Analysis of the Demand for a M&S Simply Food Convenience Store

INTRODUCTION In this breed we assess whether an M&S exclusively pabulum whatsis chime in would be profitable when located in coordination compound Desjardins, Montreal. In the U. K. only when solid nourishment possess a watertight home run image and wide-variety of products that emphasize tonicity. Although considered more expensive than competing stores To see if the grasp leave behind support the said(prenominal) take aim of achi of all time in Montreal, we starting analyzed the fundamentals and competitive landscape of the industry. Once a jailbreak in the commercialise was identified, we used quantitative question practices to examine each of the marketplaceing mix factors involved in establishing the store.Our findings will indicate whether the status and consumer pool under consideration will RESEARCH OBJECTIVES * Identify the M&S obviously diet products and serve, and the factors that drive the chains succeeder in the U. K. * Analyze the market funda mentals of the convenience store welkin in Montreal, and identify whether a market gap for quality, ut almost-end stores such as M&S Simply sustenance exists * Assess whether M&S Simply fodder will be profitable in mingled Desjardins based on the adjacent factor (i) Location (ii) Consumer Demographic (iii) Consumer Preferences (iv) contention & Pricing Propose differentiate operating and marketing strategies to ensure the triumph of M&S Simply diet in convoluted Desjardins. methodological abridgment constancy Knowledge Exploratory research was employed to gain catch of the U. K. convenience market and lean how the M&S Simply Food chain is positi oned. This involved a review of studies and selective information made accessible by leading international research institutions, as puff up as informal discussions with consumers who precedingly lived in London and ar familiar with the brand. We utilize the same methodologies when conducting a similar analysis of the Mo ntreal convenience market.In this stage of our research we were able to apply more formal approaches, such as conducting in-depth interviews with store managers. After all the necessary information was acquired, a qualitative similarity of the industries was made to determine whether opportunities existed for M&S Simply Food in Montreal and whether a repositioning of products would be needed. Target Market From our previous analysis we establish a betoken market consumers at the abstruse Desjardins. This status is one of the important attractions in Montreal, at a vast 4 million square feet.Roughly 30,000 people come to the complex and its environment day by day to work, shop, eat and/or enjoy the activities environ the Central uncoiled. The Central Square inside the building has a surface of 15,000 square feet and is surrounded by a commercial gallery of 100 stores and restaurants. Thus, this muddle was chosen because of its honor and large exposure to residents and tour ists. Survey and Sample Size To determine whether consumers at Complex Desjardins would be automatic to purchase M&S open Food products we conducted an anonymous survey on feed services inside the complex.The survey was a questionnaire made up variety of formats designed to become out information about the location, demographic, consumer preferences, surrounding rivalry, pricing comparisons and consumers willingness to pay. Interviews were conducted at the Complex Desjardins, as well as at bottom a 500m radius of its surroundings which comprised of Complexe Guy-Favreau, Bleury Street, Place Des Arts and Boulevard Saint-Laurent. We classified qualified respondents as consumers that came through the complex at least 3 multiplication a calendar week.In heart and soul, we interviewed 96 people, considering a vari magnate of 50% and a 10% satisfying sampling error at 95% level of confidence. Assuming the total population under observation here is 30,000, it is observable that a 5% confidence interval is well supra 96. Thus, no more readjustments are needed due to unretentiver sampling size. FINDINGS Convenience Market (1) U. K. Industry The U. K. convenience store market was valued at ? 30. 9 gazillion in the 12 months to April 2010, representing a 6. 3% increase on the previous year. The value of the market continued to grow despite a 0. 5% in store human bodys. With he total U. K. Food and Grocery market expanding at a slower rate of 4. 1% in the same period, it is evident that the convenience arena is accelerating at a faster footfall than the boilersuit market. Thus, its market share has risen to 20. 5%. The factors driving the sector are the rising number of single person households, a emergence population, increasing number of women in the work place and longer working weeks. The sector is also propelled forward by im confirmd operational standards, great awareness of shopper trends and more modern, tailored convenience solutions. (2) M&S S imply Food PositioningThe convenience sector is highly fragmented, with store operators divided into the following segments co-operative, fore motor inns, multiples, symbols & privilege, and non-affiliated independents. M&S Simply Food is part of the franchise segment, which preserve the fastest growth in the previous year. This expansion was driven by additional stores, increased promotional activity and improved value for money. M&S Simply Food specializes in selling ready-made repasts salads, sandwiches, desserts, snacks, and microwavable dishes. The self-service store also sells judicious produce, possessing wide selection of fruit and vegs.Being high-end oriented, the franchise targets working professionals non only looking for a fast, healthy meal, solely also willing and able to pay an additional expense for high quality sustenance. For the added bonus, customers have access to more adventurous recipes, better package and fresher ingredients. These value added service s, alongside the modern layout of the stores, give the brand a competitive edge in the market and allow it to capture a signifi trampt share of consumers. A negative sentiment expressed by consumers was attributed to the experience of purchasing at M&S Simply Food stores.Due to brands high popularity, long queues lots form inhibiting browsing by other potential customers and causing feeling of frustrations by professionals that are time-sensitive. (3) Montreal Industry The convenience sector in Montreal is made of Canadian handcuffs and independents. Family-run depanneurs cater to local neighborhoods and immigrant populations, offering specialty foods and dis expect long-distance handicraft cards alongside the usual convenience-store fare. Others offer a wider variety of services such as Canada Post, Western Union transfers, Internet access, and home-delivery of groceries.However, the market is henpecked by a large Canadian chain known as Couch-Tard Inc. The chain offers a qual ity assortment of freshly brewed coffee, frozen/iced beverages, fresh sandwiches and other fresh food items that are marked under copyrighted brands. Arguing that most convenience stores are too cluttered, the Couche-Tard comp some(prenominal) introduced a new concept called Store 2000. These stores have wider layouts, brighter lighting, modern decor and ofttimes have Quick-Service Restaurants (QSR) located within them. The new concept was a success and the results were integrated into upgrades for all stores. 4) M&S Simply Food Expanding to Montreal It is evident from our research that the U. K. has a more diverse group of convenience stores with disparate positioning catering to all consumer income brackets. However, in Montreal we see that Couche-Tard owns the majority of the market and is designed to target the mean(a) consumer, thereby not competing with deppaneurs immigrant pool. This also illustrates a gap in the Montreal convenience market value-added stores aimed at cons umers from a high income bracket. M&S Simply Foods positioning in U. K. onvenience markets makes it an i lie with candidate. Survey Results (1) Location The statistical analysis of the questionnaire revealed that everyplace 85% of the respondents visited the Complex Desjardins and its surrounding area at least 3 time a week. In remand at a lower place it is evident that the number of multiplication a week respondents enjoy meals at the complex is greater in frequency towards higher values, with the overall average at 2. 7 times. This illustrates that the location receives a great deal of foot traffic, and is a popular food services venue. Table 1 How Often Consumers Eat at Complex Desjardins Frequency part binding pct cumulative Percent validated Never 2 2. 1 2. 7 2. 7 Once a month 2 2. 1 2. 7 5. 4 Biweekly 4 4. 3 5. 4 10. 8 Once a week 7 7. 4 9. 5 20. 3 Twice a week 13 13. 8 17. 6 37. 