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Batteries - UK - February 2010
Market Size and Forecast
Key points

The battery market has come through the recession in reasonable shape. While volume and value sales have fallen, the declines have been relatively modest.

The stockpiling of batteries sold in promotions has helped support volume sales while a shift in demand towards more expensive high powered and rechargeable batteries have supported unit prices.
Stockpiling impacts on volume sales in 2008…
FIGURE 19: Volume and value sales of batteries,

SOURCE:

2004-09

Mintel

Volume sales of batteries held up reasonably well in 2008 and 2009, despite the recession. As more adults stayed at home in order to save money, so activities requiring batteries – like watching TV and playing in-home computer games – rose in importance.

Volume sales in 2008 were little changed on those for 2007 because of the stockpiling phenomenon.
Many consumers appeared to stockpile large packs of batteries in 2008 when promotions were at their height. ●
Manufacturers introduced attractive deals as the UK went into recession. According to trade research, this resulted in the average number of batteries purchased per pack rising in 2008 from 4.5 to 4.7: consumers, while buying fewer packs, were buying packs with more batteries. At the same time, the average price per pack remained largely unchanged between 2007 and 2008, indicating that the additional purchases were mainly free to the consumer.


… but negatively impacts on sales in the first half of 2009
This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
1

FIGURE 20:

UK consumer retail sales of dry-cell batteries, by volume and value, 2004-09
Volume
Million batteries 2004
2005
2006
2007
2008
2009

Index

Value at current prices
£m

584
596
620
615
611
584

100
102
106
105
105
100

415
413
410
402
389
370

Index

Value at
2009
prices
£m

Index

112
112
111
109
105
100

450
445
436
418
391
370

122
120
118
113
106
100

SOURCE: Mintel

In 2009, the impact of the accumulation of battery stocks in 2008 was strongly felt in the first half of the year. Consumers were relying heavily on their accumulated stocks to meet their needs for new batteries: the running down of these stocks resulted in less demand in the market, causing the market to dip relatively strongly in the first half of 2009 compared with the same period in 2008.


Key analysis: This change in 2009 was in part inspired by a change in manufacturer tactics. In
2009, the average numbers of batteries purchased per pack fell back to the 2007 level (4.5) suggesting that promotions based on free batteries were running out. However, the average price per pack fell in 2009 (even after making allowances for the VAT reduction) compared with
2008, indicating that price cuts rather than free offers began to influence the market.
Sales bounce back in the second half of the year
FIGURE 21: Purchasing of batteries (including rechargeables) in the last 12 months, 2005-09*
2005

2006

2007

2008

2009

% of adult population purchasing batteries**
Adult population 15+ (m)

78.8

82.6

77.2

76.8

74.8

49.44

49.85

50.25

50.64

51.00

Number of buyers of batteries (m)

38.96

41.18

40.05

38.89

38.15

Av number of batteries purchased per buyer
(units)

15.3

15.1

15.4

15.7

15.3

* the TGI data run from mid year to mid year, while the volume purchase data are based on calendar year
** taken from the TGI survey of around 25,000 adults. Please note the rest of the data in this table is Mintel’s own calculations
Taken from the TGI survey of around 25,000 adults
SOURCE: GB TGI, Q4 Kantar Media UK Ltd 2005-09 (Jul-Jun) and Q2 2008 (Jan-Dec)/Mintel
This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
2

The change in manufacturer tactics seems to have helped volume sales recover relatively strongly in the second half of 2009. The stockpiles seem to have become low by the second half of the year and the worst effects of the recession on buying battery-powered devices also started to unwind. The average number of batteries purchased in 2009 fell compared to 2008, but only by 3%.
Rechargeables have an effect
FIGURE 22: Types of batteries bought in the last 12 months (inc. rechargeable), 2009
Base: adults aged 15+
%
Standard
Rechargeable
Specialist batteries (eg watch/camera)

