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Batteries - UK - February 2010

  • The majority of high-end portable gadgets now come with batteries built in (or device-specific power cells). Is there room in the market for removable batteries? If so, what can battery manufacturers do to gain greater recognition from today’s iPhone generation?
  • Battery purchasing is governed by immediate need (irrespective of shop) for 44% of respondents, according to Mintel’s research. Less likely to stock up on cut-price promotional offers, this makes for a profitable target audience. Is there an opportunity for battery brands to assist these consumers in need?
  • Mintel’s research shows 10% of respondents only buy rechargeables, with the greatest appeal amongst older gadget users. How will new innovations help rechargeables grow above and beyond previous market expectations?
  • Mintel’s research found that consumer decision making around battery purchases relied on very few factors – focussing mostly on price and brand. How can manufacturers communicate specialist brands more effectively to grow market values?
  • Although recycling schemes for old batteries are now established, Mintel’s research found that 40% did not know where they can recycle. What can brands do to help drive awareness and encourage more battery users to go green?
  • During the recession, manufacturers focussed increasing amounts of marketing spend on cut price promotions. As the UK returns to growth, will brands be able to move away from this strategy, or are consumers now accustomed to getting more for less? Could this have long term repercussions on the battery sector?

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Table of contents

  1. Issues in the Market

      • Key issues
        • Definition
          • Types of batteries by size
            • Abbreviations
            • Future Opportunities

              • Guiding consumer choice around batteries
                • Redefining the battery
                  • Make a truly green rechargeable battery
                  • Market in Brief

                    • Market down in the recession but holds up relatively well
                      • Figure 1: retail sales performance of dry-cell batteries, by volume and value, 2004-09
                    • Rechargeables and zinc carbons grow in popularity at the expense of alkalines
                      • Figure 2: Segmentation of the battery market, by type, 2008 and 2009
                    • A market duopoly
                      • Grocery multiples take over half of battery sales
                        • Figure 3: Breakdown UK retail sales (by vale) of batteries, by outlet type, 2008 and 2009
                      • Demand drivers
                        • Consumer ignorance
                          • Distress vs. planned purchases
                          • Internal Market Environment

                            • Key points
                              • The Christmas effect
                                • Figure 4: Typical quarterly battery sales
                              • The Batteries Directive
                                • Figure 5: Trends in lifestyle statements on social/political/ethical and environmental issues, 2005-09
                              • Focussing on battery capacity
                                • The Battery Compliance Scheme
                                  • Figure 6: Battery Compliance Schemes (BCSs), 2010
                                • Producer obligations
                                  • Figure 7: Number of registered UK battery producers, January 2010
                                • Rechargeable batteries impacting on disposables
                                  • Choosing the right product
                                    • Figure 8: Statements about new technology that is currently available, October 2009
                                • Broader Market Environment

                                  • Key points
                                    • Recession a double whammy
                                      • Figure 9: GDP, PDI, consumer expenditure and savings, at current prices, 2004-14
                                    • But is the worst now over?
                                      • Figure 10: GDP quarterly % change, 2004-09
                                    • An aging population provides mixed blessings
                                      • Figure 11: Trends in the age structure of the UK population, by gender, 2004-14
                                    • The demand for battery-powered devices continues
                                      • Figure 12: Device ownership summary, October 2008-Nov 2009
                                    • New opportunities
                                      • Rising household numbers a positive for the market
                                        • Figure 13: Total number of UK households and average household size, 2000-16
                                      • Margins being squeezed…
                                        • Figure 14: Input and output prices for battery manufacturers, 1991-2009
                                      • A weakened sterling raises import costs
                                        • Figure 15: Monthly average spot exchange rate, US$ into sterling, 2004-09
                                    • Competitive Context

                                      • Key points
                                        • Competing for the leisure pound
                                          • Figure 16: Consumer expenditure on selected leisure goods and activities, 2004-08
                                        • But some competitive spending can be complementary
                                          • Figure 17: Items taken on out-of-home leisure activities, August 2009
                                        • Alternative sources of power
                                          • Figure 18: Index of domestic electricity prices, 2001 Q1 =100
                                      • Strengths and Weaknesses in the Market

                                          • Strengths
                                            • Weaknesses
                                            • Who’s Innovating?

                                              • Key points
                                                • Panasonic Evoia: A record breaker
                                                  • Duracell counters with a technological reformulation
                                                    • Varta goes down the education route…
                                                      • … as does Duracell
                                                        • Varta offers the V-man
                                                          • Duracell Instant Charger wins award
                                                            • Energizer ZAPs the market
                                                              • Energizer offers the more powerful and longer-lasting rechargeables
                                                                • PowerGenix launches high-energy density, high-cycle life NiZn battery
                                                                • Market Size and Forecast

