Datamonitor’s “UK Food & Grocery Retailers 2011” is now available at ReportsnReports.com.

1. UK Food & Grocery Retailers 2011
ReportsnReports.com adds Datamonitor’s “UK Food & Grocery Retailers 2011” to its store.
Introduction
Expenditure in food & grocery is expected to grow 3.2% in 2011, driven mainly by inflation. As
consumers remain highly price sensitive and the market remains competitive, grocers have taken much
of the impact of this inflation – with promotions becoming embedded in the market. Volume sales
growth has slowed substantially, however grocers' expansion continues at the expense of sales densities
Features and benefits
 Provides data and insight on the market size, sales and growth rates for the UK food & grocery
sector, overall and at category level
 It presents thorough profiles of key players operating in the sector: including operating statistics and
market share analysis
 Analysis of the key issues impacting the sector – inflation, polarisation, space expansion, online,
promotions & integrating new technologies
Highlights
Inflationary pressures and the impact on volumes have not halted grocers expansion plans. In fact, they
plan to significantly increase space – opening almost twice the amount in the next five years as was
opened between 2005 and 2010. As a result we expect sales densities at constant prices (excluding
inflation) to decline from 2011 to 2015
Promotional activity is intensifying in the quest to win share, as a culture of promotions becomes
embedded in the market. Multibuys and price focused comparisons will push retailers to the limit of
price cutting potential, and become unsustainable. Gaining loyalty and creating more complex value
propositions will be necessary to differentiate
Online sales for food continue to grow along with increased competition. Limited delivery slots and
associated charges are the key concerns preventing usage of the online shopping channel – click &
collect may provide the solution to both of these issues. The focus on click & collect in non-food should
extend to food to address these concerns
Table Of Contents

2. EXECUTIVE SUMMARY
Key findings
Market growth mainly driven by inflation as volumes suffer;
Tough economic conditions result in market polarisation to value and premium ends;
Growing space not always the answer…
with scope for further market consolidation;
Sales densities at risk;
Tesco has most to lose from increased competition;
Building customer loyalty will continue to be a focus
Online and delivery process remains a focus;
Innovation in promotions vital to drive share;
New technology will play a greater role in customer engagement.
Main conclusions
(Untitled sub-section)
OUTLOOK
Space race continues as market conditions toughen
Inflation impacts volume growth
Impact on volumes
Consumer trends
Polarisation of demand
Food & grocery retailers increasingly stretched
Space race damages sales densities
Space expansion plans continue unabated despite difficult economic outlook
Large store expansion also continues
New space starts to impact on real sales densities
Grocers must manage expansion plans carefully
Online shopping provides respite from space race
Online growth continues ...
but simply transfers sales from stores
Shopper numbers online grow, as do expectations
Improving delivery process will benefit food & grocery retailers
Promotions
Culture of promotions embeds itself in retail environment
Multibuys becoming unsustainable
Multi-buys extend across categories as meal deals become ubiquitous
Price focused comparison is a win/win for shoppers
Shopper focused innovation in promotions will win share
Innovation in promotions will be vital
Integrating new technology to understand and engage with the consumer
Investment in new technology must be high on the agenda
Tesco leads in m-Commerce
Social media changes the way grocers engage with customers

3. Brand communities develop
New technologies set to change retailer interaction with customers
Summary – focus must be on retaining profits
Growing space not always the answer …
with scope for further market consolidation
Efficient business management vital
Building customer loyalty will continue to be a focus
MARKET ANALYSIS
Growth improves, though volumes suffer for grocers and food specialists
Grocers continue to grow share, while off-licences and specialists lose out
Small stores see the highest growth rate
Space growth driven by supermarket expansion …
though small stores increase productivity
Consolidation sees multiples take on larger proportion of store numbers
Food & grocery expenditure
Volume growth slows
Essential nature of food makes it the key driver
COMPANY DATA ANALYSIS
Market shares
Smaller players squeezed as winners continue to leverage operational efficiencies
Key operating statistics
Sales and operating profit
Space
Space allocation – grocers retreat from non-food to focus on core offer
Advertising
Grocers up spend as fight for market share escalates
ASDA
Increased focus on quality, while it looks to smaller stores for expansion opportunities
Recent key events
Conveying quality key to growth
Proposition
Financials
Sales growth slows down
Price positioning drives footfall and sales
Space
Netto stores will boost numbers significantly
Space allocation
Sales mix
Sector performance – food & grocery
Sales pick up but 2011 will remain tough
Market shares