63.9
23.2
22.4

Taken from the TGI survey of around 25,000 adults
SOURCE: GB TGI, Q4 Kantar Media UK Ltd 2009 (Jul-Jun)/Mintel
The growing popularity of rechargeables has also contributed to the decline in volume sales in 2009. Buying a rechargeable battery can negate the need to buy multiple non-rechargeables during the year and has a particularly negative effect on the sales of alkaline batteries.
Alkaline batteries have been especially hit because they represent the bulk of the market and zinc batteries tend to be purchased by consumers on lower incomes who may be deterred from buying rechargeable batteries by their initial cost and the need to buy a charger.
For more information, please refer to the Segment Performance section of this report.
Average prices firm despite widespread promotional activity
FIGURE 23: The average price of batteries (pence per battery), 2003-09

SOURCE: Mintel


Promotion is not talked about within the battery trade but around one third of all batteries sold in 2009

This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
3

were on promotion. Because of this value sales of batteries – on a like-for-like basis – have been held down, with the average price of batteries sold falling by 2.4% in 2009, due in part to manufacturers’ sales tactics.
Buyers on average spend less
FIGURE 24: Average spending

on batteries per battery buyer, 2005-09*

2005

2006

2007

2008

2009

% of adult population purchasing batteries**
Adult population (m)

78.8

82.6

77.2

76.8

74.8

49.44

49.85

50.25

50.64

51.00

Number of buyers of batteries (m)

38.96

41.18

40.05

38.89

38.15

10.0

10.0

10.0

9.7

10.8

10.6

10.2

9.7

Average spending per buyer 10.6
(£) current prices
Average spending per buyer 11.7
(£) constant 2009 prices

* The TGI data runs from mid year to mid year, while the volume purchase data in calendar year
** Taken from the TGI survey of around 25,000 adults. Please note the rest of the data in this table is Mintel’s own calculations.
Taken from the TGI survey of around 25,000 adults
SOURCE: GB TGI, Q4 KANTAR MEDIA UK LTD 2005-09 (Jul-Jun)/Mintel
Because of the VAT and price changes from manufacturers, the average spending on batteries per buyer fell by 3% in 2009 but would have remained largely unchanged had VAT not decreased.
Stagnating market values forecast
FIGURE 25: UK consumer retail sales of dry-cell batteries, by volume and value, 2004-14
Volume
Million batteries 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

(fore)
(fore)
(fore)
(fore)
(fore)

Index

Value at current prices
£m

584
596
620
615
611
584
584
590
604
623
639

100
102
106
105
105
100
100
101
103
107
109

415
413
410
402
389
370
368
365
360
376
380

Index

Value at
2009
prices
£m

Index

112
112
111
109
105
100
99
99
97
102
103

450
445
436
418
391
370
365
362
357
370
371

122
120
118
113
106
100
99
98
97
100
100

This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
4

SOURCE: Mintel

Market volumes are expected to grow between 2009 and 2014. This is partly due to rising population levels and the growth in one-person households, which will create increased demand for batteries in household items such as smoke alarms and clocks (and the fact everyday household items are likely to continue to relying on removable batteries, rather than built in ones). However, volume growth is unlikely to lead to a corresponding increase in market values. Instead Mintel predict that the battery sector will only be able to maintain market values by selling more, for less.

Research for this report has shown battery manufacturers are innovating. However, in a highly competitive market it’s very likely that these will be copied quickly by cheaper rivals. Rather than pushing values higher, new products will only serve to prop up existing values. Heavy promotional activity centred on price over the downturn will also be a factor going forwards - these have shifted perceptions around the value of more premium cells. Having grown accustomed to more for less, manufacturers will face an uphill struggle convincing consumers otherwise.


Key analysis: Removable batteries will remain relevant for many years to come. Despite the increasing number of consumer electronic products that come with integrated batteries, household products such as clocks will continue to require removable cells. The increasing need for power on the move will also ensure that products that can reinforce internal batteries will also be relevant to tech users. However, the commoditised nature of the sector will prevent greater value growth - indeed, new innovations such as the myGrid charge mat (discussed in the
Where Consumers Use Their Batteries section) are only likely to stem further value decline.

