FDBusiness.com

Supermarket Range Cuts Drive Decline in Sales of New Product Launches in the UK

 Breaking News
  • Continued Growth by Marston’s Marston’s, a leading British pub operator and independent brewer, has reported a 4.7% rise in underlying revenue to £553.1 million for the 26 weeks ended 30 March 2019, reflecting strong growth in its brewing business, the contribution from new openings and pub acquisitions and positive like-for-like sales in its pub businesses. Underlying operating profit at [...]...
  • UK Ethical Food and Drinks Sales Hit £8.2 Billion British consumers are increasingly eating with a conscience as latest research from Mintel reveals that last year the nation spent £8.2 billion on ethical food and drink, including organic, Fairtrade, Rainforest Alliance and Marine Stewardship Council (MSC) certified products. Over the past five years, sales of ethical food and drink have shot up by 43% [...]...
  • UK Restaurant Closures Accelerating as High Street Pressures Mount The number of restaurants in Britain fell by 2.8% in the year to March 2019, the latest edition of the Market Growth Monitor from CGA and AlixPartners reveals — with high streets in the south of England, excluding London, hit especially hard by closures. The figure equates to net closures of 768 restaurants over 12 [...]...
  • European Commission Clears Acquisition of European and Thai Businesses of BRF by Tyson Foods The European Commission has approved, under the EU Merger Regulation, the $340 million acquisition of the European and Thai Businesses of BRF of Brazil by Tyson Foods of the US. BRF’s European and Thai businesses are active throughout the poultry supply chain in Thailand, and import into and further process poultry meat in the European [...]...
  • Samworth Brothers Launches New Food-To-Go Business Samworth Brothers, the family-owned British food group, has launched a new food-to-go business and delivery service – Fresh Food For Now Company. The new venture marks the evolution of the existing Ginsters van operation into a fresh new business, offering vendors a complete food-to-go solution with an extended range of brands and products to cater [...]...

Supermarket Range Cuts Drive Decline in Sales of New Product Launches in the UK

Supermarket Range Cuts Drive Decline in Sales of New Product Launches in the UK
June 15
10:07 2017

As supermarkets across the UK continue to cut the number of products they stock, sales from branded new products were down by -6.5%, which equated to losses in revenue from new product development of £99.6 million. According to a new study by IRI, a leading provider of big data and predictive analytics for retailers and suppliers, the number of items stocked by supermarkets across the UK declined by -5.7% in the last year (to end February 2017).  An average of 930 fewer products were available to shoppers in their local supermarket.

Key highlights from IRI’s Big Question study on the impact of range rationalisation  are:

  • 8.4% fewer new branded items were launched in the last year. The number of new private label items launched also fell but at a much slower rate of 2%.
  • Sales from new products were down by -6.5%, which equated to losses in revenue from new product development of £99.6mn. The contribution that NPD makes to overall grocery sales also declined.
  • New products are finding it harder to achieve sufficient distribution in multiple retailers. Only 1 in every 7 new products launched achieved more than 75% distribution across the major UK supermarkets in the last year. Only half of all new products achieve more than 33% distribution. The average maximum distribution achieved by new products was just 39%. This is significantly lower than the last two studies that IRI has conducted on the state of new product development (NPD).
  • Range cuts were deepest in Asda (by -9.8%). Tesco and Co-op reduced their product range by -8.3%.  Sainsbury’s reduced its range by -1.7% and Waitrose by -2.7%.
  • Iceland increased its range by 6.1% as the retailer opened more new stores as well as launched a new luxury range to take on Aldi and Lidl that includes Pizza Express frozen pizzas.
  • Price premium declines – The initial price premium traditionally associated with launching new products is lower. Suppliers can expect a 45% price premium compared with the average price of a similar product in the same category in the first four weeks. In the last study (measuring the three-year period between 2013 and 2015) it was 60%.

“Because it’s becoming harder for manufacturers to stay on shelves as well as get new products into stores, they are finding it more difficult to get the high level of distribution they need to make a success of NPD and cover the expense of innovating,” says Tim Eales, Strategic Insight Director at IRI. “Manufacturers are caught in a downward spiral that is becoming harder to climb out of. The challenge of achieving a sales rate for new product launches, that is greater than most of their direct competitors, makes most of them vulnerable to delisting in some stores.”

He adds: “Manufacturers may also be considering the higher cost of communications to support NPD across multiple media as another barrier to innovation. Ultimately securing distribution is the most important changing variable in the NPD landscape.” concluded Eales.  Manufacturers and retailers working together with the data, optimising their range with the best NPD, is surely the way forward to ensure that consumers get the right choice of what’s new.”

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • June 18, 2019Multimodal 2019
  • June 25, 2019BevExpo 2019
AEC v1.0.4

Jobs: New Product Development

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements