[23 July] As creatures of habit, human beings tend to stick to the same things, finding comfort in familiarity. So, in the midst of a pandemic, where nothing is familiar it’s only expected that behaviour is forced to change.
In initial weeks of lockdown, grocery delivery slots were like gold dust, despite retailers increasing capacity massively. The desire for people to undertake fewer grocery shopping trips and concerns about safety led to an upturn in the number of online grocery sales, particularly for those aged 55 and over, accounting for 33% of online shoppers. GlobalWebIndex reinforces this, with 50% of people expecting to shop online more frequently in the future.
Grocery grew by 16.9%
In the 12 weeks to 12 July, Kantar reports take home grocery sales grew by 16.9%, the fastest rate since 1994. Total sales reached £31.6 billion as we ate and drank more at home. The last four weeks have shown signs that shoppers are embracing their freedom and are eating and drinking out once again as supermarket sales decelerated to 14.6%, down from 18.9% in June. Less surprising, Kantar reports that we spent an additional £24 million on tea and coffee in the last four weeks, and £19 million on biscuits. By comparison, items that were stockpiled back in March are now only marginally more popular than last year, with healthcare up 2% and household products up 3%.
Consumers may also be travelling further afield for their weekly shop, with convenience retailers seeing 2.6 million fewer shoppers than at the peak of lockdown in April. Despite this, footfall remains higher than the same period last year.
Financial impact yet to be realised in supermarkets
Over 200,000 people in Northern Ireland were using the Government furlough scheme at the peak of lockdown, approx. 30% of all people in employment. Understandably financial concerns are front of mind for many, with 6 in 10 globally reporting some changes to their job, most commonly paycuts (27%) and reduction in working hours (24%) (GlobalWebIndex). Globally, 80% of people are delaying big purchases, most commonly amongst Gen Z, Millennials and higher income groups (GlobalWebIndex). For smaller purchases, the financial impact is yet to be realised. Branded goods in supermarkets, typically a higher price point, are outperforming own label ranges with Kantar reporting 20% growth. Of the own label ranges, Kantar reports the premium lines including Tesco Finest and Sanisbury’s Taste the Difference are growing fastest as shoppers are looking for ways to treat themselves at home.
Sales volume returns to pre-pandemic levels
Following a slow start to economic recovery (May saw growth of just 1.8%), June’s total retail sales reached similar levels as pre-pandemic, with a fall of just 0.6% compared to February.