Batteries - UK - February 2010
Segment Performance
Key points

The battery market can be broadly sub-divided into four segments: zinc carbon; alkaline/manganese; speciality; and secondary or rechargeable cells.

Alkaline cells dominate the market both in terms of volume and value sales, having overtaken zinc carbon as the mass-market cell during the past two or three decades.

However, in 2009 the older zinc carbon batteries staged a strong recovery in sales and these low cost batteries found favour with cash-strapped consumers.

Increasingly, secondary or rechargeable cells are capturing a larger share of volume and value sales, with the consumer’s desire for value and environmental concerns being the major growth drivers. While costing more than an alkaline battery, a rechargeable battery is more cost effective over its lifetime than a single use one.

This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
5

Rechargeables take centre stage...
FIGURE 26: Volume sales of batteries,

by type, 2005-09

2005

2006

2007

2008

2009

m

m

m

m

m

Change
2005-09
%

Alkaline
Zinc carbon
Recharge cells
Specialist/othe
r

492
80
9
16

516
76
11
16

517
69
13
16

512
65
14
20

481
69
14
20

-2
-14
+56
+25

Total

596

620

615

611

584

%

%

%

%

%

% point

Alkaline
Zinc carbon
Recharge cells
Specialist/othe
r

82.5
13.4
1.5
2.6

83.2
12.3
1.8
2.6

84.0
11.2
2.1
2.7

83.8
10.6
2.3
3.3

82.3
11.8
2.4
3.4

-12
+60
+30

Total

100.0

100.0

100.0

100.0

100.0

-

SOURCE: Mintel

Rechargeables are enjoying very rapid growth and are the star performers of the battery market. They remain a small segment of the market but a rapidly growing one. By 2009, they accounted for 2.4% of market volume sales, with growth of around 56% since 2005.
Perhaps counter-intuitively these expensive batteries have benefited from the recession as cash-strapped consumers have realised that they can save money by buying a rechargeable battery: according to trade research, it is estimated that buying a pack of rechargeable batteries – depending on which alkaline battery you compare it to – could save a consumer more than £2,000 over the lifespan of the batteries.
Cost savings rather the environmental benefits have been the main spur to sales growth in the past two years, although environmental factors continue to impact on sales and the Batteries Directive may also have encouraged sales among the most green of consumers.

This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
6

… while alkaline take a recession-inspired hit
FIGURE 27: Value sales of batteries, by type, 2005-09
2005

2006

2007

2008

2009

£m

£m

£m

£m

£m

Change
2005-09
%

Alkaline
Zinc carbon
Recharge cells
Specialist/othe
r

326
35
17
34

324
32
22
32

317
28
25
32

307
24
27
31

291
21
27
30

-12
-40
+59
-13

Total

413

410

402

389

370

%

%

%

%

%

% point

Alkaline
Zinc carbon
Recharge cells
Specialist/othe
r

79.0
8.6
4.1
8.3

79.1
7.8
5.3
7.9

78.9
7.0
6.1
8.0

79.0
6.1
6.9
8.0

78.8
5.7
7.4
8.1

-34
+80
-

Total

100.0

100.0

100.0

100.0

100.0

SOURCE: Mintel

Alkaline batteries are the largest segment of the market, accounting for 79% of value sales.
Alkaline sales have been badly hit by the recession in 2009. They have effectively been caught between the low cost of zinc carbon batteries and the long-term cost effectiveness of rechargeables. Consumers have deserted these batteries at the bottom end (to zinc carbon) and the top end (to rechargeables).
Promotions and stockpiling has been widespread in this segment of the market. This helped maintain volume sales in 2008 – sales down by just 1% – but failed to generate volume sales in 2009 – down 6%. The alkaline batteries have been the hardest hit by the rising popularity of rechargeables.
Value sales of alkaline batteries held up better in 2009 compared with volume sales reflecting the shift in this market towards more expensive high power batteries and away from standard batteries.
Zinc carbon: There’s still life in the old dog
Zinc carbon batteries have had something of a renaissance in 2009 with volume sales rising. Supermarkets have help support value sales by introducing cheaper own-label zinc carbon ranges to compete with the pound stores. Pound stores have also introduced “mega” value packs of 24-packs of AA zinc carbon, which have generated sales from less affluent consumers and from consumers using low drain devices.
The 2009 fall in value sales of 10% was less severe than the fall of 14% seen in 2008, when the stockpiling of alkaline batteries on promotion hit the volume sales of these cheaper batteries hard.
Specialists hold their own
This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
7

