Convenience stores better at branding than supermarkets: TNS

The WPP research company’s global ‘Commitment Economy’ survey found that as much of 10 per cent of Carrefour’s nearly 30 per cent share of shoppers were not committed to the brand, and would choose to shop elsewhere if they could. Close to 2.5 per cent of Tesco’s 11 per cent share expressed a similar sentiment.

In contrast, brands such as FamilyMart registered relatively high brand affinity among consumers. The convenience store scored highly in terms of intimacy and community focus.

Based on the findings, TNS estimates that FamilyMart is in a position to grow its market share from 4.7 per cent to nearly 8 per cent if it addresses barriers such as location and price, impacting the bottom line of supermarkets.

FamilyMart’s activities are currently concentrated on Shanghai, where it has enjoyed a level of success by drawing young urban shoppers away from supermarkets and more traditional corner shops. TNS indicates that shoppers are unlikely to abandon supermarkets altogether, but suggests that smaller retail outlets such as FamilyMart, Watsons, Metro and KEDI all stand to benefit from the trend.

TNS puts FamilyMart’s growth opportunity in Shanghai at 3.3 per cent; Watsons at 2.6 per cent; Metro at 2.5 per cent; and KEDI at 1.6 per cent. The figures were determined by comparing current market share with brand appeal in the minds of consumers.

According to Sandy Chen, senior research director at TNS China, large scale retailers would do well to follow the example of smaller outlets if they are to maintain market share. Chen points to improving the speed and ease of the shopping experience and stocking consistently fresh, high quality products as factors that contribute to brand affinity.

“If China’s retail giants get these things right while [using] their size and scale to outperform convenience stores on price, smaller players such as FamilyMart will have a bigger challenge on their hands,” she said in a statement.

Jan Hofmeyr, chief researcher of behaviour change at TNS, added that the large market share held by major retail brands did not take into account the number of potentially disloyal shoppers. “These ‘sad shoppers’ are an easy target for competitors looking to steal market share,” he said. “All it takes is for a rival brand to identify the triggers that will prompt customers to switch. As consumers are confronted with [increasing] choice, retailers should be asking themselves whether footfall is backed up by real commitment to the brand.”

The study canvassed 39,000 people across 17 markets worldwide.