4. Netto purchase gives boost
Outlook
Improving and not just expanding offer will prove challenging
THE CO-OPERATIVE GROUP
Settling down after Somerfield acquisition
Recent key events
Ethical trend sets agenda
Proposition
Financials
Sales growth levels as Somerfield integration continues
Growth settles to comfortable level
Space
Ambitious expansion plans ahead
Sales densities dip in 2011
Space allocation
Sector performance – food & grocery
Food and grocery sales settle as integration nears completion
Market shares
Steady after leap in 2009
Outlook
Future expansion must be tactical
ICELAND
Signs of slowdown in recovery
Recent key events
Despite questions over future ownership, Iceland expands
Proposition
Financials
Margins remain high as growth begins to slow
Slowdown in sales growth highlights trading pressures
Space
Steady growth with usual format
Space allocation
Sector performance – food & grocery
Food and grocery sales continue to grow
Market shares
Market share continues to grow at slow pace
Outlook
Increasing pressure will test Malcolm Walker's determination
MARKS & SPENCER
Evolution not revolution for premium grocer

5. Recent key events
Bolland pursues evolutionary change
Proposition
Financials
Healthy growth as promotions drive sales
Space
Steady rise in floorspace
Space allocation
Sector performance – food & grocery
Food & grocery sales rise 19.0% in five years to 2011
Market shares
Steady as Waitrose diversifies
Outlook
Gradualist long term approach but consumer climate to get harder
MORRISONS
Morrisons moves to catch up with rivals
Recent key events
Morrisons begins catch up in order to win share
Proposition
Financials
Trading performance defies recession
Fair growth in both sales and profit
Space
Sustains space growth despite recession
Space allocation
Sales mix
Sector performance – food & grocery
Further growth in sector sales
Market shares
Steady as Morrisons plans to expand
Outlook
Expansion required to increase market share
OCADO
Sales growth limited by capacity constraints
Recent key events
Extending range and capacity to reach new customers
Proposition
Carrefour link adds interest to range
Financials
Sales growth continues as profits start to emerge
Capacity constraints limit sales growth

6. Profits begin to emerge as sales make their mark
Sector performance – food & grocery
Gains basket size while others are losing
Market shares
Outlook
New distribution centre will alleviate pressure in capacity
SAINSBURY'S
Rebranding to offer customers affordable indulgence
Recent key events
Innovates in value while maintaining values
Proposition
Added value widens proposition
Financials
Expansion feeds sales
Steady increase in margins as sales continue to grow
Space
Ambitious expansion continues with new locations providing solid growth
Space allocation – fresh focus emerges
Sales mix
Sector performance – food & grocery
Quality and value builds food spend
Market shares
Space drives share growth
Outlook
Repositioning brand as expansion continues
TESCO
Looks to new ranges and Express store rollout for food & grocery sales growth
Recent key events
Tries to differentiate as competition intensifies
Proposition
Financials
New space drives sales growth
Non-stop sales and profit growth
Space
Sustains space growth despite recession
Space allocation
Sales mix
Sector performance – food & grocery
Growth picks up after slowing in 2009
Market shares
Convenience store rollout generates small rise in share

7. Outlook
Organic growth remains tough, but Tesco expands ranges and rolls out even more stores
WAITROSE
Flexes formats as reach extends
Recent key events
New stores and renewed online services spur growth
Proposition
Adapting to polarisation to premium and value ends of the market lets customers indulge or save
Financials
Building on sales growth through ongoing expansion
Building profits steadily as expansion restrains growth rates
Slight fall in operating margin as expansion pressurises profitability
Space
Convenience and new territory adds space
Space allocation
Sales mix
Sector performance – food & grocery
Growth gathers pace as offer hits the right note
Market shares
Balance of affordable indulgence wins share
Outlook
Ambitious plans will provide potential to build on growth
HARD DISCOUNTERS
Aldi
Aldi's profitability under threat as Big Four step up competitiveness
Trading record
Store portfolio
Market shares
Outlook
Lidl
Value credentials should prove popular as economic recovery falters
Trading record
Store portfolio
Market shares
Outlook
SMALLER GROCERY PLAYERS
Booths
Niche upmarket appeal provides continued growth
Recent key events
Financials

