Consumer Attitudes towards Supermarket - Assignment Example

CONSUMER ATTITUDES TOWARDS SUPERMARLET. ABSTRACT A supermarket can be defined as any self serving store which offers quite a variety of merchandize which may range from household perishables, electronics, pharmacy, pet products among others. Supermarkets are larger than the traditional grocery store but nevertheless smaller than a hypermarket. This paper tries to explore how multiple stores have been long standing part of the United Kingdoms retail landscape and consumers have constantly been properly making use of them for more than a century (Jane et al, 2008) with the ownerships of the supermarkets mattering less and only their service offering which plays a role in determining whether consumers are satisfied or not. Consumers shopping habit is not only determined by the variety of goods on offer but by social and cultural factors which may include class gender and ethnicity. This requires a range of goods and services that directly reflects the social and cultural background of the consumers in order to ensure that their needs are fully satisfied. This calls for policy makers to look beyond ownership and size and concentrate on effective retail management that can foster social interaction for the shoppers in a diversity of retail spaces. INTRODUCTION According to ethical consumer (2009) the modern supermarket stocks up to 40,000 different products, with world class supply chains that reaches every corner of the earth. Some years back, supermarkets only concentrated on stocking organic or eco friendly products but today their stocking choices and decisions are based on a previous client’s response which is not a very easy decision for them to defend. This calls for the supermarkets to apply ethical standards across their entire supply chain. However, contrary to that, when a survey of workers conducted at an Aldi supplier in Indonesia which supplies to some of the U.Ks supermarket, shocking statistics were revealed. 90% of the workers employed stated that their wages were insufficient to meet their daily statistics. 55% claimed they had no written contract 40% had reported trade union repression. With hawk eyed ethical consumers & media around, these stores suffered severe criticism that their market share dropped. With 32 million people shopping in U.K supermarkets on a weekly basis and over 7 sterling pounds out of 10 being spent there on groceries in U.K which finds its way into the supermarket tills. For instance Tesco one of the U.Ks most reputable supermarkets had to use courts to bully its critics which led it together with some other similar organizations to receive the “Consumers International Bad Company Award 2008” (Ethical Consumer, 2009). According to a report published by action aid in 2007 entitled “who pays” which dwelled into ways supermarkets operate in order to reduce their in store prices, abuse their purchasing power in order to squeeze on their suppliers who are later on forced to pass this down their supply chains which eventually trickles down to the factories and farm workers. Among the offenders mentioned were Tesco, Sainsbury, Marks & Spencer’s and Asda. This led to assumptions on consumers mind that cheap supermarkets aren’t the best. Factors affecting Shopping habits Prices With supermarkets competing over prices, they have been using different advertising strategies in comparing and undercutting one another. Now they are being accused by the consumers of hiking food prices more than the inflation rates. With strategic advertisements, supermarkets sneak up and heat where it hurts for other products whose value are unfamiliar to the consumer or may overcharge in comparison to the smaller independent retailers. For instance a red pepper at Sainsbury goes for an average 5.87 pounds a kilo which is extreme to the average 3.45 pounds at the small independent stores (Ethical Consumer, 2009). With supermarket prices changing frequently with as much as 40% per week, there is a tendency for consumers to be price sensitive. The price change may be large as well as small and there appears to be insignificant link between how much a price fluctuates and how long it has maintained the price since the last time it changed. With prices and the volumes of goods tending to move together , there is some evidence consumers are indeed price sensitive because volumes do change more than once when price also change (Collin Ellis, 2009) Strategies With increased business competition supermarkets have embarked on acquiring small grocery outlets in order to boost their profits from the sales of these smaller stores, this has made prices of groceries to be predetermined by the big players because they are the preferred shopping destination. Behavioral differences According to Rick et al (2006) In a study entitled “ Behavioral Differences between consumers attracted to shopping online versus traditional supermarkets: implications for enterprise design and marketing strategy” clients whom had been the traditional supermarket customers now prefer to use online electronic shops for their shopping rather than the traditional brick and mortar supermarkets. When such behavioral differences are found exist, they could easily guide supermarkets designs together with their entire marketing strategy. In comparison to the traditional supermarkets, online consumers have been found to be less price sensitive, they prefer large sizes to smaller ones, they do more product screening and have stronger choice set effects. Most of the differences are prevalent among most online consumers. 