8 Three times a week 20 21. 3 27 64. 9 Four times a week 16 17 21. 6 86. 5 Five t imes a week 10 10. 6 13. 5 100 extreme 74 78. 7 100 wanting system of rules 20 21. 3 nitty-gritty 94 100 Furthermore, findings indicate that respondents favor particular designated areas within the complex and its surroundings when eating.With response rates of 38% and 34% respectively, the most popular areas are the food court and restaurants/cafes on the adjacent Saint-Catherine Streets. diagram 1 Preferred Food Locations (2) Consumer Demographic In Table 2 we see the sample size under consideration reflects the social demographic profile of the area professionals, local residents or students demanding nearby. There is a fairly even distribution amidst male and female respondents, with males fairly ahead at 51%, conveying that the area equally attracts twain sexes. Table 2Social Demographic Profile of Complex Desjardins ground on Sample Statistics I work at or shut uplipped to Complexe Desjardins I live at or close to Complexe Deskardins I study at or close to C omplexe Desjardins None of the above N effectual 36 28 21 3 Missing 58 66 73 91 Mean 1 1 1 1 Median 1 1 1 1 sense modality 1 1 1 1 I work at or close to Complex Desjardins Frequency Percent Valid Percent Cumulative Percent Valid Yes 36 38. 3 100 100 Missing System 58 61. 7 Total 94 100 I live at or close to Complex Desjardins Frequency Percent Valid Percent Cumulative Percent Valid Yes 28 29. 8 100 100 Missing System 66 70. 2 Total 94 100 I study at or close to Complex Desjardins Frequency Percent Valid Percent Cumulative Percent Valid Yes 21 22. 3 100 100 Missing System 73 77. 7 Total 94 100 None of the above Frequency Percent Valid Percent Cumulative Percent Valid Yes 3 3. 2 100 100 Missing System 91 96. 8 Total 94 100 Consumers in the area break away to be well educated, with 63% of respondents having completed a college degree. This, alongside results that expose 41% of respondents are between the ages18-24, indicates that complex attrac ts a great deal of young professionals. However, diagram 2 below also illustrates that another 48% of respondents are between the ages of 25-40. Furthermore, the average household is occupied by 2. 8 residents and generates roughly CAN37,600 a year. These findings highlight another consumer profile, that of local residents classifying them as small family units in the middle-to-high income bracket.Thus, our findings conclude that the consumer pool at Complex Diagram 2 Income levels (3) Consumer Preferences Our statistical analysis of the questionnaire revealed that the consumer preferences of the sample pool are aligned with M&S Simply Foods products and services. Roughly 61% of respondents declared that they would purchase food from a convenience store specializing in quality. Their main justifications for purchase included the reliability of quality food, the convenience of ready-made meals, the ability to enjoy restaurant quality food at lower prices, and the guess to maintain a healthy diet.Furthermore, the study revealed that when faced between the choices of filling up their own food or having it served to them, respondents were equally divided. These factors encompass the overall message, products and services of M&S Simply Food value-added services. Table 3 analyzes the kinship between price and healthiness of food in term of their importance to the end consumer. The cross tabulation clearly reflects the two variables are integral in the decision making process of the consumer the more tenseness placed on the healthiness of food, the more significant pricing becomes.We can also conclude from the chi squared test that the relationship between the two variables is statistically significant. Unfortunately, our findings proved inconclusive when determining whether consumers would be willing to pay more for healthier, higher quality food. This limitation was due to the deprivation of responses to the particular question in the survey. Table 3 Relatio nship among charge and Health in Consumers Decision-Making Process Healthy food on the menu * Price Cross Tabulation Count Price Least 2 3 5 6 7 8 9 roughly important Total Healthy food on the menu Least important 1 0 0 0 0 0 0 0 0 1 3 0 1 0 0 0 0 1 1 0 3 4 0 0 0 0 0 1 0 0 1 2 5 0 0 0 0 1 2 0 0 0 3 6 0 0 0 0 2 1 3 2 0 8 7 0 0 0 1 1 3 3 4 3 15 8 0 0 0 0 1 3 8 2 4 18 8 0 0 1 2 1 2 0 2 0 8 Most important 0 0 0 0 4 0 2 2 7 15 Total 1 1 1 3 10 12 17 13 15 73 Chi-Square Tests Value df Asymp. Sig. 2-sided) Pearson Chi-Square 1. 