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COVID-19: U.K. Quarantine Living Preparations Lead to A Massive Spike in FMCG Sales
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COVID-19: U.K. Quarantine Living Preparations Lead to A Massive Spike in FMCG Sales

As we’ve seen in other markets, the rush to prepare for quarantined living in the U.K. amid the novel coronavirus (COVID-19) pandemic led to massive grocery sales over the four weeks leading to the country’s restricted living state.

Consumers largely focused their stockpiling on grocery, health and personal items to build their pandemic pantries as worries about the spreading virus grew. The massive stockpiling resulted in more than 79 million extra shopping trips, where consumers spent a massive £1.9 billion on groceries than a year ago, pressuring manufacturers, retailers and the entire supply chain.

This unprecedented change in consumer behavior materialized through a series of small increments, as shoppers typically added just one extra item to their basket during each trip during the four weeks ended 21 March. According to our Nielsen Homescan data, the average shopping basket increased from 10 items to 11 items, and the average basket spend rose from £15 to £16. In aggregate, however, shoppers made three additional shopping trips during this period, and this purchase behavior aligns with what we would expect from consumers heading into restricted living situations.

A LOOK AT WEEKLY DEVELOPMENTS

Total Store Sales - Weekly Growth

The week ending 21 March marked a clear escalation point in the U.K. government’s response to the health crisis. Schools, pubs, restaurants, gyms and other social venues were ordered to close, financial aid packages for businesses and workers were launched and it strongly urges everyone to stay at home, indicating that elderly and vulnerable people would be quarantined in a bid to protect lives.

Paul Walker, U.K. and Ireland Managing Director says: ”In that week alone, grocery sales increased by 43% as U.K. shoppers spent £3.2bn on groceries during this week—just shy of the total amount spent during last year’s peak Christmas trading week at £3.4bn. While Christmas comes just once a year, the U.K. retail industry has had three weeks of significantly increased sales, none of which could have been planned from a supply chain perspective.”

THE U.K. BEGINS QUARANTINE LIVING PREPARATION

The week ending 21 March may prove to be the peak in stockpiling as shoppers continued to buy essential goods in preparation for quarantined living. Although it’s likely that many pantries across the country were already well stocked, with the government announcements of increased measures to mitigate the spread of the virus, shoppers continued to stockpile with sales of ambient grocery up by 104%. With cupboards full, shoppers began to prepare for the ‘lockdown’ by filling their freezers, and sales of frozen food increased by 84%.

Key Super Category Growth - Week Ending 21 March

“It’s no surprise that during the week it was announced that pubs and restaurants must close, we saw a surge in sales of beer, wine and spirits—up 58% over this time last year,” says Walker. “We can now see a shift in shopping behaviour from stockpiling items simply to exist to stocking up on items to maintain their lifestyle. And, as off-licences were recently added to the list of government’s ‘essential’ retailers, we can see just how important the BWS category is to British life.”

As shoppers prepared for quarantine living, and many households suddenly found themselves at home trying to juggle work and childcare, it’s clear that quick and easy meal solutions topped the list. Sales of canned pasta—products that are easy to heat and popular with kids—increased by 226%. While sales of ambient noodles (+167%) and pot noodle snacks (+150%) also surged as easy meal alternatives for teenagers and adults alike. Sales of key shelf-stable protein sources such as canned meat and fish also increased.

Essentials such as medicines, bath and shower products, and facial tissue all saw growth, despite the ongoing out-of-stocks across most retailers. Whereas, non-food categories saw a decrease of 12% in sales during this week, as shoppers focussed on their essential needs.

In fact, many major supermarkets are using the space previously allocated to non-food items – gardening supplies, clothing, cookware, etc —to make more room for essentials. They’re also reducing some FMCG ranges so they can stock more of the key products on shelf and also to help get shoppers in and out of the store quickly, while facilitating social distancing.

Key Category Growth - Week Ending 21 March

THINKING BEYOND THE BUG

While the week ending 21 March may prove to be the week where stockpiling peaked, it’s likely that as we move from quarantine living to restricted living, that shoppers will continue to top up their cupboards and their freezers as they plan ahead to Easter. And while all supermarkets have experienced significant growth, consumers also opted to shop online, many for the first time as online grocery sales increased by 14%2 in the four week period. Two in 10 British households shopped online during this period representing an extra 600 thousand new households shopping online compared to the same period last year, placing an additional 1.2 million online grocery orders. However, unlike stores, there is a finite capacity for online grocery shopping, due to warehouse capacity and available delivery slots, and this will have limited the growth of online sales.

We anticipate that over the next few weeks, shoppers will begin to think more creatively about how they cook. Popular cooking shows are already adapting to feature recipes and tips for making the most of old cupboard staples, and as shoppers begin to use up some of the canned pastas, meats, fish and veg they’ve accumulated alongside the pastas, rice and grains they’ve stocked up on, it should hopefully alleviating the demand for some of these things in supermarkets.

“As British shoppers become more accustomed to what the quarantine means for their daily lives, and restricted living becomes the new norm, we expect to see shopping behaviour evolve to become more local as shoppers are unable, or unwilling, to travel further than is necessary for immediate needs such as fresh foods. In any case, the increased base level of sales that we’ve seen over the last several weeks won’t suddenly evaporate, growths won’t suddenly plummet to the levels we saw back in January and February before the crisis took hold,” says Walker.