11 to 39% of traditional supermarket users behave more or less the same like the majority of online consumers while at the same time 0-31% of the online consumers were found to behave more or less the same like the traditional supermarket customers. In a separate study by Consumer Campaign Group (2010), consumers are now more satisfied with discount retailers than established major players. Over the last couple of years discount shops have become more popular and this is directly attributed to the financial situations that is pressing down most of the households which forces them to become innovative and seek different ways to save on their daily expenses. There is also a report that suggests that when it comes to customers affection, discount stores have managed to rate higher than traditional big name players and in a measure of customer satisfaction discount retailers at least managed to scoop 61% in terms of clients satisfaction in comparison to 58% scored by the big name players. The study looked at areas such as attitudes, prices and choice. Supermarkets are now being perceived as model for food retailing across Europe, they have already managed to pioneer innovation in supply chain management and one of their concentrated powers has been their capacity in “creaming” their quality range across their diverse products which are sourced from a wide geographical area (Ed Rhodes et al, 2006) In societies with wide income dispersions, the huge retail outlets are notorious in organizing and integrating their separate segments of customer demands. They have managed to lure both high income and low income consumers, which has enabled them to create their own niche market internally with distinctive Marques which are exorbitantly priced together with their own label discount ranges. This consequence of creating a diverse market of consumers is in order to enable them sell both their low and high priced merchandize to that particular niche market. This has resulted into an extensive range of goods to be displayed and the winners are the high net worth clients with the losers being the low income earners and smaller retailers as a consequence of large supermarket restructuring. There have also been assertions that supermarkets are quasi-monopoly within their respective catchment areas, and one of the counters to these claims is the new founded consumer choice offered by a diverse product range (Ed Rhodes et al, 2006) In a separate survey published by YOUGOV, 80% of the consumers surveyed held the belief that the way supermarkets have been treating their own suppliers was unacceptable, and they also backed call for an independent regulator to be established to check into supermarket activities with most shoppers’ preferring ombudsman to curb supermarkets suppliers’ exploitation by intimidating them. Professor Roger Clarke from Cardiff University also claimed that by failing to properly establish an ombudsman, the situation could lead to escalated food prices and further weakening of retailer/supplier relations, further he went on and argued that the same supermarkets abuse their market share in order to push the suppliers margins down which eventually causes food prices to increase drastically because most suppliers walk away from the business (Jack Davies, 2009). Table 1.0 depicting percentage of shoppers who consider changing supermarkets if they are guilty of mistreating suppliers. Consumers shop for a variety of goods but their preference is mostly on groceries. Their shopping habit usually includes a weekly main trip and one or more secondary quick trips. Store usage tended to vary within the year and could be affected by bad weather. Peak seasons are always characterized just before holiday periods and weekends (Robert et al, 2008). Environment This is simply the layout, location and space. There should be an environment that presents opportunities, stimuli and rewards. The store layout should make it easy and pleasant to use, this ensures that there is an atmosphere that modifies the buyer’s knowledge and enhances his mood thus affecting a shopping behavior (Robert et al, 2008). It was further on revealed that the color and background music in the store greatly influenced consumer’s attitude towards spending. Statistics Approximately 50% of towns in U.K have at least 5 supermarkets within ten minutes drive. There have been claims that the strong growth of supermarkets was destroying business in high street and an inquiry should be launched immediately, and there have been some industry statistics alleging that the “big four” supermarkets which includes Tesco, Asda, Morrison’s and Sainsbury’s control approximately 80% of the 80 Billion pounds grocery sector (Daily Mail, 2010). In 1945 there were over half a million retailers in the U.K but since that number has been on the downward trend and today the number being only 35,500 with nearly 2000 independent retailers going out of business every year (Daily Mail,2010). Consumer Attitudes toward supermarket shopping There was survey which was conducted among 50 consumers in relation to the customer’s attitudes towards supermarkets. There were a series of questionnaire given out to regular shoppers in which later the results were analyzed. The questionnaire was trying to address the questions, i. What are the brands strengths and weaknesses in comparison to the competition? ii. The likely recommendations to the brand manager? To begin with, the customers were presented with a form that consisted of three sections, part A which dealt with the consumer’s personal details, part B was the name of the supermarket together with its location and part C were the questionnaires. Personal details included name, Age, Sex, Education level, profession, employment type, marital status, number of children, and Annual income. After entering these fields in which the field name was not mandatory they were then introduced to a series of 15 questionnaires on the same document. The answers to the questionnaires were expressed on how important the factor is to the respondent in selecting a supermarket. The answers begun with: Not at all important, somewhat unimportant, Neutral, Somewhat Important and finally extremely important. Not all important has a score of 1 increasing systematically by “1” making “extremely important” to have a score of 5. A customer was not allowed to shade two eclipses on the same set of questions for instance he could not shade on “not at all important” eclipse and at the same time shade on “neutral” The questionnaires consisted of the following questions. Do you prefer to shop in a supermarket with the following attributes? 