8. Stores
Outlook
Farmfoods
Impressive growth underlines appeal of frozen food
Financials
Stores
Outlook
SYMBOL GROUPS
Benefits from local shopping as independents seek refuge from grocers
(Untitled sub-section)
Costcutter
Rebranding imminent as tensions with Nisa Today's continue
Recent key events
Financials
Outlook
Tie-up with Nisa-Today’s mutually destructive
Musgrave
Growth slows as Waitrose & Morrisons threaten
Recent key events
Financials
Outlook
Premier (Booker)
Develops range to continue expansion
Recent key events
Financials
Outlook
Spar
Own brand development bolsters success of store refurbishments
Recent key events
Financials
Outlook
Smaller players
Best-one (Bestway)
Lifestyle (Landmark Group)
Nisa-Today’s
Mace (Palmer & Harvey McLane)
APPENDIX
Definitions
Methodology
Financial Statistics – VAT
Trading Profile

9. Physical Development
Computer Rounding
Further reading
Ask the analyst
Verdict consulting
Disclaimer
LIST OF TABLES
Table: Retailer charges for online grocery shopping 2011
Table: Grocers & food specialists definition 2011
Table: Sales via grocers & food specialists 2001–11e
Table: Channels of distribution 2006–11e
Table: Total grocery market size by retailer type 2001–11e
Table: Total grocery space by retailer type 2001–11e
Table: Annual sales densities by retailer type 2001–11e
Table: Total grocery store numbers by retailer type 2001–11e
Table: Total food & grocery market consumer expenditure 2001–11e
Table: Total food market consumer expenditure 2001–11e
Table: Non-durable household goods consumer spends 2001–11e
Table: Soft drinks market consumer expenditure 2001–11e
Table: Alcoholic drinks consumer expenditure 2001–11e
Table: Tobacco products consumer expenditure 2001–11e
Table: Shares of the total market held by food & grocery specialists 2006–11e
Table: Leading grocery retailers operating statistics 2010/11
Table: Leading grocery retailers store profiles 2010/11
Table: Grocery space allocation – retailers A–F 2011
Table: Grocery space allocation – retailers A–F (continued) 2011
Table: Grocery space allocation – retailers G–M 2011
Table: Grocery space allocation – retailers G–M (continued) 2011
Table: Grocery space allocation – retailers N–W 2011
Table: Grocery space allocation – retailers N–W (continued) 2011
Table: Advertising media expenditure 2005–10
Table: Retailers advertising spend across all media 2010
Table: Asda company overview 2011
Table: Asda retail proposition 2011
Table: Asda UK key operating statistics 2006–11e
Table: Asda store portfolio 2001–11e
Table: Converted Netto stores opened as at August 18, 2011
Table: Converted Netto stores scheduled openings (as at August 18) for 2011
Table: Asda space allocation 2011
Table: Asda space allocation ( continued ) 2011
Table: Asda estimated sales mix 2010
Table: The Co-operative Group company overview 2011

