Waitrose would gain most from converting shoppers at big four, TNS finds


Waitrose could gain as much as £7.1bn of new business by courting consumers trapped in unfulfilling relationships with their current food retailer, new research from global consultancy TNS has found.

The findings of The Commitment Economy, a global survey of over 39,000 people in 17 markets released today, show Waitrose could increase its share of UK shopping visits by as much as 4.9% (equivalent to £7.1bn) by addressing the needs of ‘shallow shoppers’ – consumers who would love to shop at a better quality retailer, but who are unable to because alternatives are too far away or too expensive. 

The modelling exercise, utilising the study’s UK data, found Waitrose and Marks & Spencer are in the strongest position to convert this type of shoppers, most of whom currently shop at the big four – Tesco, Sainsbury’s, Asda and Morrisons. The premium retailers emerged as the most desirable grocers among the consumers surveyed, regardless of where they shop themselves. 

Together, Waitrose and Marks & Spencer stand to gain over £14bn of new business from customers who would switch retailers if they could.

Judith Passingham, CEO, TNS Northern & Eastern Europe, said: “Waitrose and M&S are in the enviable position of being desired by millions of ‘shallow shoppers’ who would switch retailer if they could: the opportunity can be realised by making their products accessible to those people. And this doesn’t necessarily mean diluting the brand. Many people thought Waitrose’s innovative Essentials range would devalue the experience of shopping there, but it has resulted in a significant increase in market share.”

Waitrose has employed a range of strategies in recent years to expand its UK presence, such as its ’Price-Match’ campaign where point of sale is placed on hundreds of product lines to announce they are the same price as Tesco or Sainsbury’s. This has helped the grocer continue to grow ahead of the market, said TNS.

The findings prove even in tough economic times, quality and a fulfilling consumer experience are still a high priority for the UK’s shoppers. Speciality retailers such as bakers, butchers and fishmongers emerged as having the third biggest growth opportunity behind Waitrose and Marks & Spencer. These smaller players could gain up to £5.4bn collectively by offering fresh, local produce and a more intimate shopping experience, said researchers. 

Jan Hofmeyr, chief researcher, Behaviour Change at TNS, said: “Many of the biggest names in the retail sector enjoy unrivalled market share, but this does not secure their long-term growth if consumers have little or no commitment to the brand. They may continue to part with their money for reasons beyond their control, but the minute more attractive options are available they are likely to switch. This makes them an easy target for competitors looking to steal a march.”

“Ambivalence in the minds of consumers represents a significant risk to the market leaders in retail – so in the case of Tesco, a dual focus on hearts and minds will help it retain its dominant market share,” he said.

The research reveals Tesco’s key strengths of convenience and affordability have helped it to retain its leadership position – but that a need to connect with customers through a good experience is also key. This focus on winning hearts as well as minds can be seen in Tesco’s recent deployment of 20,000 new staff to ensure every shopper receives excellent customer service and fresh, quality produce.

TNS estimates that up to 9% of each of the big four retailers’ current share of UK shopping visits comes from people who would spend a significant portion of their grocery budget elsewhere if they had the option to do so. These share figures are worth as much as £13.1bn to Tesco, £5.5bn to Asda, £1.8bn to Sainsbury’s and £1.4bn to Morrisons.

Passingham said: “The great news for the big four grocers is the ‘shallow shoppers’ they need to reconnect with are still right within their aisles, so providing they listen to what people really want, there is an opportunity to change perceptions and win back hearts and minds. Tesco’s recent endeavours are a great example of a retailer realising it must act on feedback from customers to ensure it stays number one.”

TABLE:  Who has most to gain?

TNS has calculated which retailers have most to gain by courting ‘shallow shoppers’. Stores are ranked in terms of which have the greatest market share growth opportunity based on number of shopping visits. 

Ranking (Top 5) Monetary value attached to opportunity (in billions of GBP)
Waitrose £7.1bn
Marks & Spencer £7.0bn
Specialty shops (e.g. cheese shops, butcher, bakery, fishmonger) £5.4bn
Street markets £2.9bn
Iceland £0.9bn