OVERCOMING BARRIERS ETHNIC GROCERY Ethnic grocery market UK

Intro..The UK is a diverse market with many ethnic groups, more than 300 languages are now spoken in London alone.Musims are now the largestreligious group in the UK afterChristianity.Most second and third generation ethnic minorities are mobile with a high standard of education and disposable income.

UK celebrates and values, the diversity brought by its many ethnical communities such as polish, Jewish, Arab, Pakistani, Indian, Bangladeshi, Chinese and Afro Caribbean. We see that Ethnical minorities have a equal balance spread amongst the whole of the UK. However the main cities of the UK ( London, Birmingham ) still occupy a larger ethnic percentage.

Ethnic CommunitiesAs far back as the 1950’s we can see the arrival of immigrants, although the racial variety has increased considerably over the decades. Arrival of Jamaicans in the 1950’s, eastern European's in the 1990’s, Poles in 2004.In 2001 the ethnic population accounted for some 4.8m. ( Indian & Pakistani 1.8m, Afro Caribbean 1m )

2m plus Muslims, ( 4% of the total UK population ) spending is more then 20.5bn. Figures show that the potential Muslim food market equates in excess of 3bn plus and rapidly on the increase.

Ethnic CommunitiesThe Polish food market has been accelerating over the number of years in the UK. In 2007 their were 600,000 Pole’s living in the UK.Today the number has more then doubled. To accommodate the like’s of Tesco’s, Morrison’s and Asda’s have entered aggressively with Polish style ready meals and a mouth watering Polish food range.

Fact currently in the market there are some 500 plus polish lines.

Polish populationLONDON - 159,400BİRMİNGHAM - 9,750 (0.9%)MANCHESTER - 7,000 (1.4%)EDINBURGH - 13,000 (2.7%)[8]GLASGOW - 8,406 (1.4%)[9]CARDIFF - 2,800 (0.8%)BELFAST - 3,660 (1.4%)NOTTINGHAM - 24,950 (2.4%)[5]BRISTOL - 6,575 (1.5%)LEEDS 7,200 (1.0%)

Halal / Muslim MarketMuslims are another significant force in the UK food market’s. Non American brands such as Mecca Cola. We can safely say over the year’s we shall see the emergence of more Sharia Compliant Muslim brands.Universities, Schools, Hospital’s and many major UK Companies today have halal Menu’s for their Muslim Patient's, Student’s, Pupil’s and employee’s.In 2007 we saw the creation of Birmingham based Pak Supermarket, whom have since opened a number of store’s to accommodate not only the South Asian community but also the Somalian, Afro Caribbean and other ethnic communities. Traditionally for year’s halal meat has always been bought by the local smaller butcher’s. Although today Asda and Tesco have tried to penetrate this field and have been able to target a certain percentage of the second and third generation of Muslim's, but unfortunately have failed to convince the overall majority and still have some way to go. .

We can safely say for years to come we will still see generation’s of Muslim fulfilling their halal meat & poultry needs from their local smaller store butchers on their doorsteps. Increasing wealth in combination with higher then average birth rate make this sector very attractive for decade’s to come.

The wider Asian GroupMajor UK retail chains are also expanding into many other ethnic minorities targeting both the the ethnic and the white consumer.As this market expands, Strategies are being formulated on Splitting and Specializing to factor these various consumer sector’s. It is becoming the norm to retail Cantonese, Malaysian, Korean and Thai as well as Chinese food lines.

The Ethnic sector is so diverse, it can be further divided into a sea full of more segments. Indian food can be split into Gujrati, Bengali, Punjabi and Sindhi.Pakistani Food can be split into Kashmiri, Mirpuri and so forth.

FACT: Britain is the only European country, where the ethnic food market accounts for more then 3 % of all packaged food.There is no one group yet that has been able to exploit this enormous on the rise ethnic market to it’s full potential.