                                                                  • Key points
                                                                    • Stockpiling impacts on volume sales in 2008…
                                                                      • Figure 19: Volume and value sales of batteries, 2004-09
                                                                    • … but negatively impacts on sales in the first half of 2009
                                                                      • Figure 20: UK consumer retail sales of dry-cell batteries, by volume and value, 2004-09
                                                                    • Sales bounce back in the second half of the year
                                                                      • Figure 21: Purchasing of batteries (including rechargeables) in the last 12 months, 2005-09*
                                                                    • Rechargeables have an effect
                                                                      • Figure 22: Types of batteries bought in the last 12 months (inc. rechargeable), 2009
                                                                    • Average prices firm despite widespread promotional activity
                                                                      • Figure 23: The average price of batteries (pence per battery), 2003-09
                                                                    • Buyers on average spend less
                                                                      • Figure 24: Average spending on batteries per battery buyer, 2005-09*
                                                                    • Stagnating market values forecast
                                                                      • Figure 25: UK consumer retail sales of dry-cell batteries, by volume and value, 2004-14
                                                                  • Segment Performance

                                                                    • Key points
                                                                      • Rechargeables take centre stage...
                                                                        • Figure 26: Volume sales of batteries, by type, 2005-09
                                                                      • … while alkaline take a recession-inspired hit
                                                                        • Figure 27: Value sales of batteries, by type, 2005-09
                                                                      • Zinc carbon: There’s still life in the old dog
                                                                        • Specialists hold their own
                                                                          • Market shifts towards smaller cells
                                                                            • Figure 28: UK retail sales of batteries, by cell size and volume, 2007-09
                                                                        • Market Share

                                                                          • Key points
                                                                            • Duracell and Energizer the market duopolists
                                                                              • Figure 29: Estimated market shares in the battery market (% of value sales), 2009
                                                                            • Smaller manufacturers struggle
                                                                              • The rise and fall of own-label
                                                                              • Companies and Products

                                                                                • Multiple sub-brand strategy
                                                                                  • Duracell UK
                                                                                    • Figure 30: Examples of the main Duracell batteries on the UK market, January 2009
                                                                                  • Energizer Ltd
                                                                                    • Panasonic
                                                                                      • Figure 31: Examples of Panasonic batteries in the UK, January 2009
                                                                                    • Spectrum Brands
                                                                                      • Uniross
                                                                                        • GP Batteries International
                                                                                          • Others
                                                                                          • Brand Communication and Promotion

                                                                                            • Key points
                                                                                              • Advertising spend declines sharply in 2009
                                                                                                • Figure 32: Advertising spend by battery advertisers according to media type, January 2007-December 2009
                                                                                              • Advertising duopoly
                                                                                                • Figure 33: Top 20 spending battery advertisers, January 2007-December 2009
                                                                                              • Advertising expenditure consolidates around high-performance brands
                                                                                                • Figure 34: Top 20 spending battery brands, January 2007-December 2009
                                                                                              • Advertising and promotional expenditure focused around Christmas
                                                                                              • Channels to Market

                                                                                                • Key points
                                                                                                  • Grocery multiples control over half the market and are gaining share
                                                                                                    • Figure 35: UK retail sales of batteries, by outlet type, 2008-09
                                                                                                  • DIY stores gain ground among non-grocers
                                                                                                    • The High Street loses out
                                                                                                      • Can online build its market share?
                                                                                                      • Where Consumers Use Their Batteries

                                                                                                        • Key points
                                                                                                          • Appliances drive sales
                                                                                                            • Figure 36: Types of battery-powered gadgets consumers own and have bought batteries for in the last 12 months, December 2009
                                                                                                          • Household appliances and peripherals the key drivers
                                                                                                            • Figure 37: Types of battery-powered gadgets consumers own and have bought batteries for in the last 12 months (group nets), December 2009
                                                                                                          • It’s a mature and mainly working class market….
                                                                                                            • Figure 38: Adults who own a device and buy batteries, by age and household income, December 2009
                                                                                                          • The influence of children is important, however
                                                                                                            • Figure 39: Adults who own a device and buy batteries, by the presence and age of children in the home, December 2009
                                                                                                        • Battery Buying Motivations

                                                                                                          • Key points
                                                                                                            • Immediate need or planned purchase?
                                                                                                              • Figure 40: Ways in which consumers buy batteries, December 2009
                                                                                                            • Those with time on their hands buy on need
                                                                                                              • Figure 41: Tendency to buy batteries when needed, irrespective of shop, by age and working class*, December 2009
                                                                                                            • The time-starved plan their purchases
                                                                                                              • Figure 42: Tendency to buy batteries at a supermarket, by demographics, December 2009
                                                                                                            • Rechargeable batteries capture 10% of the market
                                                                                                              • Figure 43: Attitudes towards rechargeable batteries by the types of battery-powered gadgets adults own and have bought batteries for in the last 12 months, december 2009
                                                                                                          • What Consumers Look for in a Battery

