Grocery market grows at fastest rate since records began

Take-home grocery sales grew by 17% in the 12 weeks to July 12, 2020, again breaking the record for the fastest period of growth since 1994, according to the latest statistics from market monitor Kantar. 

Total sales across the grocery sector reached £31.6bn for the period, which Kantar said reflected the fact that for three months bars and restaurants had either been completely closed or faced severe restrictions. 

However, since the hospitality sector in England was allowed to reopen on July 4, Kantar said that grocery sales had decelerated somewhat, up 15% over the past month. 

Kantar’s head of retail and consumer insight Fraser McKevitt said the reopening of hospitality venues had already led some consumers to revert to more normal habits. 

“As lockdown restrictions are gradually eased and non-essential retail outlets reopen, some consumers are slowly resuming their pre-Covid routines and shopping habits,” he said.  

“This meant year-on-year supermarket sales growth decelerated in the most recent four weeks to 15%, down from 19% in June. However, we are clearly a long way off a complete return to normality.”

While footfall and hospitality sales may have begun to inch up, the latest figures show no stop in the inexorable rise of online grocery shopping. Online sales for the period soared 92%, with one in five UK households having utilised the channel in some form to buy groceries. 

Online is now worth 13% of the total grocery market, up from just 7.4% in March when lockdown began. 

As lockdown measures have begun to ease, promotional activity among the grocers has also risen. Kantar said that 29% of all transactions during the period involved some form of discount. 

Despite the looming threat of a massive recession, Kantar said that customers were still favouring branded products over own-brand labels during the period. 

In terms of individual supermarket performance, Kantar said that the big four enjoyed “strong sales growth” for the period. Morrisons in particular had fared well, with sales soaring 17% and gaining market share on its competitors for the first time since 2015. 

Tesco remains the UK’s largest supermarket, with its sales growing 15% during the period; followed by Sainsbury’s which saw sales climb 14% and Asda with 11%.

Both Lidl and Aldi also enjoyed sales growth, while frozen food specialist Iceland enjoyed another bumper period with its 34% sales growth representing a record. 

Convenience stores continued to see huge growth as well, with the sector’s largest player the Co-op seeing sales increase by 31% year on year.