Wider Ethnic marketMinority ethnic population as 11.6 million peopleOr 12.9% of the total population. In 2013, blacks and South Asians were close to have outnumbered the white population in half of all London boroughs as well as the cities of Birmingham and Leicester.

42.3% living in London12% West Midlands 9% South East8% North West7% Yorkshire and the Humber

UK ethnic store modelSmaller store format on the doorstep, buried in communities with diverse ranges can become part of a bigger profitable picture.

The Strategy has to cement some of the core elements such as location, consumer demographics', pricing, promotional activity, product range, ( tailored for each individual store ) no one package fit’s all. Saving to travel mile’s, flexible opening hours, quality and affordable product’s, a good selection of chilled, produce, meat, fruit & vegetables in combination with non food line’s such as medicine’s, pet food, house hold cutlery, toiletries, stationary, electrical goods, ( toaster’s, kettle’s, scale’s, mixer’s ) toy’s and so forth.

It has to be a well measured calculated formula.

Ethnic minority demands have been neglected by mainstream retailers in the UK for a long time.A recent study found that only religious identity was capable to explain the use of ethnic shops in a sense that consumers who strongly identified with their religious group are more likely to use ethnic shops instead of mainstream retailers than their less religious counterparts.

CompetitionAlthough so far no chain has been able to fully exploit this sector.Like’s of Tesco’s, Asda’s and other hypermarket’s have been trying since 2006 onwards to cater for the ethnic minorities. Year on Year we are seeing their shelves’ packed with more and more line’s. More recently we have seen the halal meat & poultry packages appearing in their chiller’s.

However a recent survey conducted by the Muslim association a few years ago stated that the majority of the UK Muslim’s did not feel comfortable buying their meat & poultry from their supermarket rather want to see their meat being cut infront of their eye’s from their local door step butcher.

However there is a trend appearing from the new generation that are slowly growing in number that are acquiring their needs from the supermarket’s. We can still predict that there is along way to go before the supermarket’s will be able to persuade the majority Muslim consumer.

CompetitionThen we have the likes of minority Asian symbol brands, likes of Pak Foods, Sharif & Sons, Mullaco and a few more.

Whom are small in number and seem happy with their geographical location’s. They are not geared nor have the imagination or tools ( Finance, vision, creation ) to expand on a grand scale through out the towns of the UK.

Then we see the smaller corner store’s, likes of polish, Arab and Asian store’s. Their expectation is to grow into the likes of Pak foods, or they quickly get snapped up by the likes of the other symbol groups to grow.

CompetitionAssessing the above I strongly feel there is room for a new player in the market, a model built on some of the core fundamental elements catering for their communities, resulting in concrete benchmarks to be rolled out efficiently and rapidly across the UK.

Creating a multi-channel strategy may be part of the solution.

Although numerous certificates are on the market to overcome the trust gap. Of these certificates HMC (Halal Monitoring Committee) is the most trusted and especially younger consumers look for it. Yet, almost all consumers reported that personal trust to the (Muslim) retailers is the most important shop selection criterion, for religious (halal) grocery shopping.

Population / LocationBangladeshi LONDON - 222,127 (2.7

%)MANCHESTER - 6,437 (1.3%)BİRMİNGHAM - 32,532 (3.0%)METROPOLITAN BOROUGH OF OLDHAM - 16,310 (7.3%)LUTON - 13,606 (6.7%)SANDWELL - 6,588 (2.1%)BRADFORD - 9,863 (1.9%)WALSALL - 5,194 (1.9%)

Population / LocationIndian LONDON - 542,857 (6.6%)

BİRMİNGHAM - 64,621 (6.0%)CARDIFF - 7,886 (2.3%)DERBY - 10,907 (4.4%) [6]GLASGOW - 8,640 (1.5%)[7]EDINBURGH - 6,470 (1.4%)[8]LEICESTER - 93,335 (28.3%)NOTTINGHAM - 17,105 (2.4%)[5]WOLVERHAMPTON - 32,1662 (12.9%)PRESTON - 32,162 (10.3%)SANDWELL 31,400 - (10.2%)