52E+02 64 0 Likelihood Ratio 72. 529 64 0. 217 Linear-by-Linear Association 6. 593 1 0. 01 N of Valid Cases 73 a. 81 cells (100. 0%) have expected count less than 5. The minimum expected count is . 01. correlativitys Healthy food on the menu Price Healthy food on the menu Pearson Correlation 1 . 303** Sig. (2-tailed) 0. 09 N 74 73 Price Pearson Correlation . 303** 1 Sig. (2-tailed) 0. 009 N 73 73 **. Correlation is significant at the 0. 01 level (2-tailed). How appealing varying food items are to the sample pool is illustrated in the table below through the reckon value of each product with the number 1 representing very little appeal and the number 10 great appeal. The relatively stronger desire for salads and sandwiches over desserts reflects the health conscious nature of the consumer.Furthermore, the high frequency of fruits appeal projects consumers eagerness for diversity in menu options. Thus, it is evident that the reek preferences of the consumers are in line with some of the Simply Food products. However, the absence seizure of responses concerning vegetables and microwavable meals suggest a lack of demand for such items. Table 4 Appeal of Food Products Salads Sandwiches Desserts Juices growths N Valid 74 73 74 73 74 Missing 20 21 20 21 20 Mean 7. 35 7. 95 6. 41 7. 37 6. 95 Median 8 8 7 8 7 Mode 7a 9 9 8 7 a. Multiple modes exist.The smallest value is shown (4) opposition and Pricing Several questions in the survey were designed to size the level of competition M&S Simply Food would face in Complex Desjardins. Our findings concluded that respondents favored a combination of restaurants and food court stations, with the top two in each respective category universe (1) Eggspectation and Baton Rouge and (2) A&W and Subway. This gives M&S Simply Food a competitive advantage as its high quality food gives consumers the restaurant feel, while its ready-made, self-service concept mimics the convenience of the food court.Despite the popularity of some competitors, 63% of respondents stated that they do not have a preferred food chain. The results indicated that bad service and poor quality of food were the main deterrents of brand loyalty. However, nearly half of respondents expressed boredom with original food chain alternatives and ea gerness to try new venues. When asked about sentiments regarding a new chain called Simply Food, 42% of respondents said that the pick up appealed to them. Also, Diagram 3 illustrates the styles of cuisines respondents believe are missing in the complex. Diagram 3 Styles of Cuisine Missing in Complex DesjardinsThe frequency below illustrates that 47% of respondents spend between CAN10. 00 to CAN14. 99 on a meal in Complex Desjardins, with the overall average meal costing CAN11. 80. In comparison, M&S Simply Food individual products range on average from CA2. 00 to CAN4. 50. However, in Table 5 below we see that the brands luxury meals cost significantly more, averaging CAN22. 00. Taking into consideration the average expenditure of respondents, the findings suggest that consumers in Complex Desjardins are more plausibly to purchase individual food items, rather than an entire luxury meal.Table 5 M&S Simply Food Prices speak to in Pounds (GBP) Cost in Canadian Dollars (CAN) sig htly Cost of Salads 2. 77 4. 34 come Cost of Ready-Made Meals 2. 64 4. 13 Average Cost of Fruit 2. 81 4. 40 Average Cost of Dessert 1. 31 2. 05 Average Cost of Luxury Meals 14. 11 22. 08 Correlations By running a series of correlation tests, we discover whether the demand for food within the complex is influenced by the income level of the respondents, the price of food, types of food chains available and consumers taste preferences.Table 6 below shows that the only 2 variables that are correlated are the number of times respondents eat at Complex Desjardins and the annual income levels. Although the value is not statistically significant to 0. 05, it is significant enough to display a relationship that the frequency of visits, or rather demand, is determined by and proportional to the income levels of respondents. Table 6 Variables Correlated with the Demand for Food How often eaten at Complex Desjardins Which area do you prefer to eat in Educational level Income Level How ofte n eaten at Complex Desjardins Pearson Correlation 1 . . 