Grocery market growth accelerates as retailers and shoppers look to next stage of lockdown

The latest grocery market share figures from Kantar, for the period leading up to 17 May 2020 show: 

  • Take-home grocery sales grew by 14.3% during the past 12 weeks, the fastest rate since 1994.  However, supermarkets will have felt the effect of a reduction in sales of on-the-go meals, snacks and drinks which total £1 billion in normal times 
  • Online grocery sales were 75% higher than a year ago, with nearly one in five households placing an order in the most recent four weeks 
  • There were signs that consumers are taking tentative steps out of lockdown, with a marginal increase in the number of visits to the shop following easing of restrictions on 11 May
  • Thursday 7 May, the day before the VE Bank Holiday, was the biggest shopping day of the month, totalling £488 million, and sales of alcohol were 50% higher than last year over the four weeks

British take-home grocery sales rose by 14.3% during the 12 weeks to 17 May, the fastest rate since comparable records began in 1994, according to the latest figures released by Kantar today. 
 

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “The most recent three-month period now includes both the pre-lockdown rush to the shops in March, and eight weeks of stay-at-home advice from Government – a combination which has resulted in the fastest growth in take-home grocery sales for over 25 years.  While these are bumper figures, it remains true that the overall picture for some grocers will be less positive, as supermarkets continue to feel the impact of a considerable reduction in on-the-go spend on meals, drinks and snacks.  Those categories usually add up to £1 billion* over the course of 12 weeks and they aren’t included in these numbers.”

 

In the latest four weeks to 17 May, take-home grocery sales growth accelerated to 17.2% year on year as the Government announced the first stage of easing lockdown restrictions. Fraser McKevitt comments: “In the most recent four weeks, the trend towards fewer, larger shops that we saw in April broadly continued.  Shoppers visited the supermarket 3.5 times per week on average, meaning 100 million fewer trips overall than the same month last year, and increased their spend each trip to £27.41 – nearly 50% more than they did during normal times.  

“People have been working their way through their store cupboards over the past couple of months and some will now be spending a bit more on each visit to the supermarket to replenish supplies.  The greatest rise in spending has been among families with children over the age of 16 living at home, reaching £618 on average this month compared with £545 last May, as they continue to cater for more people living under one roof and compensate for meals not eaten at work, school or college, or while socialising with friends”.   

 

Some of this spend has been directed online, and shoppers trying to make use of delivery services when they can have increased digital sales by 75%.   Fraser McKevitt comments: “Online shopping now accounts for 11.5% of all grocery sales, gaining more ground and attracting more new shoppers in 2020 than the channel has in the previous five years.  The retailers have done a brilliant job of reacting to a sudden spike in demand by increasing their online capacity, and it’s meant that nearly one in five British households ordered groceries online in the most recent four weeks, 1.6 million more than this time last year.  And it’s not just groceries experiencing a boom – people missing their favourite restaurants and wanting to treat themselves have pushed takeaway deliveries** up by 250% year on year. 

 

“While the gains made by online shopping are unlikely to be sustained at these levels, the crisis has certainly accelerated the move towards online.  The grocers have attracted a new group of customers, in particular older demographics, and we expect some of them may continue using online services and enjoying the convenience that home delivery provides.”

 

Consumers are taking their first tentative steps out of the full lockdown and the number of people visiting bricks-and-mortar shops began to increase ever so slightly in the week leading up to 17 May, following the relaxation of some measures by Government on the previous Sunday.  Shoppers made the most of parks and warm weather to enjoy picnics with their households and socially distanced catch ups with one other person, helping to boost sales of chilled dips by 22%, crisps by 28% and carbonated soft drinks by 25%, during the course of the four weeks. 

 

Thursday 7 May, the day before the Friday Bank Holiday to mark 75 years since VE Day, was the biggest shopping day of the month and £488 million was spent on take-home groceries.  With pubs and restaurants still closed, people made the most of the sunshine at home and sales of frozen confectionery and alcohol were 40% and 50% higher than last year respectively.  Barbecue weather for many may have encouraged shoppers to spend £17 million more on burgers and £24 million more on sausages year on year. 

 

Looking ahead, Fraser McKevitt comments: “Shoppers and retailers are now thinking about what the impact of a less restrictive lockdown will be, and a phased re-opening of non-essential retail and the out-of-home food and drink sector will have a significant impact on grocery sales in the coming months.  However, with plans for reopening the hospitality sector still uncertain, we are currently projecting that extra meals, snacks and drinks consumed at home will mean take-home sales at the grocers could be up 12% over the course of 2020 as a whole.”

 

An update on the grocers
 

All ten major supermarkets and the combined group of independent retailers increased sales in the 12 weeks to 17 May.  However, some of these gains will have been offset by a decline in ‘on-the-go’ purchasing, including breakfasts, lunches and snacks as well as any sales to businesses or schools.

 

Online specialist Ocado saw sales rise by 32.5%, with its market share increasing to a new high of 1.6%, up from 1.3% last year. 

 

Shoppers staying closer to home and avoiding queues at large supermarkets benefited both Co-op, up by 30.8%, and independent retailers, up by 63.1%.  Co-op reached 7.0% market share, a level last achieved in 2011, while the 2.5% of sales taken by independent grocers was last seen in 2009.

 

Iceland climbed to a 2.4% share of the market, a proportion of sales it last held in 2000, as sales increased by 28.6% over the 12 weeks.  Meanwhile, sales at Tesco rose by 12.7%, Sainsbury’s by 12.5%, Asda by 6.5% and Morrisons by 9.8%.  Lidl, Aldi and Waitrose saw sales rise by 16.5%, 10.4% and 12.5% respectively. 

 

*Kantar’s ‘Out of home’ panel records food and non-alcoholic drink purchasing, wherever it is bought and consumed, that is not part of a take-home grocery shop.  Data is collected from a panel of 7,500 consumers who record purchasing via a mobile app.  The on-the-go sales referenced here reflect purchasing at Grocers only.  

 **Kantar’s ‘Out of home’ panel also covers takeaways and deliveries. The data referenced here on deliveries refers to the 4 weeks to 19 April 2020.

 

Total Till Roll – Consumer Spend

12 weeks to 19 May 2019

Share

12 weeks to 17 May 2020

Share

Change

 
 

£m

%*

£m

%*

%

 
 

Total Grocers

27,481

100.0%

31,405

100.0%

14.3%

 
 

Total Multiples

27,002

98.3%

30,624

97.5%

13.4%

 
 

Tesco

7,503

27.3%

8,453

26.9%

12.7%

 
 

Sainsbury’s

4,177

15.2%

4,699

15.0%

12.5%

 
 

Asda

4,164

15.2%

4,436

14.1%

6.5%

 
 

Morrisons

2,845

10.4%

3,125

10.0%

9.8%

 
 

Aldi

2,191

8.0%

2,419

7.7%

10.4%

 
 

Co-op

1,682

6.1%

2,200

7.0%

30.8%

 
 

Lidl

1,589

5.8%

1,851

5.9%

16.5%

 
 

Waitrose

1,391

5.1%

1,564

5.0%

12.5%

 
 

Iceland

581

2.1%

748

2.4%

28.6%

 
 

Ocado

368

1.3%

487

1.6%

32.5%

 
 

Other Multiples

512

1.9%

642

2.0%

25.3%

 
 

Symbols & Independents

479

1.7%

781

2.5%

63.1%

 

*Percentage share of total grocers

 

Author: kimbarnard

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