1. Fast checkout 2. Low priced advertised special 3. Close to where you live 4. Courteous with friendly employees 5. Makes it easy to cash cheques 6. Offers a variety of health and personal care products 7. Offers several brands to choose from in a category 8. Convenient parking 9. High & large selection of quality fruits and vegetables 10. Open 24 Hours 11. High quality of foods (Italian, Mexican e.t.c) 12. Wide selection of store private labels 13. Wide selection of national brands 14. Sells fresh sea foods 15. Provides nutritional information about products Answer Scores Not at all important 1 Somewhat unimportant 2 Neutral 3 Somewhat Important 4 Extremely Important 5 After the interview it was revealed that up to 80% of supermarket shoppers preferred supermarket shopping with low priced advertisements, whereas the 20% who did not mind much about the low priced details were people with good careers with good pay. People with good careers and good pay who comprised almost 15% of the entire respondents believed a supermarket should offer proper facilities to cash cheques, should have several brands to choose from, should be open 24 hours and should provide nutritional information about their product ranges. The remaining 75% did not bother much on these attributes but preferred supermarkets that were close to the home and offered a wide selection of national branding. Older shoppers above 50 years were cautious with friendly employees and they preferred products with their nutritional information clearly published on them, they also preferred supermarkets which were near to their homes, offered a variety of health and personal products and had high quality foods while younger shoppers less than 40 years did not pay too much information on nutritional information and the quality of food. A very huge percentage of the shoppers (94%) preferred supermarkets that had high selection of the stores private labels with a diverse selection of national brands with a very insignificant number paying attention to this particular attribute. When it came to store opening hours, respondents in busy careers who comprised of only 15% of the total respondents preferred stores that open 24 hours, 35 % were neutral on this issue while the remaining half perceived it as somewhat unimportant and not so important. To summarize, most consumers were extremely cautious with the discount available from different supermarkets before they made their shopping decisions, to be precise 85%, with the remaining 15% choosing either neutral or somewhat important, 35% of the respondents were so much concerned with the stores location and this comprised mostly of the older age group with the remaining trending in between somewhat important to somewhat unimportant. Majority of the shoppers did not pay so much attention to the food offered in the supermarkets and it is only 7% whom comprised of both the young and old in a blend of high income and low income earners paid special attention to food. Conclusion With cost of goods escalating on a daily basis, consumers may save a lot on their supermarket shopping provided that they apply the right strategy. With supermarkets being more like cathedral of consumerism by encouraging and seducing shoppers in to buying and spending more than they need, this means consumers must always learn how to counter moves that entice them into making that unpopular shopping decision because supermarket designs are aimed at making consumers spend more and working out on a budget can be a wider strategy in ensuring there is proper prioritizing in place. When it comes to brand most shoppers are always tempted to ask themselves if there is any difference between normal brands and own brands, but most often than not, they come from the same factories. Most consumers prefer to purchase established brand from reputable outlets regardless of the price, and this has really complicated matters to the high street stores. References 1. Jane Hamlet, Andrew Alexander, Adrian R. Bailey and Gareth Shaw (2008). Regulating UK supermarkets: An oral history perspective. Retrieved March 2010. From http://www.historyandpolicy.org/papers/policy-paper-70.html 2. Ethical consumer (2009) ethical buyers guide to supermarket shopping. Retrieved March 2010. From http://www.ethicalconsumer.org/FreeBuyersGuides/miscellaneous/supermarkets.aspx 3. Collin Ellis (2009) Do supermarket Prices Change from Week to Week. Retrieved March 2010. From http://www.bankofengland.co.uk/publications/workingpapers/wp378.pdf 4. Rick L. Andrews, Imran S. Currim  (2006) Behavioral differences between consumers attracted to shopping online versus traditional supermarkets: implications for enterprise design and marketing strategy. Retrieved March 2010. From http://www.inderscience.com/search/index.php?action=record&rec_id=3689&prevQuery=&ps=10&m=or 5. Money stop (2010) Consumers more satisfied with discount retailers than major supermarkets. Retrieved March 2010. From http://www.themoneystop.co.uk/022010/consumers-more-satisfied-with-discount-retailers-than-major-supermarkets.html 6. Jack Davies (2009) consumers say supermarket behavior is unacceptable. Retrieved March 2010. From http://www.farmersguardian.com/consumers-say-supermarket-behaviour-is-%91unacceptable%92/22837.article 7. Robert East, Malcolm Wright, Marc Vanhuele (2008) Consumer behavior: Applications in Marketing. Illustrated edition. Sage Publishers. 8. Ed Rhodes, James P. Warren, Ruth Carter (2006) Supply chains and total product systems: a reader Open University Systems. Illustrated Edition. Willey Blackwell 9. Daily Mail (2010) 50% of towns have five supermarkets on their doorsteps. Retrieved March 2010. From http://www.dailymail.co.uk/news/article-1256235/50-towns-supermarkets-doorsteps.html Read More