March saw the highest sales ever recorded by British supermarkets. Overall spending was up by one fifth, resulting in sales of £10.8 billion. Our Client Knowledge Director, Andrew Walker, outlines what we've learned now that the initial flurry of grocery spending has settled down.
Competing factors
Now we're two weeks into lockdown, the situation has changed dramatically and there are a number of competing factors making future demand fiendishly difficult to predict.
As consumers, we now have more in our cupboards so should need to buy less when we go in-store. However, we're mostly confined to our homes and need to cater for more meals in the home. And on the other hand we’re not visiting stores as often so discretionary purchasing is likely to decline.
What we know is that each category will feel those forces to varying extents. So how can manufacturers and retailers better manage demand and replenishment during lockdown and beyond?
Four key lessons
Firstly, it’s important to get a good handle on what’s happening now. The four key lessons we have learned so far are:
- This is an ever-evolving crisis. Shopping behaviour has changed in unprecedented ways and it has changed almost daily. There have been extreme highs in some categories and we may start to see the corresponding lows. Its crucial to stay as up to date on developments as possible.
- Footfall growth is good for sales but the reverse is also true. During March, 257 out of 285 grocery categories were in growth, where in normal times we would expect around 50% to be growing. More people having more opportunities to buy in the days before lockdown pushed sales up everywhere; it is likely that the reverse will be true for many categories with the lower traffic through stores that we’re now seeing.
- We all respond differently in a crisis. Not all shoppers behave the same way and there is a spectrum of behaviour in each and every category. It’s important to understand the behaviour of everyone from the 25% of households who increased their volume of purchasing by more than 50% in March to those at the other end of the spectrum who may be struggling to access everything they need.
- Understanding behaviours in the present prepares us for the future. We know that behaviour is changing during lockdown and what will be on manufacturers and retailers minds is how this will play out in terms of demand. Only by understanding individual experiences of the crisis and how they manifest themselves in behaviour can we make informed projections as to what comes next.
Of course there will be many variables at play here. For more detail, watch Kantar’s Ensuring resilience in Retail webinar on-demand.
If you’d like to talk about consumer and shopper behaviour in grocery during Covid-19 get in touch.
