In an excusive interview with IGD, Sainsbury's Commercial Director Paul Mills-Hicks discusses how shopper behaviour has changed since the onset of the COVID-19 crisis and the outlook for the rest of 2020. Below we highlight some of his key points.
Preparing for post lockdown
Mills-Hicks' “biggest worry” is whether customers will be as relaxed and accommodating if many lines are still not back into supply once lockdown measures are eased, as for some products the entire value-chain of stock has been emptied and Sainsbury's priority is to gear up for the return of demand. He sees September as a big cut-off date when Sainsbury's and the wider industry will “have to be absolutely match fit” to trade successfully through the golden quarter. After ensuring safety, securing supply will be the No.1 priority.
Changing shopping habits
Basket size is currently about 50% ahead of pre-COVID-19 levels and transaction numbers have dropped, as people undertake planned big weekly shops spread across the week, sometimes on behalf of others as well as themselves. Shopper demographics have also shifted with big stores now attracting more younger shoppers, while more older people are now using convenience stores. It’s like shopping in the 1980’s Mills-Hicks added.
Will all the range return?
Sainsbury’s is very supportive of not bringing back the full range if it creates an opportunity to reduce complexity and cost whilst still satisfying customers. It’s reinforced Mills-Hicks' thinking “Missions drive sales, promotions switch volume between brands”. He believes the COVID-19 experience demonstrates that the industry should focus on developing missions to ensure healthy long term growth.
Will changes become permanent?
Sainsbury’s expects more working from home from the office-based workforce in the UK will continue to change the nature of how people shop – though such is the supply challenge that the business doesn’t have the “brain space” to think long-term on Destination Sainsbury’s. Sainsbury's focus is on the next three months and it is not clear which of the changes on shopper behaviour are temporary and which could become permanent. However Mills-Hicks is hopeful that shoppers who have returned to Sainsbury's stores recently will value improvements made to pricing, range and the shopper experience and so stick with the retailer. It's also likely that shoppers who have begun using online will stick with the channel because of the convenience it offers.
Watch the full interview here