Market View: January 2018

Brodick Retailer Grid

The Brodick Retailer Grid plots market share against momentum (the difference between gains and losses, essentially) as a way of showing who is winning and losing, while also getting a sense of the emerging trends. It takes inspiration from Boston Consulting Group's classic market grid.

Grid position offers a perspective on retailers' market outlook:

A: Champion - High market shares and good momentum levels are a formidable combination for these market leaders

B: Contender - Strong momentum is helping these (often new entrant) companies to increase their market shares at a good rate

C: Stalled - Momentum may be negative for these large market players but their portfolio strength gives them a good bass from which to recover losses

D: Vulnerable - Falling market shares may suggest a 'managed decline' strategy or that changes in tactics are required to ward off predators - or even failure.

E: On The Bench - Neutral momentum and low portfolio characterises this group of new entrants just getting started (or those set to exit the market fully).

SPID-based view

In this version,  SPID gains and losses are used to determine market share and momentum.

There are drawbacks to this approach but it is the most common unit for looking at switching activity.

This chart also appears in the latest issue of Water.Retail

(https://read.water-retail.com/water-retail)

Volume-based view

In this version,  volume (as determined by MOSL) is used to determine market share and momentum.

This unit can give a truer reflection of market shares and gains, although the calculation method itself introduced some variability from one period to the next, even without switching.

Combined view

In this version,  SPID gains and losses are the main focus but it combines the volume data. That way, you can see whether gains and losses tend to be more or less significant by either unit. For example, you may consider that the new entrant gains tend to be more marked in volume terms than by SPID, which suggests a higher level of engagement with larger consumers and a certain amount of cherry picking. 

Retailer Mix (Customer Gains)

The charts below show how well each retailer group is doing, as a portion of all sales. 'Incumbents' include companies that bought portfolios before market opening, namely Castle Water and Business Stream. 

New self-supply retailers caused an increase in the self-supply share, by both SPID and volume.

It was a month that saw Marston's and Whitbread take on their portfolios, explaining the big increase in the self-supply share. Of course, self-supply makes more sense to high-end users so one would expect to see a higher share in volume stakes than in SPIDs, perhaps. But it also sounds a cautionary note that the market is perhaps a little slow if just 3 organisations can account for such a large share of the switching. Yes, they are large users but they are not exceptional, other than in that they have chosen this particular model.