Specialist batteries encompass a wide range of products but one segment of this market has seen very strong sales, albeit from a relatively low base. The button cells/lithium group of products have experienced volume sales growth of 17% and value growth of 9% in 2009.
Growth has been spurred by the activities of discounters and pound stores, which have been offering product packs featuring 36 different sized cell batteries on a card for £1.
It has also been reported in the press that the shift by sex toy manufactures from AAs to button cells in their products has also stimulated demand.
Market shifts towards smaller cells
FIGURE 28: UK retail sales of batteries, by cell size and volume, 2007-09
2007

2008

2009

Growth
2007-09

m

%

m

%

m

%

AA
AAA
C
D
9V
Other

373
160
31
22
17
12

61
26
5
4
3
2

374
156
31
19
16
15

61
26
5
3
3
2

368
143
25
18
15
15

63
24
4
3
3
2

-1.2
-10.9
-19.1
-19.1
-9.6
20.7

Total

615

100

611

100

584

100

-5.0

SOURCE: Mintel

With consumer electronic products increasingly being miniaturised, it is perhaps no surprise that the market for batteries is shifting towards ever-smaller cells.
Not tabulated above, the AAA battery grew its share of the market between 2003 and 2008 benefiting from the launch of smaller, slimmer, consumer electronic devices. However, it lost share in 2009, possibly because of the growth in other cells typified by smaller button units outlined above.

This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
8

Batteries - UK - February 2010
Market Share
Key points

Duracell and Energizer are the clear market leaders, with Duracell the overall leader and Energizer the number-one rechargeable brand

Other brands tend to play a niche role, while own-label accounts for around one in seven batteries sold.

Own-label’s share has declined in 2009 as major brands have launched attractive promotional deals.
Duracell and Energizer the market duopolists
FIGURE 29: Estimated market shares in the battery

market (% of value sales),

2009

SOURCE: Mintel

The battery market is led by two powerful players/brands: Duracell and Energizer. Both companies are strong in the grocery multiple, high street and DIY channels, with each selling to the major retailers, although the two major players each have slightly different market strengths. ●
Duracell is the leader of the general-purpose market, excluding rechargeables, while
Energizer lags some way behind: Duracell is the clearly the UK’s No1 alkaline battery brand.

However, Duracell is weaker in the rechargeable sector compared to Energizer, which is the number-one rechargeables manufacturer in the UK.

The third largest player in the market, Panasonic, is stronger outside the grocery multiple, high street and DIY channels – and is particularly strong in the CTN/convenience sector. ●

This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
9

Smaller manufacturers struggle

Smaller manufacturers have typically found life difficult in a market where brand

awareness and distribution are both important. All tend to focus on particular segments:
Uniross – rechargeable; Philips and Sanyo – electrical retailers; Rayovac, Varta and GP (Gold
Peak) – speciality batteries.
The rise and fall of own-label
Up until 2009, own-label batteries were making up a growing proportion of batteries sold, with their cost advantage compared to branded lines their main advantage – especially in the alkaline market.
However, in 2009 the trade reported that sales of own-label batteries had fallen sharply, by as much as 14% in value terms. Own-label’s value sales are now around 12-13% compared to
15% in 2008.
Own-label products are offered by many of the major grocery multiples as well as some major high street chains such as Wilkinson. Some own-label brands such as Tesco are understood to be doing better than others.
A key reason for the decline in own-label in 2009 is the number of promotions being run by the major brands. Promotions such as buy four, get four free have been used in 2009 by both
Panasonic (Xtreme Power alkaline) and Duracell.

This report is supplied in accordance with Mintel's terms and conditions. Supplied to Thames Valley University.
© Mintel International Group Limited.
10

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