This past year has been one of yet more change. We’ve been through lockdown, the reopening of hospitality, a ‘freedom day’ and now a return to mask wearing and home working. New patterns of behaviour have emerged. As Covid restrictions have waxed and waned, we have been better able to understand which pandemic-driven shopper habits are sticking in grocery, and which are slipping away.
One of the habits to stick is online shopping. Back in January, online grocery shopping recorded a share of 16%, highlighting the successful way in which retailers reorganised their infrastructure to fulfil demand. Shoppers became more open to new routes to feeding their families. Whilst this share has now settled at around 12%, penetration has remained steady with just under a third of households shopping for groceries online.
What was a revolution in terms of shopping behaviour has now become an evolution, as shoppers adopt a more blended approach to getting their groceries. This new omnichannel shopper – one that is happy to purchase both in bricks & mortar and online – has meant the return of smaller baskets and shopping more frequently. This, of course, has been helped by the uptake of vaccinations and increased confidence to return to stores. It also means shoppers are far more willing to shop around for the right products and the right price. With four in 10 shoppers now constrained and watching what they spend, mixing online with offline offers them the ability to check prices more easily and more control over their wallets.
At the same time, a look at this year’s The Grocer Top Products survey shows consumer demand for personal vices has not diminished. Restrictions on foreign travel and hospitality throughout 2021 have been a key influencer on growth, with rolling tobacco sales up £790m (21.8%), closely followed by cigarettes with an extra £686m (5.7%). The trend we saw in 2020 for table wine and spirits also sustained, with an additional £295m (4.5%) and £394m (7.4%) respectively. The appeal for mixing cocktails at home continues.
The Grocer’s Top Products Survey 2021: who’s up, who’s down – and our overview of the key trends
But shoppers are no longer buying simply for the at-home environment. One shopper mission that has made a comeback in the past year is on-the-go purchasing. The temporary return to the office, alongside the opportunity for leisure, staycations and socialising, drove growth in impulse drinks. Sports and energy drinks are fuelling this less restricted living with an additional £206m (15.2%), closely followed by carbonate soft drinks with growth of £180m (5.6%).
So, what will the new year look like? Price will be higher on the shopper agenda. In the last quarter of this year, we witnessed a rise in fuel prices, energy companies struggling, supply chains creaking and a shortage in delivery drivers. And there are certainly more headwinds on the horizon as the word ‘inflation’ gets ever more airtime. After Christmas, the industry will have to be imaginative to mitigate some of the cost increases for consumers.
Another challenge ahead is the introduction of government legislation on high fat, salt and sugar (HFSS) products, currently timed for October. Retailers and manufacturers that successfully navigate the new rules on products, price and placement will continue to win the penetration battle.
Whilst there are no crystal balls, it might be safe to predict that next year will be another year of uncertainty. Shoppers will prioritise spend on the things they need, the things that help their wellbeing, the things that fit with their value system and – finally – the things they can afford.
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