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4 June 2008
Singapore
Singapore, June 4, 2008 – In the face of mounting day-to-day living costs in the wake of rising inflation, a growing number of consumers in Singapore are adjusting their food and grocery consumption, and turning to lower-priced alternatives, and according to Nielsen, it is the major grocery retailers who are benefiting – by raking in higher sales, specifically in the fresh/frozen food category, as well as their very own Private Label items.
“Findings from various Nielsen studies confirm that many cost-conscious consumers in Singapore are switching to cheaper alternatives of their regularly consumed household groceries,” commented Ms Ooi Pin Pin, Retailer Services Associate Director, The Nielsen Company, Singapore and Malaysia. “We are seeing significant signs that consumers are tightening their belts – via the corresponding, substantial growth in Private Label products.”
Nielsen’s Retail Index tracking reflected surges in overall growth of Private Label sales over three six-monthly periods. Compared to the previous six months timeframe ending April last year where registered growth was negative, the May to October period saw a huge jump of 8.7 percent growth in Private Label sales, and a further 14.3 percent hike in the following six months.
“In the past, growth of manufacturers’ brand typically superseded that of Private Label. However, our findings from the past 12 months have shown steep acceleration in the growth of Private Label, bucking this long-standing trend,” said Ms Ooi.
Besides switching to supermarkets and hypermarkets’ own brand of household products and groceries, Singaporean shoppers are also increasingly turning to the modern trade in search of cheaper fresh food items. Findings from Nielsen Homescan® show that wet markets, which have been a favourite source of fresh food among consumers, are losing their share of customers and wallets. Although still the most popular channel patronized by more than half (57%) of fresh food buyers, a significant proportion of wet market go-ers are now heading for supermarkets and hypermarkets, resulting in a drop of seven percent in shoppers’ spend at wet markets last year, and bringing corresponding increases in shoppers’ spending on fresh foods at supermarkets (4%) and hypermarkets (2%).
Further validation of this trend are results taken from the 2007 Nielsen ShopperTrends survey, where shoppers were asked where they purchased various types of fresh food items—specifically fruits, vegetables, seafood, and meat. While wet markets saw declines in shoppers’ purchases across all of these categories, it was the supermarkets that registered the biggest gains. In particular, fresh meat saw the biggest jump, with 15 percent more shoppers this year claiming to get theirs from the supermarket.
“With frozen meat costing notably less than fresh, coupled with the government’s recent promotional campaign encouraging Singaporeans to make the switch to frozen meat, and the fact that large retailers have upped their efforts in improving their offerings in this area—we are seeing quite a considerable level of conversion,” noted Ms Ooi.
Store Choice for Food and Grocery shopping
Nielsen ShopperTrends also surveyed shoppers on the factors that affect their decision on store choice for food and grocery shopping.
Convenience and Value for Money continue to take the top two ranks. When compared to last year’s survey, three factors—Easy to find what I need, Everything I need in the one shop, and Attractive and interesting promotions -- have increased in importance, taking the third to fifth placing from their previous seventh, tenth, and eighth positions in 2006.
“These latest developments exemplify the hectic lifestyle and increasing sophistication of today’s modern shoppers. Based on Nielsen ShopperTrends’ established Top 5 factors influencing grocery store choice, we can summarize that today’s shoppers want a convenient and accessible one-stop shop that is able to provide value-for-money shopping and attractive promotions,” commented Ms Ooi.
According to Nielsen Advertising Information Services, the local advertising share of spend in the supermarket/hypermarket category has been steadily increasing, with a steep jump of S$12 million from 2006 to 2007. Last year, all the major retailers invested a total of over S$43 million in advertising alone.
Chart 5:
Advertising spend by Singapore Retailers
Grand Total |
2005 |
2006 |
2007 |
32,819,399 |
31,033,399 |
43,556,621 |
About Nielsen ShopperTrends
ShopperTrends is an annual face-to-face survey designed to provide an in-depth understanding of consumer shopping patterns across different trade sectors, from hypermarkets and supermarkets to traditional wet markets and mom and pop shops. It provides information on where, when and how often people visit different outlet types, how they perceive the key retailers, and provides insights into key aspects of shopping behaviour. The latest survey, conducted in September to November 2007, polled shoppers in 55 markets from Europe, Asia Pacific, North America and the Middle East. 1300 interviews were conducted in Singapore.
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