’s: £1.05 (17.5p/egg)
Asda: 89p (14.8p/egg)
Morrisons: 93p (15.5p/egg)
Waitrose: £1 (16.7p/egg)
Aldi: 79p (13.2p/egg)
OWN-BRAND WHOLE CHICKEN
Tesco: £2.79 (£1.99/kg)
Sainsbury’s: £2.80 (£2.07/kg)
Asda: £2.39 (£1.99/kg)
Morrisons: £3.58 (£2.31/kg)
Waitrose: £3.00 (£2.31/kg)
Aldi: £3.09 (£1.87/kg)
Lidl: £3.09 (£1.87/kg)
Timeline – How the big retailers are fighting back:
The seven brands comprised 76 new lines across fresh produce, meat and poultry that will either match the price of competitors or beat them. Where there is duplication, the products will replace those in its existing Everyday Value basics range.
Tesco hopes the colour-coded packaging using fictitious British-style farm names will attract shoppers. Woodside, Willow and Boswell Farms, for example, represent, respectively, fresh pork, chicken and beef, while Redmere Farms cover vegetables and Suntrail Farms imported fruit.
April 2017: Earlier this year, Asda relaunched its value Smart Price food range as Farm Stores, reigniting the row about retailers’ controversial use of “fake farm” brands to sell products.
Asda, which pledged to replace the Smart Price branded products completely by 2018, has recently reintroduced the Farm Stores label for both meat and fresh produce after dropping it in 2001.
UK farming organisations dismissed the latest marketing drive as misleading for consumers and insulting for farmers.
But an Asda spokeswoman said: “We know how important quality produce at a great price is to our customers. We’re reconnecting with our heritage by bringing back the Farm Stores brand to Asda – a name that our customers remember and trust for great value quality produce.”
May 2017: The Co-op aimed to differentiate itself from other retailers by becoming the first UK retailer to sell British-only meat – fresh, frozen, and processed – as it aims to boost its appeal against the discounters.
Co-op said the move was aimed at cutting back on import costs which it says have doubled to over £6 billion a year since 1996 for the entire UK.
Co-op which has 2,500 stores nationwide, already only sells British beef, chicken, ham, pork, sausages, duck and turkey, and only uses British meat in its own-label chilled ready meals, pies and sandwiches, but has now rolled out British meat in all its products.
January 2017: Sainsbury’s adopted a completely different strategy at the start of the year, by undertaking a project with Oxford University scientists to rearrange its supermarket aisles in an attempt to persuade shoppers to eat less meat.
The scientists said said that reducing meat consumption would improve people’s health and fight climate change.
The supermarket also plans to give out leaflets with meat-free recipes. The project was funded as part of Our Planet, Our Health, a £5m Wellcome Trust initiative.