ShopperTrends Food & Grocery Shopping

Case Study Analyse the research findings for the 2006 Singapore Shopper Trends study, and recommend the course of action for each of the following retail chains: Sheng Siong Shop n Save FairPrice Your recommendations should be supported by the relevant research findings.

Research Methodology City Coverage: Singapore Target Respondent: Males/females grocery shoppers aged 15-65 years Interview methodology: Face-to-face interviews Sampling method: Random sampling with quotas for age, gender and race Sample size : 1,300 Fieldwork Period: 20th January to 3rd February 2006 Questionnaire length: 45 mins Weighting variables: Data weighted proportional to national ‘main grocery shopper’ statistics based on age / gender / location

Food & Grocery Shopping

Store Equity Index 0 10 3 No-one’s favorite No-one recommends The ACNielsen Brand Equity Index produces scores in range of 0 to 10; the higher the better. Zero on this scale represents the lowest Index, meaning that a brand has no loyal customers, and nobody would pay any more than the cheapest price on the market. Ten would be the highest Index, where everybody in the market is a loyal customer, and would willingly pay a significant price premium. In competitive markets a score of 3+ is very strong. 0 10 3 No-one’s favorite No-one recommends No price premium None willing to travel to store Everyone’s favorite Everyone recommends Price acceptable to all All willing to travel to store

Store equity of key chains Supermarket / Hypermarket Store Equity Indices - 2005 vs 2006 Base: All Supermarket / Hypermarket shoppers (n=905)

Demographic profile of Shoppers Numbers represent difference from profile of all respondents % All Respondents Sheng Siong Shop n Save Cold Storage FairPrice Carrefour Race Chinese Malay Others Occupation: PMEBs Other White Collar Student Blue Collar Housewives Not working Marital Status: Single Married/Others No of people in HH: 1 - 3 4 - 5 6 + Giant 69%14%17% 25% 19% 4% 23% 21% 7% 16% 84% 33%51% 17% Base: Those who visit store most often. FairPrice (n=563), Sheng Shiong (n=121), Shop n Save (n=98), Cold Storage (n=43), Giant (n=44)

Demographic profile of Shoppers Numbers represent difference from profile of all respondents Sheng Siong Shop n Save Cold Storage % All Respondents FairPrice Giant Carrefour Gender: Male Female Age: Age 24 or less 25-34 years old 35-39 years old 40-49 years old 50-65 years old Household Income Low (up to S$2K) Middle (S$2~6K) High (above S$6K) Not disclosed 44% 56% 8% 22% 13% 29% 28% 17% 57% 23% 3% Base: Those who visit store most often. FairPrice (n=563), Sheng Siong (n=121), Shop n Save (n=98), Cold Storage (n=43), Giant (n=44) 63% of shoppers at Cold Storage are High Income shoppers; i.e., 40% points above the respondent population proportion (23%)

The loyalty pyramid - FairPrice +1: The proportion of respondents who recommend the store has increased by 1% points versus prior year % of respondents who are … Recommenders Preferrers Dependables Regulars Considerers Trialists Aware ensuring loyalty Salience Relevance Behavioural Loyalty Emotional Loyalty +1 -1 ensuring performance -2 Use most often +1 P4W (Past 4 weeks) providing relevance In customers repertoire +1 achieving presence Unaided Aided

Food & Grocery Store Leverage Loyalty pyramid Food & Grocery Store Leverage FairPrice Sheng Siong Shop n Save Cold Storage Recommenders (%) Preferrers (%) Dependables (%) Regulars (%) Considerers (%) Trialists (%) Aware (%) Non considerers (%) Too Hard to Get to (%) +1 +4 +1 -1 +3 +1 -1 -2 +2 +2 -2 +1 +7 +8 +5 +12 +2 +6 +1 +6 +1 Unaided, Aided Unaided, Aided Unaided, Aided Unaided, Aided -12 -2 -6 -2 Base: All Supermarket shoppers (n=905)