Population / LocationPakistani

OLDHAM - 22,686 (10.1%)KIRKLEES - 41,802 (9.9%)NOTTINGHAM - 26,771 (5.5%)SHEFFIELD - 21,990 (4.0%)DERBY - 14,620 (5.9%) [6]LEEDS - 7,536 (2.11%) [4]

LONDON - 223,797 (2.7%) SEE PAKISTANI COMMUNITY OF LONDON)MANCHESTER - 42,904 (8.5%)BİRMİNGHAM - 144,627 (13.5%)GLASGOW - 22,405 (3.9%)BRADFORD - 106,614 (20.4%)PENDLE - 15,320 (17.1%)SLOUGH - 24,869 (17.7%)LUTON - 29,353 (14.4%)ROCHDALE - 22,265 (10.5%)

Population / locationBlack British GREATER LONDON - 1,0

88,600 (13.3%)BİRMİNGHAM - 96,400 (8.9%)MANCHESTER - 43,500 (8.6%)NOTTINGHAM - 37,900 (7.3%)LEICESTER - 20,600 (6.3%)BRISTOL - 25,700 (6.0%)SHEFFIELD - 20,100 (3.6%)LEEDS - 25,900 (3.4%)

Population / LocationChinese London - 124,250 (1.5%)Manchester - 13,500 (2.7%)Birmingham - 12,700 (1.2%)Liverpool - 7,978 (1.7%)Edinburgh - 8,076 (1.7%)[8]Glasgow - 10,689 (1.8%)[9]

Cambridge - 4,450 (3.5%)Oxford - 3,600 (2.3%)Sheffield - 7,400 (1.3%)Newcastle upon Tyne - 6,040 (2.2%)Nottingham - 8,930 (2.0%) [5]Exeter - 1,998 (1.7%)

Arab’sNational Association of British Arabs estimates that there are around 566,769 first and second generation British Arabs.

Somalia 120,484Iraq 90,426Egypt 48,927Saudi Arabia 49,076Morocco 32,019

Majority in London, many are businessmen, recent immigrants or student’s.

There is also a good percentage of Yemini Arabs in Cardiff and Newcastle upon tyne.

BangladeshiPakistaniIndianPolishChineseAfro..There is great potential for a new unique model to be created in order to be able to cater for these communities.

MarketUK retail sales were approximately £265 billion in 2007, which is larger than the combined economies of Denmark and Portugal.2011 UK retail market was 15% ( 312bn )

Ethnic minorities have tremendous buying power and often have choices about whom they buy their products and services from.

Ethnic minority a force in the UK23% of Britain’s doctors, 50% of pharmacists, 13% of travel agents,13% of service industry managers, 24% of restaurant staff and 27% of London Underground staff were of ethnic minority origin.

In 2003, a report by the Institute of Practitioners in Advertising (IPA) on ethnic diversity in the UK, disclosed the combined disposable income of ethnic minorities as an estimated £32bn.

Ethnic minority a force in the UKSpending power of the UK’s ethnic minority communities was estimated at £300 billion in 2010.In 2001, Muslims in the UK had an estimated spending power of £20.5 billion

Halal market at around £1.5 bn, with extensive market potential.

DemandFrom the above we see there is huge scope and demand in catering for the12m (14%) ethnic figure.Unfortunately the hypermarkets have failed and the message coming out from the ethnical minorities is load and clear “ mainstream retail is unappealing.

The mainstream supermarkets don’t sell the fresh food products that there smaller counterparts are selling. “They stock just the popular products.”

DemandEthnic minorities are saying that the high street is failing in becoming more diverse and in attracting a broader range of shopper.

Other Countries in Europe and America have also tried to fill this gap by launching new concepts to integrate within their existing bigger model’s.

