While customer traffic at most bricks-and-mortar retail stores has declined (or been offset by website visits), people are making more trips to the supermarket, according to the latest ‘State of the Nation’ report from Roy Morgan Research.
Australia’s grocery buyers together made an estimated 1.9 billion separate trips to the supermarket over the 2014/15 financial year – almost 300 million more than in FY09/10.
The annual grocery market is now valued at $102.2 billion – of which $88.9 billion is spent at supermarkets.
Woolworths’ market share fell 2.3 per cent points between June 2014 and June 2015 to 37.6 per cent, equivalent to just over $2 billion in lost gross revenue. Coles gained 0.2 per cent points in share over the period (up to 32.3 per cent) and ALDI gained 1.5 per cent points (up to 11.8 per cent).
Looking at broader retail, shoppers spent more than $100 billion in FY14/15 on items including clothes and shoes, hardware, appliances and furniture, home-entertainment products and devices, perfume, cosmetics and skin care, sporting goods, games and pet supplies. Total spending on such commodities, whether online or in-store, increased by five per cent compared with the previous financial year.
Australians made a combined 1.34 billion trips to department stores, discount stores, hardware, homewares, clothing and music stores and newsagents over the financial year – around 170 million fewer than five years ago despite a growing population. Hardest hit have been the stores facing the strongest digital disruption: newsagents received almost 100 million fewer visitors in the period than in 2009/10, and the number of music-store visits fell by more than a third. Among these types of stores, only hardware outlets have increased their visitor numbers.
However, although many of today’s retailers might be seeing fewer in-store customers, plenty are instead visiting via their websites. Forty-seven per cent of survey respondents agree they will research products online before buying from a store, and 31 per cent say they will use the internet to research a product or service to buy in an average four weeks.
Australia’s consumers spent an estimated $37.8 billion online over the past financial year.
Overall, we increased our expenditure online by 9.7 per cent compared with the year to June 2014. The fastest growing online shopping categories by total dollars spent year on year are home and garden (up 26.5 per cent) and electronics (up 23.1 per cent). Online spending was below average for clothes (up 8.1 per cent) and travel (up 4.6 per cent), while the amount spent online for health and beauty products declined 2.6 per cent year on year.
When it comes to their own internet offerings, traditional retailers have been catching up on online-only stores. Five years ago, virtually all the money we spent on commodities online was via online-only stores, but, each year, retailers have been taking a larger share: now 34 per cent of the market is for bricks-and-mortar retailers’ internet stores.
Roy Morgan Research CEO Michele Levine says the retail industry is shifting to an omnichannel perspective.
“Consumers don’t care about the battle between online and traditional bricks-and-mortar stores – for them, it’s all shopping,” she said. “They research products online before visiting the store, or they touch, test and try on in-store before buying online.
“Today’s shoppers want [and expect] it all, and to be able to get it by whatever device or channel suits them best. Our most successful retailers – from niche, online-only sellers to national chains to international juggernauts – are those that can supply the demand from all angles.”
Since the GFC, income growth among older and mid-life households has outpaced growth among young singles and couples. Those aged 14-49 have become more likely to say they don’t buy luxuries anymore, while those aged 50-plus are relaxing the purse strings.