UK Food & Grocery Retail Sector Report

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UK Food & Grocery Sector Report summary

March 2021

Period covered: Period covered: 31 January – 27 February 2021

Note: Reporting periods are either one or two months behind the current month as standard reporting practice. Certain data is undisclosed. Take out a free 30 day subscription trial to access this data or subscribe.

Food sales growth rose by 00.00% in February, year-on-year, against a 00.00% rise a year ago. The continued strong performance resulted in growth outperforming the three-month average of 00.00%.

Lockdown restrictions supports growth

The closure of hospitality, schools and ongoing work from home guidelines all contributed to the significant boost within the category.
Analysis from Kantar suggested that an additional seven billion meals have been eaten at home since the onset of the pandemic in March 2020. Stay-at-home Valentines meals also supported sales of premium ranges and chocolates.
Notably, in the final week of the month, sales in several ambient categories fell due to comparisons with the beginning of panic buying a year ago. Rice and grains, dry pasta, canned or packet soup, and toilet rolls all recorded double-digit declines.

Permanent shift to online

Online grocery sales continued to rise at an exceptional rate, according to the ONS.
However, the prevalence of online grocery shopping was much higher. Our research showed that almost two in five households (37%) had done some grocery shopping online in February.
This resonates with data from Kantar which reported that the online shopping accounts for c.65% of grocery spend each month for those consumers that shop online.
The pandemic has dramatically altered the growth and composition of online food sales over the last 12 months. Back in February 2020, when coronavirus case numbers stood at 13 (25 February 2020), average weekly online food sales totalled £177m with online food sales accounting for just 5.6% of overall retail spending.
A year on, the online penetration rate has almost doubled, with average weekly food sales just under two and a half times greater than their level before the full impact of the pandemic was felt.

Latest Developments

Aldi is expected to invest £22m on new and revamped stores in the Greater London area this year.
Morrisons extends its wholesale partnership with McColl’s, meaning the grocer will now be McColl’s sole wholesale supplier until 2027. McColl’s stores will carry a full range of Morrisons convenience products.

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Comparison of penetration rates for food before the pandemic, during periods of lockdown and mid-pandemic (periods of no lockdown)