Grocery sales fall as indoor pubs and restaurants reopen

Grocery sales fell nearly 7 per cent during the first week of hospitality reopening as people flocked to indoor pubs, restaurants and cafes which opened their doors for the first time since the January 5 lockdown.
By Ros Snowdon
Published 2nd Jun 2021, 16:45 BST
Despite a fall in grocery sales, food retail sales increased almost 11 per cent compared with the same period in 2019Despite a fall in grocery sales, food retail sales increased almost 11 per cent compared with the same period in 2019
Despite a fall in grocery sales, food retail sales increased almost 11 per cent compared with the same period in 2019

New data released by NielsenIQ showed that despite this fall in grocery sales, food retail sales increased almost 11 per cent compared with the same period in 2019, reflecting entrenched behaviour changes during lockdown.

Without the requirement to limit unnecessary travel, NielsenIQ data also showed that visits to stores were up by 20 per cent compared with the same period last year. However, with more frequent visits, spend per visit has fallen to £17.40 from £21.50 in May 2020. NielsenIQ said that shoppers will also be spending more at travel outlets and other "food to go" establishments.

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NielsenIQ data indicated that UK shoppers are continuing to embrace online grocery shopping, with 28 per cent of UK households still shopping online in the last four weeks - the same figure as a year ago - and considerably more than the 17 per cent in May 2019.

As a result, shoppers spent £1.25bn online in the last four weeks ending May 22. The online share of grocery sales remained strong at 14 per cent - exceeding the 13 per cent market share recorded in May 2020.

In terms of category performance, delicatessen (up 19 per cent) is the fastest growing supercategory followed by health and personal care (up 16 per cent) and bakery (up 11 per cent).

NielsenIQ said this was a result of easing lockdown restrictions, with more opportunities to socialise outdoors and many people returning to the office. As a result, frozen food sales saw the biggest decline (down 15 per cent) as well as packaged grocery (down 10 per cent) alongside beers, wines and spirits (down 7 per cent), as consumers returned to visiting pubs, bars and restaurants.

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Mike Watkins, NielsenIQ’s UK head of retailer and business insight, said: “Despite lockdown restrictions easing, it is evident that online grocery remains popular with British consumers, with almost one in three households still choosing to shop online.

"This suggests that the shift of spend to online that we saw over the last year is now a more permanent fixture for many and part of regular grocery shopping routines. With supermarkets placing more investment in their rapid delivery and fulfilment, shoppers are no longer seeing this only as an option for one large shop. Usage is evolving to meet a wider range of shopper needs and meal occasions, no matter the basket size.

“Looking ahead, the challenge for food retailers is to reassess shopping behaviour now when their customers have opportunities to spend elsewhere across leisure, hospitality and travel, particularly when restrictions are permanently lifted at the end of the month.

"However, with the start of warm weather, Euro 2021 on the horizon, and the likelihood of more stay at home UK holidays, there will still be opportunities for supermarkets to increase basket spend and improve sales as we head into the summer months.”