Table of Contents

Overview 1
Catalyst 1
Summary 1
Table of Contents 2
Table of figures 3
Table of tables 4
THE FUTURE DECODED 5
INTRODUCTION: Top-up grocery shopping is under threat in the near future 5
Definitions and why top-up shopping should not be confused with more "traditional" retailing 5
The economic slowdown and rising food prices combine to place grocery shopping under pressure 5
The effects of these trends can already be seen in people's grocery shopping habits 8
The better off, as well as low income groups, are concerned about their spending 8
Middle income groups are also cutting back 8
"Value-for-money" is now the key determinant of grocery choices 10
Products and channels which typically serve top-up shoppers are under pressure 12
C-stores, especially smaller independents, will struggle to compete on price 12
The US is seeing a cut-back in top-up shopping, but not all countries will follow this pattern 13
TREND: Top-up shopping has established itself as a major part of shopping occasions in recent times as consumer lifestyles have evolved 14
In absolute terms top-up shopping is now more common than main shops 14
The share of top-up shops is highest in Brazil, Russia and Spain 15
Several reasons account for the level of top-up shopping's popularity 16
TREND: Levels of top-up shopping are shaped by traditional retailing habits 19
The average Russian shopper makes nearly 60 more top-up shopping trips per year than main shops 19
Brazil, Russia and India display a strong top-up shopping tendency 21
TREND: Top-up shopping continue to be relied upon, but not in all countries 22
Overall there is an increasing reliance on top-up shopping despite the economic trends 22
In the US, Germany and the Republic of Korea, Datamonitor expects top-up shops to decline in the future 22
Many countries will see the reliance on top-up shopping grow, despite economic concerns 23
INSIGHT: In most countries women are marginally more likely to top-up shop than men 24
In ten out of the 15 countries covered women are more likely to top-up shop than men 24
And the only very strong male bias in top-up shopping is in India 24
INSIGHT: The increasing reliance on top-up shops varies more greatly between the sexes 26
Overall, men are becoming more reliant on top-up shopping 26
Women will become more important in Australia, Japan and the UK 27
In the Republic of Korea and Germany, where top-up shopping is set to decline, men will be less likely to give up top-up shopping 28
INSIGHT: Mid-lifers are the key top-up shoppers 28
Mid-lifer consumers aged between 25 and 49 years old are the core top-up shoppers today 28
Within each country, rates of top-up shopping vary little by age, but country differences are substantial 30
INSIGHT: Young Adults and Early Mid-lifers are increasingly reliant on top-up shops 31
The core top-up shoppers tomorrow will continue to be aged under 50 31
INSIGHT: While the economic downturn will negatively impact top-up shopping, the smaller store formats typically associated with top-ups have the potential to better meet other important needs 32
Around the world consumers feel that there is often too much choice in stores 32
C-stores in particular can play a key role in simplifying choices for consumers 34
Despite being attracted by the prospect of trying new things, many consumers adopt a passive, inattentive mindset towards shopping 35
Store formats associated with top-up shops can potentially meet consumers' intensifying desire for local products 38
FUTURE OUTLOOK: the BRICs, the UK, Spain and Australia are the most attractive top-up shopping markets for the future 39
Key findings and conclusions 40
ACTION POINTS 41
INTRODUCTION: The need to rethink approaches and be consumer driven 41
ACTION: Product positioning needs to strategically align with 'high-low' shopping behavior 41
ACTION: Manufacturers and retailers should check offerings against the nine-box consumption grid 42
Use a high-low strategy to successfully align products with different income groups 43
Private label perhaps offers an opportunity in c-stores because it is associated with value-for-money 44
Several countries are already seeing private label growth in c-stores 44
ACTION: Don't forget to target the consumer trends that have shaped recent behavior 44
ACTION: Ensure that the key 25-49 year old age group is well catered for 47
ACTION: Ensure women and men are equally well catered for 48
ACTION: Target specific top-up occasions, especially the need for an inexpensive night in 49
Marks & Spencer's Dine in for two for £10 highlights how retailers can act as an alternative to a night out 50
ACTION: Target on-the-go consumption through updated offerings and offering "value for time" 51
There are also on-the-go opportunities in personal and even household care 52
Retailers should also seek to find new ways to offer consumers time-saving benefits 53
ACTION: Target the emerging national opportunities by the consumer groups driving them 54
Women will be increasingly important in the UK, Japan and Australia 54
Retail formats can be introduce to help target women more effectively 54
The 18-24 year old group offers new opportunities in Brazil, Germany, Sweden and the Netherlands 55
ACTION: Adjust retail offerings to target local demographics and serve under-provided for groups 55
ACTION: Simplify the in-store experience for consumers and enhance the retail environment 56
Well-thought out product ranges are key, as is the retail environment 56
ACTION: Ensure pricing differentials between the convenience and other channels don't grow 57
Recognize that the perception of price is as important as the actual prices themselves 57
Recognize that consumers are increasingly able to research prices independently 57
APPENDIX 59
Definitions 59
Methodology 59
Further reading and references 60
Ask the analyst 61
Datamonitor consulting 61
List of Tables