10. Table: The Co-operative Group retail proposition 2011
Table: The Co-operative Group UK key operating statistics 2006–11
Table: The Co-operative Group trading record trading record 2002–11
Table: The Co-operative Group store portfolio 2001–11
Table: The Co-operative Group space allocation 2011
Table: The Co-operative Group space allocation ( continued ) 2011
Table: Iceland company overview 2011
Table: Iceland retail proposition 2011
Table: Iceland UK key operating statistics 2006–11
Table: Iceland trading record trading record 2001–11
Table: Iceland store portfolio to March 2001–11
Table: Iceland space allocation 2011
Table: Iceland space allocation ( continued ) 2011
Table: Marks & Spencer company overview 2011
Table: Marks & Spencer retail proposition 2011
Table: Marks & Spencer UK key operating statistics to March 2006–11
Table: Marks & Spencer UK trading record 2001–11
Table: Marks & Spencer UK store portfolio 2001–11e
Table: Marks & Spencer UK store portfolio (food) 2001–11e
Table: Marks & Spencer store breakdown by type at March year end 2009/10 and 2010/11
Table: Marks & Spencer space allocation 2011
Table: Marks & Spencer space allocation (continued) 2011
Table: Morrisons company overview 2011
Table: Morrisons retail proposition 2011
Table: Morrisons UK key operating statistics 2006–11
Table: Morrisons trading record 2001–11
Table: Morrisons store portfolio to January 2001–11
Table: Morrisons space allocation 2011
Table: Morrisons space allocation ( continued ) 2011
Table: Morrisons estimated sales mix 2010/11
Table: Ocado company overview 2011
Table: Ocado retail proposition 2011
Table: Ocado UK key operating statistics 2006–11e
Table: Ocado trading record 2002–11e
Table: Sainsbury's company overview 2011
Table: Sainsbury's retail proposition 2011
Table: Sainsbury's UK key operating statistics 2006–11e
Table: Sainsbury's trading record trading record 2001–11
Table: Sainsbury's UK store portfolio 2001–11e
Table: Sainsbury's space allocation 2011
Table: Sainsbury's space allocation ( continued ) 2011
Table: Sainsbury's estimated sales mix 2010/11
Table: Tesco company overview 2011

11. Table: Tesco retail proposition 2011
Table: Tesco UK key operating statistics 2006–11
Table: Tesco UK trading record 2001–11
Table: Tesco UK store portfolio 2001–11
Table: Tesco space allocation 2011
Table: Tesco space allocation ( continued ) 2011
Table: Tesco estimated sales mix 2010/11
Table: Waitrose company overview 2011
Table: Waitrose retail proposition 2011
Table: Waitrose UK key operating statistics 2006–11
Table: Waitrose trading record trading record 2001–11
Table: Waitrose store portfolio 2001–11
Table: Waitrose space allocation 2011
Table: Waitrose space allocation ( continued ) 2011
Table: Waitrose estimated sales mix 2010/11
Table: Aldi UK key operating statistics to December 2006–11e
Table: Aldi UK sales record to December 2001e–11e
Table: Aldi UK store numbers to December 2001e–11e
Table: Aldi space allocation 2011
Table: Aldi space allocation ( continued ) 2011
Table: Lidl UK key operating statistics 2006e–11e
Table: Lidl UK sales record 2001e–11e
Table: Lidl UK store numbers 2001e–11e
Table: Lidl space allocation 2011
Table: Lidl space allocation ( continued ) 2011
Table: Booths overview 2011
Table: Booths planned store openings 2011–13
Table: Farmfoods overview 2011
Table: Costcutter overview 2011
Table: Musgrave overview 2011
Table: Booker (Premier) overview 2011
Table: SPAR overview 2011
Table: Grocers & food specialists definition 2011
LIST OF FIGURES
Figure: Key issues in food & grocery 2011
Figure: Food & grocery price inflation vs Volume growth 2009–13e
Figure: Food & grocery volume growth forecasts 2009–13
Figure: Polarisation in food & grocery 2011
Figure: Factors influencing choice of grocer 2011
Figure: Waitrose Love Life marketing campaign 2011
Figure: Real household disposable income 2009–15e
Figure: Sales growth of Aldi and Lidl vs Big Four average 2006–11e