343** 0. 116 Sig. (2-tailed) . 0. 003 0. 332 N 74 0 72 72 Where? Pearson Correlation . a . a . a . a Sig. (2-tailed) . . . N 0 0 0 0 Education Pearson Correlation . 343** . a 1 . 324** Sig. (2-tailed) 0. 003 . 0. 006 N 72 0 72 70 Income Pearson Correlation 0. 116 . a . 324** 1 Sig. (2-tailed) 0. 332 . 0. 006 N 72 0 70 72 a. Cannot be computed because at least one of the variables is constant. **. Correlation is significant at the 0. 01 level (2-tailed). LIMITATIONS As in any research report, a number of limitations in the execution and analysis of our report occurred. The main issue we encountered was that of missing data, in which a number of questions in the questionnaire were left unanswered. As a result, many of our estimates were found statistically unable due to loss of information, while other estimates may be considered slanted if the data from questions left vacant are systematically different. I n the future, we suggest increasing the sample size to ensure a more good and valid data set.Another common limitation is the subjectivity of surveys in that respondents often fail to answer questions truthfully and therefore skew the results. Efforts to ensure data is accurate would have required more expenditure however reckon restrained us from implementing such solutions. Budget constraints limited the sample size, and assist should be exercised in the future to general these findings further. CONCLUSION & RECOMMENDATIONS After practically assessment, we believe that M&S Simply Food will prove to successful if established in Complex Desjardins.Our findings conclude that the complex and its surrounding are the ideal location to for Simply Food to attract its target market. Consumers that purchase food at the complex are young professionals and local residents who fall into the middle-to-high income bracket, and therefore are able to afford brands higher priced products. Furthe rmore, consumers product preferences reflected strong desires for higher quality food and a wider variety of cuisine options. Simply Food prides itself on offering its consumers premium quality meals made from adventurous recipes and fresh ingredients, and therefore will be able to capture this unmet demand.Although there is a great deal of competition in the Complex Desjardins, its consumers are open to change and are ever evolving their taste pallet. The unique style of M&S Simply Food enables it to will consumers with quality restaurant food at the speed and convenience of food court service, thereby capturing a wider share of the market and competing with both food chain categories. The following is a list of recommendations we believe will ensure the profitability of M&S Simply Food in Complex Desjardins * Locate the convenience store in the food court, as it attracts the greatest number of consumers.The food court also compliments the self-service nature of the store, providi ng consumers with an adjacent seating area. * Ensure all advertisements of the brand potently highlight the Simply Food name, as well as key phrases that reflect the stores value-added services for example High Quality Food, chivalric Recipes, Variety of Cuisine Options, and A Healthy Meal Option. This well help the brand appeal to consumers preferences. * Limit products to ready-made meals, sandwiches, salads, fruits and beverages.Exclude the sale of vegetable produce and microwavable meals, as there does not seem to be a demand for such items. * To encourage the sale of more expensive luxury platter meals, we suggest holding discount promotions during the soft opening of the store. centralise the price of platters to slightly below the average cost of meals in the complex, in order to entice consumers and build brand loyalty. * To compete with competitors, M&S Simply Food must build up its reputation as a quality food provider at a fast and convenient pace.To ensure this is do ne successfully, stores must be designed to provide adequate space for browsing, which is to be separated from the pay register. By doing so M&S Simply Food will not have the same queuing problem it encounters in the U. K. , which often deters potential customers. REFERENCES IGD The Food and Grocery Experts. Convenience Retailing Market Overview, On-line. Available http//www. igd. com/index. asp? id=1&fid=1&sid=7&tid=26&cid=91 20/1/11 Marketing week (2007, April). Assessing the M&S Simply Food Brand, On-line. Available