Banner Image rating top 2 boxes (agree/strongly agree) rating for supermarket banners FairPrice Sheng Siong Shop n Save Cold Storage Giant Carrefour Convenient to get to 83.4 42.3 63.8 43.7 26.1 19.2 Close to home 83.8 42.5 64.1 43.8 26.4 16.8 Value for money 72.3 68.7 53.5 35.8 52.0 28.0 Attractive and Interesting promotion 77.3 69.1 60.8 36.7 55.5 21.2 Low prices for most items 70.7 76.9 19.4 55.8 10.4 Own brands as a good alternative 75.4 27.6 44.9 46.8 49.3 25.6 Always have what I want in stock 59.7 44.7 44.0 46.2 76.7 One stop shop 60.9 50.7 43.0 48.5 46.3 Well presented product display 58.4 34.3 56.4 45.2 80.8 Modern and comfortable store 59.5 29.8 39.1 60.7 46.6 76.0 Better selection of quality products 53.1 36.4 54.9 41.9 74.8 Wide product range and variety 56.5 45.6 40.2 52.4 58.9 Spacious 51.7 32.3 34.6 51.3 52.7 Easy to find what I need 62.3 46.5 50.4 52.5 48.9 Staff provide good service 64.5 39.6 44.1 59.2 40.5 58.8 Loyalty program 82.4 31.4 49.9 39.4 46.0 26.6 Ease of parking 54.1 36.2 48.0 54.7 Efficient checkout counter 51.8 43.5 Good range and fresh products 65.9 40.1 46.1 57.3 45.3 58.1 High quality fresh food 63.9 36.0 44.2 61.2 43.2 60.5 Clean and hygienic store 61.5 31.3 42.2 56.2 82.3 Good quality instant cooked food 54.5 39.8

FairPrice shoppers – Store repertoire Regular FairPrice shoppers who also shop regularly at other chains Past 4 Weeks Used Stores 2003 2004 2005 2006

FairPrice Faced with hyperinflation during the 1973 oil crisis, the National Trades Union Congress launched NTUC Welcome, a supermarket co-operative to contain prices of essential food products. This initiative was strongly supported by the government and the then Prime Minister Lee Kuan Yew officially opened NTUC Welcome NTUC Welcome was later renamed FairPrice FairPrice continues with its original social mission to help moderate cost of living for low income households FairPrice has been experiencing rapid growth as shoppers migrate from lower to the upper trade. (Share of Singapore’s lower trade had shrunk from over 60% in 1996 to about 20% in 2006) Large base of members (50% of homes) who benefit from loyalty programs

FairPrice – Image Associations SCORE CARD Change Vs Last Year FairPrice – Image Associations. Percent Points change in rating versus 2005 FairPrice – Image Associations SCORE CARD Change Vs Last Year Improve Maintain Decline Base: All shoppers who shop regularly at FairPrice

Shop n Save Acquired by Dairy Farm International (DFI) in 2003 G-Value, another DFI chain, re-branded Shop n Save in 2005, taking the store count of the newly acquired chain from 35 to 46 stores SnS stores located at high traffic locations SnS not as profitable as some of DFI’s other assets

Shop n Save: Store Interaction measures and store count Shop n Save – loyalty pyramid – 2002 to 2006 2003 2004 2005 2006 Recommenders (%) Preferrers (%) Dependables (%) Regulars (%) Considerers (%) Trialists (%) Aware (%) Non considerers (%) Too Hard to Get to (%) Unaided, Aided Unaided, Aided Unaided, Aided Unaided, Aided Stores G-Value NOTE: Eleven G-Value stores were re-branded as Shop n Save in 2005

Shop n Save – Image Associations SCORE CARD Change Vs Last Year Shop n Save – Image Associations Percent Points change in rating versus 2005 Shop n Save – Image Associations SCORE CARD Change Vs Last Year Improve Maintain Decline Base: All shoppers who shop regularly at Shop n Save

Shop n Save and FairPrice: Image ratings Image Profile Analysis - Key Food & Grocery Retailers Relative Importance Most Least Performance = % top two boxes out of 5 scale Base: Respondents who shop regularly at store

Cold Storage, Sheng Siong and FairPrice – Image Ratings Image Profile Analysis - Key Food & Grocery Retailers Relative Importance Most Least Performance = % top two boxes out of 5 scale Base: Respondents who shop regularly at store

Sheng Siong Founded in 1985 Lim Hock Chee was the key thinker, strategist and showman at Sheng Siong Low price strategy through cost control Lowest cost structure Low overheads Low rent locations Low wage structure Sourcing from lowest cost suppliers No frills merchandising / shop environment In 2005, operated 16 supermarkets and 1 hypermarket located mainly in neighbourhood suburbs Invests in logistics and IT. Robust electronic procurement system

Sheng Siong – Image Associations SCORE CARD Change Vs Last Year Sheng Siong – Image Associations. Percent Points change in rating versus 2005 Sheng Siong – Image Associations SCORE CARD Change Vs Last Year Improve Maintain Decline Base: All shoppers who shop regularly at Sheng Siong

Lowest Priced Supermarket / Hypermarket Stores (Perceived) Perception on lowest price Q: Which store offers lowest price for your favourite food and grocery brands? Lowest Priced Supermarket / Hypermarket Stores (Perceived) % of respondents Base: All supermarket/Hypermarket Respondents (N=866)

Sheng Siong

Shop n Save

FairPrice