12. Figure: Iceland – More for your Money marketing 2011
Figure: Grocers space – 2005, 2010 and 2015e
Figure: Morrisons convenience store concept 2011
Figure: Grocers superstores (25,000sq ft and above stores) space growth 2006–15e
Figure: Growth in space and decline in sales densities % 2010–15e
Figure: Online impact on food & grocery expenditure growth 2006–15e
Figure: Growth in online spend per head on food & grocery 2010–2015e
Figure: Factors that would make customers more likely to use home delivery 2011
Figure: Evolution of promotions 2011
Figure: Tesco twitter offers 2011
Figure: M&S Dine in for £10 deal – the original grocer meal promotion 2011
Figure: Sainsbury's Brand Price Match sample voucher 2011
Figure: Sainsbury's Feed your Family for £50 campaign 2011
Figure: Tesco fuel promotion 2011
Figure: Key issues in integrating new technology for the food & grocery sector 2011
Figure: Tesco mobile app 2011
Figure: Waitrose Christmas QR promotion 2010
Figure: Sainsbury's Facebook page with back to school marketing 2011
Figure: Asda's twitter account 2011
Figure: Total grocers & food specialists retail sales and year-on-year change 2001–11e
Figure: Channels of distribution – share of grocers & food specialists market by retail sales 2006–11e
Figure: Change % in total grocery market sales by retailer type 2011e on 2006
Figure: Change % in total grocery space by retailer type 2011e on 2006
Figure: Change % in annual sales densities by retailer type 2011e on 2006
Figure: Change % in total grocery store numbers by retailer type 2011e on 2006
Figure: Sources of growth in food &grocery expenditure 2001–11e
Figure: Change % in food & grocery expenditure by category 2006–11e
Figure: Shares of the total market held by food & grocery specialists 2011e
Figure: Retailers share of total market held by food & grocery retailers 2006 and 2011e
Figure: Retailers share of market in food & grocery products 2006 and 2011e
Figure: Change in operating profit % 2010/11 on 2009/10
Figure: Change in sales area % 2010/11e on 2009/10e
Figure: Average space allocation by category 2011 vs 2010
Figure: Asda fascia 2011
Figure: Converted Netto store South Harrow 2011
Figure: Asda UK sales and growth 2006–11e
Figure: New store interior of former Netto store 2011
Figure: Conversion of Netto stores 2011
Figure: Asda sales density to December 2006–11e
Figure: Asda food & grocery sales (incl VAT) in calendar years 2006–11e
Figure: Asda share of total market held by food & grocery retailers 2006–11e
Figure: Asda share of market in food & grocery products 2006–11e
Figure: Asda Clapham Junction store interior July 2011

13. Figure: The Co-operative Group fascia 2011
Figure: Join the revolution website 2011
Figure: New Truly Irresistible range 2011
Figure: The Co-operative Group UK sales and growth to January 2006–11
Figure: The Co-operative Group operating profit to January 2006–11
Figure: The Co-operative Group sales density to January 2006–11
Figure: The Co-operative Group food & grocery sales (incl VAT) in calendar years 2006–11e
Figure: The Co-operative Group share of total market held by food & grocery retailers 2006–11e
Figure: The Co-operative Group share of market in food & grocery products 2006–11e
Figure: Selection of The Co-operative's value range 2011
Figure: Iceland fascia 2011
Figure: Iceland revised advertising campaign 2011
Figure: Iceland UK sales and growth to March 2006–11
Figure: Iceland operating profit to March 2006–11
Figure: Iceland sales density to March 2006–11
Figure: Iceland food & grocery sales (incl VAT) in calendar years 2006–11e
Figure: Iceland share of total market held by food & grocery retailers 2006–11e
Figure: Iceland share of market in food & grocery products 2006–11e
Figure: Iceland free home delivery 2011
Figure: Marks & Spencer Simply Food fascia 2011
Figure: Marks & Spencer UK sales and growth to March 2006-2011
Figure: Marks & Spencer UK operating profit to March 2006–11
Figure: Y-o-y change % in M&S quarterly divisional sales in UK Q1 2010/11–2011/12
Figure: Marks & Spencer sales density (food) to March 2006–11e
Figure: Marks & Spencer food & grocery sales (incl VAT) in calendar years 2006–11
Figure: Marks & Spencer share of total market held by food & grocery retailers 2006–11e
Figure: Marks & Spencer share of market in food & grocery products 2006–11e
Figure: Marks & Spencer plan 2013–15
Figure: Innovative food items, M&S Marble Arch store 2011
Figure: Morrisons fascia 2011
Figure: Morrisons family butcher offers 2011
Figure: Morrisons pay-day price crunch promotion 2011
Figure: Morrisons UK sales and growth to January 2006–11
Figure: Morrisons operating profit to January 2006–11
Figure: Morrisons sales density to January 2006–11
Figure: Morrisons food & grocery sales (incl VAT) in calendar years 2006–11e
Figure: Morrisons share of total market held by food & grocery retailers 2006–11e
Figure: Morrisons share of market in food & grocery products 2006–11e
Figure: Concept of M local store design 2011
Figure: Ocado logo 2011
Figure: Reflets de France range 2011
Figure: Ocado UK sales (ex VAT) and y-o-y growth in years ending in November 2006–11e
Figure: Ocado operating profit to end November 2005–10

