The restrictions placed on the general public as a result of the COVID19 pandemic was always going to force change when it came to consumer habits. Traditional behaviours were turned on their head and how we allocated our household budgets altered dramatically.
Being ingrained within the food manufacturing industry, we witnessed that immediately, our ‘grab and go’ shopping mentality had faltered, and as expected, the convenience, or ‘food to go’ sector declined. We also saw that spending on items such as chilled ready meals gave way to fresh and store-cupboard ingredients, as more time spent at home meant that people were rolling up their sleeves and cooking from scratch.
You can see what we had to say about the food and retail sector in the early days of lock here: Three things we’ve learnt about the food manufacturing industry during COVID19.
These were our initial observations. However, as lockdown stretched on, where and how has the UK public been spending their money? And what do they cite as the reasons for these decisions? We analysed a variety of data sources to get a better insight.
Barclays found that overall, spending in supermarkets is up by 25.7%, with online retailers taking a 50% share of total consumer spending and online grocery shopping, in particular, increasing by 106%.
This should come as no surprise, as the early days of lockdown meant that many households weren’t able, or willing to continue shopping in-store, due to the health risks it posed. Springboards monthly footfall monitor supports this, finding that March saw a 41.3% drop for instore footfall, as only a few would be responsible for the occasional trip to the shops to bulk buy items. By April the figure had slumped to a decline of 80% as the general public abided by the restrictions in place.
It seems that instore footfall may never return to the same levels. Another study by McKinsey found that more than 50% of UK consumers said that they would continue to use online shopping for groceries, alcohol, household supplies and personal care items. Although when it comes to more expensive items, like electricals, or items that require more browsing like skincare and make-up, consumers want to be able to shop traditionally.
Perhaps another statistic that will come as no surprise was that there was a 31.3% rise in spending on DIY and home improvement items. It seems that an abundance of free time spent staring at the same four walls meant that decorating and home improvement became a priority.
According to data collected by Politico, early consumer shopping saw increased spending on the following.
These trends are indicative of the general feeling at the beginning of lockdown in March, efforts to keep ourselves and our environments clean were at all all-time high, and ‘toilet-roll gate’ was in full swing. The feeling of uncertainty led to Brits stockpiling items that offered a long shelf life and good value for money, like tinned soup and canned meat – reminiscent of a wartime era.
This is a far cry from the trend of healthy or ‘clean’ eating we’ve seen grow in popularity in recent years. As demand for rice, pasta and even eggs and long-life fruit and veg increased, higher value items such as wine and fish were snubbed, while spending on fresh flowers collapsed completely. It would appear that they missed the memo for the ‘self-care’ trend.
As the weeks went on, UK spending went on:
45% of UK consumers agree that their spending on groceries has increased, while 14% said that it had increased dramatically.
39% attribute an increase in spending on having to opt for more expensive products because their preferred brand hasn’t been available. At the same time, 32% said that funds not spent on eating out or on takeaways are being diverted to grocery shopping.
29% are looking to the retailers as the cause for increased spending. Concerns about supermarkets being able to control stock level led to a halt on multi-buy offers, and as a result, consumers are feeling the pinch. When it comes to the stores or retailers that we are choosing, 26% of consumers revealed that they were shopping at local convenience stores instead of supermarkets and higher prices in these stores were the reason for their grocery bill increasing.
31% admitted to eating more out of comfort, while 13% just wanted to treat themselves. Two mindsets we have all experienced at one point or another throughout lockdown. Restrictions on daily routines, being faced with the same four walls and children home day in, day out – we needed an outlet, and let’s face it – food is good for the soul.
Brand loyalty has been tested to the limits during the pandemic. Supply chain disruptions experienced across the sector meant that consumers faced challenges when searching for their preferred products at their preferred retailer; this forced a change in habit.
Because of this, a high volume of consumers have bought products from different brands, or shopped at a new retailer. In fact, 71% of consumers have tried new retailers or brand in lockdown.
As we emerge in a new landscape when it comes to shopping and grocery shopping, retailers and brands are going to have to work hard to reclaim their customer base. As a result, and we could see substantial marketing drives and a focus on new product development, we await with bated breath to see how the industry responds.
Prior to The Sterling Choice I spent my earlier life in the Insurance industry (don’t judge me). I started The Sterling Choice with Gareth back in August 2013. When I look back to our h...