Fortunately for ethnic supermarkets, conditions are only expected to get better for the industry over the next five years. As the Asian and Hispanic populations continue to grow domestically and disposable income improves in line with the economy, demand for cultural foods will increase further.

Canada’s SobeyCanada’s Sobeys Inc. recently launched Chalo! (Meaning "let’s go) FreshCo, its first South Asian-focused discount grocery store, in Brampton, Ontario."Chalo! FreshCo is a significant and unique addition to our company’s food retailing lineup," noted Rob Adams, general manager, discount format at Stellarton, Nova Scotia-based Sobeys.

“This store caters to the South Asian market while also driving our mission to inspire Canadians to discover new foods, products and recipes, and to help them Eat Better, Feel Better and Do Better."

A wholly owned subsidiary of Empire Co. Ltd.,

Sobeys owns or franchises about 1,500 stores in all 10 Canadian provinces under the retail banners Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods and Lawton’s Drug Stores, as well as 350-plus retail fuel locations.

Sobeys and its franchise affiliates employ more than 125,000 associates.

The modelA Ethnic / Asian Supermarket that will stock product’s imported from Multiple countries from East, South and South East Asia. Localized for each ethnic community, factors such as taste, range, promotional activity and price.Spices and Ingredients well-suited for ethnic and Asian cuisines normally not found in Western Supermarkets.Store will range from small to large big box and will cater specifically to one or a wide ethnic group.

The ethnic sector, is only expected to get better.As the populations continue to grow domestically and disposable income improves in line with the economy, demand for cultural foods will increase further.

Mechanics to make us apartIn store cheese, health professionals to offer advice / guidance on the products we carry, from food taste’s, food ratings, classes, along with tips for cooking.Special Events hosted for food and wellbeing events by fresh ways supplier's to demonstrate their product's.In store Fresh ways kitchen to prepare food in front of customer’s, featuring noodle dishes, stone oven baked pizza’s, hot roast lamb ribs, steaks and freshly made Green, Pink, Arabic and traditional tea, coffee and smoothies. Stone oven-baked pizza, hot roast Steak dinners.Natural and Wellbeing departments offering than 4,000 products to support health, energy and diet goals, including organic, sugar-free and gluten-free options; vitamin supplements; and natural health care products.A larger produce department that carries ready-to-eat, store-made cut fruit and salad items, pre-cut vegetables, a wide variety of organic and local produce.

Premium meat and seafood departments with butchers who will custom cut meat for any occasion, and a big selection of value-added meat and seafood preparations that are ready to cook; Humane HMC certified beef, chicken, and fish products.

Along with weekly and monthly specials, Fresh ways will offer everyday low prices on such essentials as butter, chicken, eggs, milk and potatoes, and food choices such as almond milk, bananas and organic eggs.

Freshways loyalty Club Points on more than 3,000 products, and to also introduce more than 300 private label items.

Innovating Grocery Russian inventor Semenov Dahir Kurmanbievich has filed a patent application for drive through supermarkets to make shopping convenient and fast.Many companies have stepped up to make products more easily available, even at the touch of a button. Amazon has added food delivery service to its Prime Now membership, and revealed plans for a 'Dash' button.To purchase from local vendors, customers use the Prime Now app, available on iOS and Android devices.Dash will be set up using the Amazon mobile app to assign the product you want.

Then, the Dash Button will order with a single press. 

Now a Russian inventor has come up with the solution to please everyone, drive through supermarkets where everything you need is on cascading shelves and you never have to get out of a car.

MechanicsCulling brands that don't sell, producing copycat versions of high street lines, offering expensive fare in the form of Belgian chocolates and cod fish acquired from the local market, we can reach a wider audience.Rather than offering a wide range of choice to trolley-stacking weekly shoppers, aim at the little-but-often shoppers.

Just being cheaper will not lead to success, combination of affordability with consistent quality is the formula.