14. Figure: Ocado food & grocery sales (incl VAT) in calendar years 2006–11e
Figure: Ocado share of total market held by food & grocery retailers 2006–11e
Figure: Ocado share of market in food & grocery products 2006–11e
Figure: Sainsbury's fascia 2011
Figure: Sainsbury's Switch the Fish campaign with Jamie Oliver 2011
Figure: Feed your family for £50 meal planner 2011
Figure: Fresh Kitchen – Sainsbury's food-to-go concept 2011
Figure: Sainsbury's UK sales and growth to March 2006–11e
Figure: Sainsbury's operating profit to March 2006–11
Figure: Sainsbury's sales density to March 2006–11e
Figure: Sainsbury's food & grocery sales (incl VAT) in calendar years 2006-11e
Figure: Sainsbury's share of total market held by food & grocery retailers 2006–11e
Figure: Sainsbury's share of market in food & grocery products 2006–11e
Figure: Sainsbury's 2011 tagline 'Live well for less'
Figure: Sainsbury's UK coverage 2011
Figure: Tesco fascia 2011
Figure: Flash in the Pan concept 2011
Figure: Tesco UK retail sales (ex VAT) and growth to February 2006–11
Figure: Tesco UK operating profit to February 2006–11
Figure: Tesco sales density to February 2006–11e
Figure: Tesco food & grocery sales (incl VAT) in calendar years 2006-11
Figure: Tesco share of total market held by food & grocery retailers 2006–11e
Figure: Tesco share of market in food & grocery products 2006–11e
Figure: Waitrose brand 2011
Figure: little Waitrose fascia 2011
Figure: Waitrose Brand Price Match marketing 2011
Figure: Waitrose Brand Ambassadors & Heston's Christmas Pudding 2010
Figure: Waitrose UK sales (incl VAT) and growth 2006–11
Figure: Waitrose operating profit 2006–11
Figure: Waitrose sales density to January 2006–11
Figure: Waitrose food & grocery sales (incl VAT) in calendar years 2006-11
Figure: Waitrose share of total market held by food & grocery retailers 2006–11e
Figure: Waitrose share of market in food & grocery products 2006–11e
Figure: Marketing campaign backs expansion inside M25 2011
Figure: John Lewis filter on waitrose.com HomeDirect tab 2011
Figure: The Waitrose way – corporate social responsibility 2011
Figure: Aldi fascia 2011
Figure: Like brands only cheaper ad campaign 2011
Figure: Aldi share of total market held by food & grocery retailers 2006–11e
Figure: Aldi share of market in food & grocery products 2006–11e
Figure: Lidl fascia 2011
Figure: Selection of Lidl product reviews and awards 2011
Figure: Lidl share of total market held by food & grocery retailers 2006–11e

15. Figure: Lidl share of market in food & grocery products 2006–11e
Figure: Dedicated MediaCity UK website 2011
Figure: Booths partnership with Slow Food UK 2011
Figure: Farmfoods new store branding 2011
Figure: Farmfoods new location requirements 2011
Figure: Costcutter fascia 2011
Figure: Local Saver loyalty card 2011
Figure: Budgens & Londis fascias 2011
Figure: Budgens Price Crash meal solution 2011
Figure: Budgens fresh fish offer – sea to shelf in 36 hours 2011
Figure: Premier fascia 2011
Figure: Euroshopper 2011
Figure: SPAR fascia 2011
Figure: SPAR Our very own range 2011
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