Data from Nielsen confirms that shoppers are spending more on their grocery shopping as people return to working from home and eat out less to adhere to recent government guidelines. Overall sales growth in the four weeks ending 3 October hit 8.3%, with beers, wines and spirits (+17%) remaining the fastest-growing category, followed by frozen (+16%).
Whilst there was a significant rise in sales of disinfectants (+92%), toilet tissue (+34%) and household cleaning accessories (+24%), Nielsen highlighted that these growths are far below the levels seen during the peak of the pandemic, and do not suggest the return of panic buying just yet.
Meanwhile, shoppers continued to move towards online shopping, with the channel up by 91% in the last four weeks as supermarkets continue to add additional delivery slots. The Nielsen data also shows that in the last 12 weeks, 10.6m shoppers used online to do their grocery shop – up from 7.2m at the same time last year. Whilst this has compromised store visits – down 11% in the last four weeks compared to this time last year – they are up from the low point of April. Spend per visit at stores increased by 15%.
In terms of retailer performance over the 12 week period, Morrisons (+8.7%) remained the top performer of the Big Four supermarkets. However, Ocado is still the fastest-growing retailer with sales up 46%. There was also strong growth from Lidl (+14%), which now overtakes Iceland (+12.9%). Nielsen suggested that this is likely a result of Lidl launching its new loyalty app at the beginning of the month, offering shoppers extra savings.
Mike Watkins, Nielsen’s UK Head of Retailer and Business Insight, said: “Since March, households in the UK have had to continually adjust to new ways of working, living and eating. This is reflected in the volatility of weekly FMCG sales. Yet, after many months of living with the pandemic, some shoppers are getting more accustomed to this ‘new normal’ and there hasn’t been any strong signs of stockpiling like we had earlier in the year.”
He added: “Whilst shoppers are slowly becoming more comfortable returning to stores, online remains the biggest winner and a third of shoppers who shopped online in the last 12 weeks are new to online. Shoppers who first shopped online in the early summer are staying online and making repeat purchases. Which means online is likely to take an even bigger share of sales as we head into the festive period, and we expect it to hit around 15% of all FMCG sales over the next few months.”
12-weekly % share of grocery market spend by retailer
and value sales % change
NAM Implications:
- Once bitten…
- Online appears to grow in direct proportion to increased availability.
- (i.e. real demand and no going back)
- Anticipate structural changes in traditional retail, commercial office property and hospitality…
- …to accommodate home working.