EquationQuality 10% lower than the classical brands but prices 30% lower which then means that the customer gets more value per pound spent.

Mechanics Ryanair ExampleThe art of Ryanair is to take out all the things that are not absolutely required by the passengers, saving costs and passing these on in the form of lower prices to the customer. At the same time because the prices are lower they increase capacity utilisation.

Compromise on the luxuries, modern lighting, state of the art shelving, world class fixtures, iand pass the savings in the form of cheaper prices.

Mechanics DiscountersButchers, fishmongers, fruit & veg., in store bakery ( fresh cakes, bread , croissants ) these are in addition to the dry & chilled goods which is the norm.

Discounters is the way forward."Middle class people go on holiday to Europe, they rent a villa, buy some local groceries and then they find a Lidl and think, gosh this has all the shopping I want but it's half the price of a local convenience store. "They come back to the UK and think, well I was happy enough to buy the stuff when I was on holiday, I'm happy enough to buy the stuff in the UK."

Fact’s85,031 grocery stores in the UK. UK Grocery worth £177.5 billion.Split into four sectors Supermarket Chains.(3,000-25,000 square feet)Convenience Stores. (less than 3,000 square feet)Traditional Retail and Developing Convenience Stores (less than 3,000 square feet, news stands, green-grocers, liquor stores, gas stations)

Alternative Channels: (internet or catalogue home shopping, farmers’ markets, and other produce markets and vending machines.

Food and grocery expenditures account for 51.3 pence in every £1.00 of retail spending (excluding restaurants). 21 pence in every £1.00 spent on food and grocery is spent in convenience stores.

Income Stream Ethnic StoreElements from where income is derived from:

Meat & Poultry 30 -32 %

Fruit & Veg.. 35 %

Dry Goods & Chilled 30 – 33 % ( Spices, Morning Goods, Desserts, Yogurts, General Groceries )Additional Categories can be included :In store BakeryClothingStationaryCuttleryToys

Overheads1. Wages 2. Rent equipment3. Electric4. Rates5. Water6. Telephone7. Maintenance8. Bank Charges

Overheads need to be in parallel to Turnover. I.E. More Sale’s can justify more workers and electric and so forth.The Turnover has to be above 25K plus to accommodate our model and allow good returns.

Supplier's East EndEast End Foods, supplies 80 per cent of independently owned Indian food shops in Britain and most of the supermarket chains. Started in Wolverhampton 40 years ago by the Wouhra family, originally from New Delhi.Located in West Bromwich and a cash-and-carry warehouse has recently been opened in the old HP Sauce factory in Aston Cross, Birmingham. 1,500 products lines, has an annual turnover of £180 million and employs more than 300 workers.

East End

Cash

3.4mNet Worth

26.5mAssets

40.7mLiabilities

18.6m

Company posted profits of £4.9 million.The business is one of the few in the UK that produces and processes everything in this country. The site in West Bromwich is about three times the size of Aston’s 120,000sq ft depot and supplies multiples, independent traders and exports to 40 countries worldwide.

Suppliers P. & B. (Foods) Limited

P. & B. (Foods) Limited is an active company incorporated on 27 August 1970 with the registered office located in West Yorkshire. P. & B. (Foods) Limited has been running for 45 Years 9 Months.

P&B Foods is a leading UK and European wholesale supplier of Spices, Lentils, Flour, Rice, Pickles plus much much more and home to the famous Heera, Balah, Parivaar and Rishta brands. We're also agents and distributors of some of the most popular food brands in the South Asian, Caribbean and Chinese markets.

Based in a unique 150,000sqft packing and warehouse facility located smack bang in the middle of the UK, 120 sales and warehouse staff plus our own transport fleet ensure customers both in the UK and across Europe are rarely more than 3 days away from delivery .

SuppliorsYayla KCBSema SaffronGima YadgaarDamasgate Pound WholesaleAytac SOSRegal

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