Supermarket Sales Fall As Consumers Prepare For End Of Lockdown

As the UK edges closer to the end of the lockdown period, latest grocery industry data from NielsenIQ signals the end of pandemic purchasing. Total till sales fell by 2.9% year-on-year in the four weeks to 27 March despite a 34% jump in sales of confectionery ahead of Easter and increased spending in supermarkets on clothing (+106%) and garden items (+92%) in preparation for Spring.

In contrast, sales of packaged grocery were down 24% and household goods (such as cleaning and paper products) fell by 31% against the same period last year when consumers began stockpiling.

However, when compared to the same period in 2019, before the pandemic, overall sales were still up 14% as shoppers spent ￡1bn more on groceries in the latest period.

NielsenIQ’s data also shows that in the last four weeks, online grocery sales remained high, growing at 92%, whilst bricks & mortar sales declined by 14% year-on-year.

While overall growth declined in the last four weeks, the picture for the first quarter of the year also indicates that sales are now levelling off, with industry growth of 5.7%, down from 8.6% in the last quarter of 2020.

In terms of retailer performance, NielsenIQ’s data showed that Lidl (+16.2%) grew the fastest over the 12 weeks period. Iceland (+7.8%) and Aldi (+7.6%) also performed well. Meanwhile, Asda (+6.0%) and Morrisons (+5.9%) were the fastest-growing supermarkets of the Big Four retailers.

Mike Watkins, NielsenIQ’s UK Head of Retailer and Business Insight, commented: “It’s clear that as we draw ever closer to the end of lockdown, consumers have been looking ahead to spring and indulging in some retail therapy, ranging from Easter chocolate to some new clothing or accessories for the home and garden.

“With the economy slowly reopening we will soon see a rebalancing of consumer spend in the months ahead. As 80% of consumers say they would feel confident returning to restaurants once they’ve had their vaccine, many billions of pounds are set to return to cafes, pubs and restaurants which could impact on grocery sales. But, with the likelihood of a ‘stay at home summer’ supermarkets are still well-positioned to capture incremental spend.

“However, one in three (35%) British consumers are now newly constrained, having faced a decline in household income or financial situation and are now watching what they spend much more – up from 29% in September. These multiple factors mean that it is still unclear how all consumers will respond post-lockdown, and how exactly their shopping habits towards food and drink with change still remains to be seen.”

NamNews Implications:

• Key for NAMs to compare their sales by category and retailer…
• …identifying opportunities.
• (and possibly some threats: are you really optimising discounter growth?)
• And optimise the post-lockdown emergence of the super-savvy consumer…
• …by always delivering more than it says on the tin.
• Minimum…