Shoppers vote for Asda in Safeway takeover tussle

- Last updated on GMT

Related tags: Safeway, Asda, Tesco, Sainsbury's

The Competition Commission has another month to decide which
retailer will be allowed to bid for Safeway, but UK consumers, it
seems, have already made up their minds. A recent poll by Mintel
showed that the good value for money strategy of Asda made it the
most popular choice to take over the company.

Four retail companies are currently fighting it out for the right to buy the Safeway supermarket group in the UK. According to a recent consumer poll, the battle is already won, with Asda coming out victorious.

A survey by Mintel's UK Retail Briefing asked consumers which company they hoped would emerge victorious in the battle for Safeway​, with 17 per cent of those questioned opting for Asda​, the UK arm of the world's leading retail group Wal-Mart.

Tesco​, which is Britain's biggest player, was the second choice, although only one in 10 of those questioned said they would be happy to see their local Safeway replaced by a Tesco outlet.

Some 8 per cent of respondents chose Sainsbury's​, while 7 per cent plumped for Morrisons​, the company thought most likely - at the moment - to win Competition Commission approval.

The Mintel survey showed that just one in seven of the 1,011 adults questioned wanted the store to remain a Safeway outlet.

"Asda was by far the most popular choice amongst consumers to replace Safeway, reflecting the reputation it has built up nationally for good value for money and a strong non-foods offer. It seems that few will mourn the passing of Safeway if its stores are converted to one of the other major chains,"​ said Richard Caines, retail consultant at Mintel.

The four supermarket bids for Safeway are currently being investigated by the Competition Commission, while a possible fifth bid from entrepreneur Philip Green, is not subject to approval. So far, the only company to have made a firm offer for Safeway is Morrisons.

According to Mintel, while Asda may be the most popular choice among consumers, Tesco had the broadest appeal across the demographic spectrum. It was strongest amongst those in the 16-24 age group and with more affluent shoppers, reflecting its upmarket positioning.

Asda, on the other hand, was most popular with those in the 25-34 age band, the young family group, and those with middle to lower incomes.

Sainsbury's also appealed to more affluent shoppers, and, unsurprisingly, given the chain's coverage, those that live in the south and in London. Morrison's scored well in the north, particularly in Yorkshire and the North East, where it was the first choice to replace Safeway, reflecting its concentration in this region.

The survey also revealed that consumers prioritise choice over convenience when it comes to grocery shopping, with three in every four adults claiming that they liked to shop at the store which offers the widest range of foods. On the other hand only just over half said that they tended to shop at the store nearest to them.

Nearly all of those questioned (85 per cent) said that they found a store's fresh food offer particularly important in attracting them to a particular retailer.

The results of Mintel's consumer survey also show that groups such as Friends of the Earth - which is opposed to the Safeway sale - are increasingly out of touch with the demands of the consumer they claim they are protecting.

The group demonstrated its opposition to the takeover at Safeway's AGM earlier this week, claiming that any deal would inevitably mean that consumers will suffer because of higher prices and lower quality.

But this is not what the Mintel survey shows, with consumers questioned by the market research group showing their confidence in Asda's ability to keep prices low.

FoE​'s claim that the reduction in the number of supermarkets will also cause the demise of local shops also seems to be out of step with consumers: shoppers want a larger range of goods rather than a convenient local store.

For further details about Mintel's range of market research services, click here​.

Related topics: Market Trends

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