Indian consumers have increased their shopping frequency at modern trade retail stores and are spending nearly 50% more than what they did earlier, according to a survey report. While modern trade has grown 90% across India’s eight key metros, market research firm AC Nielsen has found that in the past year (November ’06-November ’07) the number of customers who shopped at supermarket or hypermarket store in the span of four weeks has nearly doubled over the same period.
The local grocer may be losing out on their share of customers’ wallets. However, supermarket shoppers continue to visit the local grocer and, in fact, more often than they did a year ago. The findings of Nielsen Shoppers Trends India report indicates that shoppers generally use the modern format for their weekly and monthly shopping needs and use traditional stores for top-up shopping.
While the proximity of the local grocer gives it an advantage for top-up trips, retailers need to explore ways to encourage the supermarket/hypermarket channel for top-up/stand-alone trips to increase their bottom-line. Shoppers also exhibit differences in their spend allocation across product categories as well as their share of modern to traditional trade. They prefer to shop at modern retail stores for cooking mediums, detergents, shampoos, noodles and feminine hygiene products.
While the local vegetable market is still the destination of choice for fresh food, shoppers are increasingly visiting supermarkets for fresh fruits and vegetables, with a substantial six-time increase in shopping frequency for fresh food at supermarkets. Expansion of stores within and across cities is critical to maintain brand visibility.
Modern trade is still new to Indian shoppers and hence they are going through a process of trial and error. While salience and presence helps stores build stronger equity in the market, shoppers in their quest for experimentation are keen to explore new stores. Certainly, retailers who expanded within and across cities have managed to garner greater footfall.
Since modern retail formats are expanding to cater to consumers across demographics, it was time for retailers to broaden their offering to cater to the needs of both primary and secondary customers. Shopper Trends survey was conducted in top eight metros in India (Mumbai, Delhi, Chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad & Pune) and three 20 lakh plus cities like Nagpur, Jaipur and Indore.
The target respondents include both main grocery buyers and influencers- males/females aged 15-65 years in SEC ABC households in the above cities. A sample size of 3,316 was used.
There are many reasons for the above and primarily white goods take the lead say TVs, Washing Machines, Refrigerators etc. Take the case of TVs, the growth in premium consumer durables such as flat TVs, including flat panel displays, frost free refrigerators and split air-conditioners outnumbered conventional categories for the first time in 2006 and the year will be noted for this. The trend may continue with next generation technologies and innovations, trying to catch consumer attention.
In 2007 we expect high end product categories to continue leading the category in Color TVs and home appliances. It is expected the flat TV contribution to the total TV market to around 70% compared with the 60% contribution level seen in the year 2006. The flat panel (LCDs and plasma) market size of 1.5 lakh units.
Almost 40% of sales of the above products are now through Super/Hyper markets. With special discount and exchange schemes and with middle class income raising more and more people are visiting these markets and buying the product more frequently than 4 or 5 years ago. The trend seem to continue.