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Coronavirus concerns drive unprecedented UK volumes

31 Mar 2020 / By: Malcolm Pinkerton

Kantar’s latest grocery market figures show year-on-year UK supermarket sales grew by the fastest rate in over a decade during the past 12 weeks – increasing by 7.6%. March was the biggest month of grocery sales ever recorded, with sales soaring 20.6% year-on-year.

This was driven by people shopping more frequently and buying slightly more on each trip, with the average household spending an extra GBP62.92 over the four weeks, equivalent to adding five days-worth of groceries. Shoppers in London, where the outbreak is reported to be a few weeks ahead of other regions, increased spending the most, up by 26% during the month.

UK grocers see remarkable sales growth

Between Monday 16 and Thursday 19 March, 88% of households visited a grocer, making five trips on average – adding up to 42 million extra shopping trips across four days. All 10 of the largest retailers enjoyed growth in the past 12 weeks for the first time since October 2018. Lidl enjoyed significant growth, with sales rising 17.6% in the review period and increasing market share by 0.5pp to 6.1%. Aldi achieved a new record high market share of 8.2%, growing sales by 11.0%.

Meanwhile, independent retailers and symbols, which includes Spar, Nisa, Premier, Londis and Costcutter, provided welcome access to groceries close to home, and sales rose collectively by 16.1% this period. Collectively, smaller branches of the major retailers and independently-owned outlets increased share of spend to 13.3%, growing sales by 30% YoY.

Sainsbury’s was the fastest-growing of the traditional big four this period (+7.4%), followed by Tesco at 5.5%, Asda at 4.9% and Morrisons at 4.6%. Iceland benefited from shoppers stocking up on frozen items, with sales up by 11.7%. Cooperative Group sales gained 9.4%, while Waitrose grew sales at the fastest rate since November 2013, up 7.5%.

Consumption trends becoming evident

Given that as of mid-March households are in lockdown, with more mouths to feed and more often, in-home consumption has rocketed. Shoppers have stocked up on essentials, cupboard stables and frozen foods as well as alcohol (+GBP199 million in the last month), to cater for additional meals normally consumed at work, at school or on evenings out. 

However, ongoing movement restrictions and well-stocked cupboards will see shopping trips fall over the coming weeks.

The big beneficiaries will be convenience retail. With people staying close to home and avoiding crowds, shopping locally will increase. Shoppers will make smaller and more frequent trips as they begin to gain more confidence in product availability.

It will not only be the multiples that benefit, with local independent retailers seeing uplifts as people seek items in short-supply and try to avoid long queues at supermarkets limiting entry. Online retailers, despite constraints in delivery capacity, enjoyed significant gains this month, with Ocado welcoming 133,000 new customers.

The pressure on online grocery services was demonstrated by data showing that, although online baskets increased in size, the number of households seeing deliveries was 14.6% versus 13.8% in the corresponding month last year, indicating that actual fulfilment was likely below actual demand.

Kantar’s Point of View:

As shopping habits shift to new channels and formats, brands will need to change assortment and packaging to fit best-performing outlets. This will include SKU simplification and introducing new pack-sizes to cater for bulk buying. It will also mean redesigning products to better fit in-home consumption, with food parcels and meal-kits to replace restaurant experiences.

Prepare for the shift in online shopping habits, where newly acquired online grocery shoppers will realise the benefits and continue the habit post-pandemic, utilising favourites and saved shopping lists, making it harder to influence purchasing behaviour.

Meanwhile, occasional online grocery shoppers will sign up to delivery pass schemes, recognising the benefits of having the weekly shop delivered at a convenient time, diverting spend away from stores. 

Click here to read the full report and learn more about the Kantar Worldpanel offer.

Malcolm Pinkerton

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