Coronavirus (COVID-19): UK market update w/e 3 May

Nick Gladding
Senior Retail Analyst
@RetailAnalysis

Date : 03 May 2020

In this regularly updated article, we summarise the latest responses to the Coronavirus (COVID-19) pandemic in the UK:

Market update:

  • Grocery sales growth slows to 5.5% in April: New data from Kantar reveals a slowdown in grocery market growth from 20.6% in March to 5.5% over the four weeks to April 19th as consumers settle into life under lockdown.

Multiples update:

  • Sainsbury's warns of £500m Covid-19 cost impact but expects these to be braoadly offest by higher grocery sales. For details see Sainsbury's FY 2019 results
  • Tesco updates on latest developments: Tesco CEO Dave Lewis commented in a BBC interview that the number of transactions nearly halved in April but average transaction size has doubled. He added that the business has taken on 45,000 temporary workers to help cover for the 51,000 staff who were absent because of COVID-19 and cope with the increase in online deliveries
  • Sainsbury's charity appeal passes £3m mark: Sainsbury's has reported that its customers (and those at Argos, Habitat and Nectar) have donated more than £1.5m to Comic Relief and Children in Need which the retailer will double when the joint appeal closes on May 1st
  • Morrisons extends support for farmers and fishermen: Morrisons has opened new half price summer Steak and Seafood Bars at stores, offering a wide choice of steaks joints and 20 types of fish and shellfish that might previously have been destined for the restaurant trade
  • Asda launches call & collect service for pharmacies. From May 1st customers will will be able to park in designated bays, and
    call through to an Asda pharmacy and have medication brought direct to their car

Online update:

  • Tesco reaches 1m delivery slot target: Tesco has reported that it has boosted capacity to one million delivery slots, which is 400,000 more than it had at the start of the COVID-19 crisis six weeks ago. Over the next two weeks it expects to increase capacity further to 1.2 million deliveries. It is also urging customers who can visit stores or use Click & Collect to do so to free up home delivery slots for people
    who need them most 
  • Morrisons expands choice of meal boxes: A new gluten-free essentials box has been added to the retailer's range. Morrisons expects to produce over 200,000 of the £35 meal boxes over the coming weeks

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Convenience update:

  • Blakemore extends home delivery to 60% of its company stores. The wholesaler has been trialing the third party Snappy Shopper convenience ordering app from four stores in the Wrexham area. Following the success of the trial, the app will be rolled out to a total of 250 SPAR stores across Blakemore’s network by the end of April, including independently operated stores as well as company-owned
  • Co-op has reported strong trading results for 2019, with total revenue up 7% and underlying profits up 50% like-for-like. The retailer’s results statement also included an update on how it is supporting customers and colleagues through the Coronavirus (COVID-19) crisis;
    • Co-op colleagues in Food and Funerals recognised as key workers and rewarded with £150 bonus and an extra day’s holiday
    • 7,000 temporary jobs created and filled within seven days
    • New Co-op Members’ Fund established to support Foodbanks, address funeral poverty and help local causes £1.5m of food delivered to FareShare
    • Vouchers given in lieu of free school meals to Co-op Academy pupils
    • Online resource ‘Co-operate’ launched to direct those in need to local and national support initiatives
    • 700+ Member Pioneers continuing to support volunteering initiatives in their areas
    • Read more on Co-op’s COVID-19 response

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  • Independent convenience stores update: Average weekly footfall in local shops (symbols & unaffiliated independent c-stores)
    started to pick up from -10% in the first week of the lockdown to just -2% in week commencing 20 April compared with the pre-pandemic weekly average (10 February – 8 March 2020) according to the latest data from The Retail Data Partnership (TRDP)

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M&S update:

  • M&S has warned of the adverse effect of COVID-19 on its business. Even within its strong food division, with closure of cafes and reduced footfall in city centres contributing to this. In light of these challenges, the business does not intend to pay a dividend for the 2020/21 financial year. The retailer has also taken steps to protect liquidity. This announcement comes ahead of the retailer's full year results on 20 May.
    • In addition, the retailer is also launching a new marketing campaign in support of British farmers. Read more here.

Food-to-go update:

  • Greggs and McDonalds plan to re-open stores.  Two more leading UK food-to-go chains have announced plans to reopen stores, following recent openings by Pret, KFC, Burger King and Costa Coffee. Read more here.

For more on Coronavirus (COVID-19)