The festive cheer has rolled on into the new year for grocers, with data showing that customers’ record food and drink spending from December continued into January.
Take-home grocery sales for the 12 weeks to January 24 grew 12.2% to £32.8bn, while the ongoing effects of hospitality closures due to the coronavirus saw customers spend £10.2bn in January – an extra £1bn compared with the same period the previous year.
Another notable consumer behaviour came in bricks-and-mortar versus online sales. The data showed that customers who were 28 years old and under increased spending in larger physical stores by 12%, while the over-45s cut spending in supermarkets by 1%.
While the over 45s shopped less physically during the period, this age group spent more online, which Kantar says played a big part in helping digital food sales hit a record 14% share this month.
“Older people are clearly getting more comfortable and proficient at ordering online and they now make up 28% of the 6.4 million who used online services in Great Britain this month”
Fraser McKevitt, Kantar
Kantar’s head of retail and consumer insight Fraser McKevitt said: “Retired households have boosted their online spend by a staggering 229% compared with January 2020.
“Older people are clearly getting more comfortable and proficient at ordering online and they now make up 28% of the 6.4 million who used online services in Great Britain this month.”
With coronavirus restrictions meaning customers were forced to celebrate New Year’s Eve at home, food delivery apps such as Just Eat and Deliveroo reaped the benefits. Orders from food delivery companies accounted for 6% of all online food shops during the period.
Driven to drink
Notable consumer trends during the period included a marked uptick in the sales of vegan and plant-based products, up 10% with more than 6.6 million households taking part in Veganuary.
On the flipside of this trend, however, was a surge in alcohol sales in what has, in recent years, been a slow month due to Dry January. Sales of alcoholic beverages stood at £234m – a 29% uptick from last year.
With schools closed, parents saw average basket sizes rise. Kantar found that the average family spent £50 more on groceries in the month of January than they did last year, which in turn drove sales increases in products such as fresh pasta (up 22%), chocolate spread (42%) and peanut butter (39%) year on year.
While Kantar notes that its latest period of reporting covers a year from the first coronavirus cases being confirmed in the UK, it said it expects that the growth enjoyed by food retailers since the pandemic struck will begin to tail off.
Kantar’s McKevitt explains: “We expect to see strong growth for all the grocers fall off as we reach the anniversary of the first national lockdown in March. Sales will then be measured against the high volumes recorded in spring and summer 2020.
“With the vaccine rollout under way, there’s also hope that the hospitality sector will reopen, meaning demand for take-home groceries is likely to subside.
“Brexit has been another talking point, though steady grocery inflation of 1.3% this month suggests any pricing impact is yet to be felt by consumers.”
Share and share alike
| Total till roll – consumer spend | 12 weeks to 26 Jan, 2020 (£m) | Share* | 12 weeks to 24 Jan, 2021 (£m) | Share* | Change | |
|---|---|---|---|---|---|---|
| Total grocers | 29,245 | 100% | 32,814 | 100% | 12.2% | |
| Total multiples | 28,778 | 98.4% | 32,249 | 98.3% | 12.1% | |
| Tesco | 7,992 | 27.3% | 8,969 | 27.3% | 12.2% | |
| Sainsbury’s | 4,611 | 15.8% | 5,165 | 15.7% | 12.0% | |
| Asda | 4,367 | 14.9% | 4,797 | 14.6% | 9.9% | |
| Morrisons | 2,999 | 10.3% | 3,428 | 10.4% | 14.3% | |
| Aldi | 2,299 | 7.9% | 2,429 | 7.4% | 5.7% | |
| Co-op | 1,759 | 6% | 1,959 | 6% | 11.4% | |
| Lidl | 1,717 | 5.9% | 1,926 | 5.9% | 12.1% | |
| Waitrose | 1,467 | 5% | 1,634 | 5% | 11.3% | |
| Iceland | 679 | 2.3% | 828 | 2.5% | 21.8% | |
| Ocado | 397 | 1.4% | 543 | 1.7% | 36.6% | |
| Other multiples | 491 | 1.7% | 572 | 1.7% | 16.5% | |
| Symbols and independents | 467 | 1.6% | 565 | 1.7% | 20.9% | |
*Percentage share of total grocers
In terms of overall market share, Ocado was the fastest-growing supermarket in the UK, with sales up by 36.6% and market share jumping 0.3 percentage points.
Waitrose, too, enjoyed significant growth in the period due to the expansion in its online operations, with sales jumping 11.3%, although its market share remained flat at 5%.
Frozen food specialist Iceland enjoyed another month of growth, with sales jumping 21.8%, meaning it has now grown every period since April 2018.
Convenience stores and independents also continued to enjoy sustained growth during the period, accounting for a combined 12.9% of market share in January, the highest since September 2020 – the Co-op’s 11.4% sales increase for the period being emblematic of this shift.
In terms of the big four supermarkets, Morrisons saw the fastest sales growth, up 14.3%. The retailer also saw its total market share grow for the eighth month in a row, up to 10.4%. Tesco also had a strong month with sales of 12.2%, followed by Sainsbury’s with a 12% spurt.
Asda finished the month with sales up 9.9%, below overall market growth, although this represented its best monthly growth since July 2020.
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