                                                                                                            • Key points
                                                                                                              • Trust a prime sales influence…
                                                                                                                • Figure 44: Factors that influence consumers when buying certain types of batteries, December 2009
                                                                                                              • Brand and performance linked
                                                                                                                • Cheap price and branding the strongest purchasing drivers
                                                                                                                  • Figure 45: Average number of factors used to make battery purchase decisions by factor chosen, December 2009
                                                                                                                • Almost half of consumers base their buying decisions on only two factors
                                                                                                                  • Figure 46: Repertoire of factors influencing consumers to buy certain types of batteries, December 2009
                                                                                                                • Supermarket shoppers have simpler choices
                                                                                                                  • Figure 47: Average number of factors used to make battery purchase decisions, by preferred outlet, December 2009
                                                                                                                • Buyer target groups
                                                                                                                  • Figure 48: Factors that influence consumers when buying certain types of batteries (groups netted), December 2009
                                                                                                                  • Figure 49: Where consumers buy batteries, by factors that influence consumers when buying certain types of batteries (groups netted), December 2009
                                                                                                              • General Attitudes Towards Batteries

                                                                                                                • Key points
                                                                                                                  • Consumers still need education regarding recycling
                                                                                                                    • Figure 50: Attitudes towards battery recycling, December 2009
                                                                                                                  • Young the least knowledgeable
                                                                                                                    • Consumers still unsure about comparative performance and suitability...
                                                                                                                      • Figure 51: Attitudes towards batteries, December 2009
                                                                                                                    • Brand differentiation remains strong...
                                                                                                                      • Figure 52: Attitudes towards batteries, December 2009
                                                                                                                    • Internal batteries take 15% of the market away
                                                                                                                    • Battery Buying Target Groups and Opportunities

                                                                                                                      • Key points
                                                                                                                        • Over half of consumers are confused
                                                                                                                          • Figure 53: Battery attitudinal target groups, December 2009
                                                                                                                        • Although there are experts and those keen on recycling
                                                                                                                          • Aficionados make the most complex choices
                                                                                                                            • Figure 54: Factors influencing buying of certain types of batteries, by target groups, December 2009
                                                                                                                        • Appendix – Where Consumers Use Their Batteries

                                                                                                                            • Figure 55: Most popular types of battery-powered gadgets consumers own and have bought batteries for in the last 12 months, by demographics, December 2009
                                                                                                                            • Figure 56: Next most popular types of battery-powered gadgets consumers own and have bought batteries for in the last 12 months, by demographics, December 2009
                                                                                                                            • Figure 57: Other types of battery-powered gadgets consumers own and have bought batteries for in the last 12 months, by demographics, December 2009
                                                                                                                            • Figure 58: Types of battery-powered gadgets consumers own and have bought batteries for in the last 12 months (group nets), by demographics, December 2009
                                                                                                                        • Appendix – Battery Buying Motivations

                                                                                                                            • Figure 59: Ways in which consumers buy batteries, by demographics, December 2009
                                                                                                                            • Figure 60: Ways in which consumers buy batteries (netted groups), by demographics, December 2009
                                                                                                                        • Appendix – What Consumers Look for in a Battery

                                                                                                                            • Figure 61: Most popular factors that influence consumers when buying certain types of batteries, by demographics, December 2009
                                                                                                                            • Figure 62: Next most popular factors that influence consumers when buying certain types of batteries, by demographics, December 2009
                                                                                                                        • Appendix – General Attitudes Towards Batteries

                                                                                                                            • Figure 63: Most popular attitudes towards batteries, by demographics, December 2009
                                                                                                                            • Figure 64: Next most popular attitudes towards batteries, by demographics, December 2009
                                                                                                                        • Appendix – Battery Buying Target Groups and Opportunities

                                                                                                                            • Figure 65: Target groups, by demographics, December 2009
                                                                                                                        • Appendix – Examples of Leading Battery Brands

                                                                                                                            • Figure 66: Examples of leading battery brands, by type of 9V, AA and AAA batteries supplied, January 2009
                                                                                                                            • Figure 67: Examples of leading battery brands, by type of C-Cell, D-Cell and Coin Cell batteries supplied, January 2009

                                                                                                                        Companies Covered

                                                                                                                        • Aldi Stores Ltd (UK & Ireland)
                                                                                                                        • Argos
                                                                                                                        • Asda Group Ltd
                                                                                                                        • Bank of England
                                                                                                                        • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                        • Co-operative Group
                                                                                                                        • Duracell UK
                                                                                                                        • Energizer Holdings, Inc.
                                                                                                                        • Google UK
                                                                                                                        • Government Actuary's Department (GAD)
                                                                                                                        • J. Sainsbury
                                                                                                                        • Lidl (UK)
                                                                                                                        • Marks & Spencer
                                                                                                                        • Multibrands International Ltd
                                                                                                                        • Nokia Corporation (UK)
                                                                                                                        • Panasonic
                                                                                                                        • Procter & Gamble UK & Ireland
                                                                                                                        • Rayovac UK
                                                                                                                        • Research in Motion Uk Ltd.
                                                                                                                        • Sanyo Europe Limited
                                                                                                                        • T-Mobile (UK) Ltd
                                                                                                                        • Tesco Plc
                                                                                                                        • Uniross
                                                                                                                        • Varta Batteries
                                                                                                                        • Virgin Media Ltd
                                                                                                                        • Virgin Mobile
                                                                                                                        • Vodafone Group Plc (UK)
                                                                                                                        • Waitrose
                                                                                                                        • Wm Morrison Supermarkets

                                                                                                                        Batteries - UK - February 2010

                                                                                                                        £1,995.00 (Excl.Tax)