Table 1: Consumer survey: the propensity to choose food and beverages, cosmetics and toiletries, household and laundry care and alcoholic drinks on the basis of value/cost in the previous six months, in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008 11
Table 2: Number of 'top-up' versus 'main shops' (millions and per cent), in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008 by country, 2008 16
Table 3: Number of top-up and main shops per capita* per year and difference, in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008 21
Table 4: The percentage of consumers who are becoming either more or less reliant on top-up shopping over the last six months, and the difference between them, in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008 24
Table 5: Male and female top-up shopping occasions by country, and the difference between them, in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008 26
Table 6: Percentage of consumers stating whether they are either increasingly and decreasingly reliant on top-up shopping over the past six months, in 15 countries across Europe, Asia Pacific, South America and the US, by country and gender, 2008 27
Table 7: Share of top-up shops (% of all top-up shops), in 15 countries across Europe, Asia Pacific, South America and the US, by country and age group, 2008 29
Table 8: Per capita number of shopping trips by age group and overall*, in 15 countries across Europe, Asia Pacific, South America and the US, by country and age group, 2008 30
Table 9: Net differences between those who are more and those who are less reliant on top-up shopping over the past 6 months, in 15 countries across Europe, Asia Pacific, South America and the US, by country and age group, by age, 2008 32
Table 10: Consumer survey: attitudes towards whether there is too much choice when doing grocery shopping in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008 33
Table 11: Consumer survey: percentage of respondents who "don't seem to notice new products" versus those who "actively monitor new products", by FMCG product type, in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008 36
Table 12: The penetration, increasing reliance on, and total number of top-up shops by country, in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008 40
List of Figures
Figure 1: The majority of consumers recognize they are immune to the current economic downturn 7
Figure 2: Consumers are making efforts to save in light of the current downturn 7
Figure 3: Ratio of household debt to gross disposable income (percent) 1999-2005 9
Figure 4: The nine box consumption grid shows that consumers will move away from unattractive product and retail propositions, leaving poorly positioned products misaligned to their needs 13
Figure 5: Top-up's share of combined top-up and main shops is over 50% in eight of the countries covered 15
Figure 6: A reliance on time saving products and services is a driver of top-up shopping 17
Figure 7: The stores facilitating top-up shops should appeal to the overwhelming majority of consumers who are attracted by the idea of living a less complicated lifestyle 18
Figure 8: A quick top-up shop will appeal to the high numbers of consumers who dislike grocery shopping 18
Figure 9: Per capita* analysis of the difference between the number of top-up and main shops reveals more significant country differences in shopping behaviors 20
Figure 10: Analysis of the difference between the number of male and female per capita* top-up shops shows some significant gender biases by country 25
Figure 11: Consumers aged between 25 and 49 years old dominate top-up shopping 29
Figure 12: A large proportion of consumers already feel there is too much choice when doing grocery shopping: this helps explain the appeal of smaller store formats facilitating top-up shops 34
Figure 13: Consumers have an innate interest and desire to try new things but it appears that does not fully manifest in their shopping habits 37
Figure 14: Consumers are expressing a growing preference for things produced locally - something that smaller stores associated with top-up shopping can potentially capitalize upon 38
Figure 15: Opportunities exist in the BRIC countries, but some more developed markets also offer growth potential for top-up shops 39
Figure 16: High-low behavior will see consumers frequently substitute medium price and medium quality products for those with a different positioning 42
Figure 17: On-trend products can be used to target high-low consumption 43
Figure 18: Amidst all the focus on value driven shopping, industry players must not forget to target the consumer trends that have shaped recent behavior 45
Figure 19: On-trend innovations targeting trends existing prior to the downturn will continue to do well 46
Figure 20: Product positionings must be checked against the latest consumer behavior to confirm that they are still "on-trend" 47
Figure 21: Within the 25-49 year old age range, similar needs will often result in different purchases for the two main age groups within this range 48
Figure 22: More clearly differentiated male and female offerings can be offered in-store within a single category to maximize in-store relevance for all consumers 49
Figure 23: Marks & Spencer's "Night in" campaign highlights how retailers and manufacturers can offer consumers a cost-effective alternative to going-out 50
Figure 24: Consumers will continue to seek out new on-the-go style products 52
Figure 25: On-the-go personal care items are ideally suited to top-up shopping, especially in convenience channels 53
Figure 26: New store concepts, such as those targeted women in Japan, highlight that the retail environment can be updated to target emerging consumer groups 55
Figure 27: Consumers are increasingly able to research prices independently, facilitated by new initiatives in pricing transparency such as that offered by GROCERYchoice in Australia 58