GB grocery growth slows as shoppers adapt to life under lockdown

Lucy Ingram
Retail Analyst
@RetailAnalysis

Date : 28 April 2020

Grocery market growth slowed from the exceptional rate of 20.6% in March to 5.5% over the last four weeks, according to new Kantar data. In this article, we explore the performance of key retailers as life under lockdown becomes the new normal for British shoppers.

Out of home consumption reverts to the home

Take home grocery sales grew 9.1% in the 12 weeks to April 19th. There was a lack of Easter celebrations and gifting as people stayed at home, but an increase in BWS and baking sales.

Surges in demand to stock up on ‘essentials’ seen in March have been followed by more generally elevated sales, as foodservice consumption reverted to the home. Kantar also reported a drop in the number of shopping trips per month, but an increase in basket size. Households shopped 14 times for groceries in the last month, compared to the 17 times usually seen. The average spend per trip rose to £26.02, the highest figure recorded and £7 up on last year.

While volume increases propelled market growth, inflation has also risen with promotional activity greatly reduced. Kantar's measure of grocery inflation now stands at 1.9%, more than twice month's 0.9% rate and this could rise further as cost pressures from the new operating conditions pass through the supply chain.

Co-op becomes the fastest growing retailer as convenience sector booms

Over the 12 week period, Co-op overtook Lidl to become the fastest growing retailer as it benefitted from shoppers using local stores more. Last week the retailer reported strong trading results for 2019,with total revenue up 7% and underlying profits up 50% like-for-like.

In total, Kantar reported that convenience sales are up by 39% over the last four weeks to take a 16.3% market share. This is a trend we are seeing in our latest Shoppervista research with smaller top-up shops replacing main/big shops, following widespread stockpiling in March. Four in ten (43%) shoppers completed a top-up shop on their last trip (12th - 18th April) compared to a third in the first two weeks of March (1st - 14th March). Shoppers are also prioritising speed and ease when it comes to choosing where they shop.

Strong demand for online continues

Strong demand, particularly from older shoppers and those shopping on their behalf, supported by push to expand capacity has pushed online sales to new highs. Ocado’s sales growth reached 19.4%, compared to 12.5% in the previous reporting period. Online penetration is likely to remain at higher levels as new shoppers become regular users of the channel and high spending family shoppers migrate back to online as delivery slots again become available

For subscribers looking for more insight on the channel, read our how the online channel will be impacted in 2020 report.

Sainsbury's is the best performer of the Big Four

Among the Big Four, Sainsbury’s was again the best performer, with 8.4% growth putting it only narrowly behind Aldi. Look out for our coverage of Sainsbury's FY19 results on April 30th.

Tesco also achieved stronger growth than in last month’s data release, with sales up 7.2%, compared to 5.5% in March. 

Both Sainsbury's and Tesco continued to grow at a much faster rate than Asda and Morrisons, whose growth was 3.5% and 4.3% respectively.

Discount growth slows

Both Aldi and Lidl's growth slowed down in this reporting period. With Aldi's sales at +11% for the 12 weeks to March 22nd, slowing to 8.8% in the 12 weeks to 19 April. Lidl's sales dropped from +17.6% in the March reporting period to +14.8% in April. This may be due to there being less flexibility in the format to cater for extra demand. However, with financial confidence declining, shoppers have said they will be focusing more on saving money in the months ahead, so we expect discounters to benefit from this. Our ShopperVista data revealed 27% of shoppers are focused on saving more money in the year ahead, the highest level in over a year.

For more insight on how UK discounters are responding to the pandemic.

Detailed results

Retailer 12 weeks to 21st April 2019 12 weeks to 19th April 2020 Sales growth (Y-O-Y%)
Tesco 27.3% 26.8% 7.2%
Sainsbury's 15.4% 15.3% 8.4%
Asda 15.2% 14.4% 3.5%
Morrisons 10.3% 9.9% 4.3%
Aldi 7.9% 7.9% 8.8%
Co-op 6.1% 6.7% 20.0%
Lidl 5.7% 6.0% 14.8%
Waitrose 5.0% 5.0% 9.4%
Iceland 2.1% 2.2% 16.6%
Ocado 1.4% 1.5% 19.4%
Other Multiples 1.8% 2.0% 19.2%
Symbols & Independents 1.7% 2.2% 40.5%

Source: Kantar

 

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