1078629286 0 0 3032 1706 1200X0 80 0 1 177Df077Bffbe4E54F4D63Bc7D56Ab0C
Trends Article April 2020

What next for the thriving categories in retail as a result of Covid-19?

Charlotte Malbasa, Client Development Manager, at Threefold comments on the latest news and trends within the world of retail.

Charlotte Malbasa Written by Charlotte Malbasa on 21 Feb, 2020

Who knew that the UK were a nation of bakers?

I certainly didn’t. Not until that is, I tried searching for plain flour, only to track some down two weeks later.

It’s not like I went shopping once a week. I went ‘shopping’ virtually every day (on my daily outing), putting my nose into my locals (Aldi, Co-op and a small independent), hunting for flour and only coming out with ‘top up’ chocolate.

In the end, success came from a second small independent that I’d previously only been to once and generally forget exists. When hesitantly asking the shop owner for flour, he went straight into the back, disposable gloves on, and pulled out a bag of plain flour.

Now, I’m confident my tale isn’t the first observed or carried out by shoppers amidst the unprecedented times we’re experiencing.

And figures released by Kantar analysing the UK retail market during March tell a similar tale. March 2020 proved the biggest month of grocery sales ever recorded, seeing a growth rate of 20.6%, equating to an astonishing £10.8 billion sales. To put this into perspective, the rate is higher than levels typically seen at the busiest time of the year traditionally, Christmas.

If we boil this down to shopping trips undertaken, between the 16th – 19th March, 88% of households visited a grocer, making an average of five trips during this time. Such behaviour added up to 42 million extra shopping trips in four days alone. When you look at figures like this, it’s no wonder I couldn’t find plain flour for two weeks.

Consumers who traditionally spend more than £4 billion a month on food and drink out of the home, have had to stay indoors. And much of this £4 billion is now being channelled through supermarkets.

Fortunately, the response and agility from independents and smaller, convenience stores have been fantastic, helping to serve shoppers and ease the pressure on large retailers to feed the nation.

While the UK retail industry is predicted to lose £12.6 billion in revenue in 2020 due to the impact of the pandemic, the Grocery sector is due to see unprecedented growth, with revenue up by 7.1%. Prior to the pandemic, the forecast for 2020 estimated a growth of 1.2% in Grocery.

Understanding such growth levels, and understanding that shoppers are visiting new retailers, or simply visiting alternative retailers more frequently than they did a few weeks ago, means that there is an opportunity amidst the storm.

Shoppers are purchasing more than usual and they are more open to new products than ever before, out of need as much as curiosity. The challenge for brands and retailers when a sense of normality returns to the nation is to continue to leverage the awareness and demand for that one SKU that might have surged, that one category that might have gone through the roof, or that one retailer who’s performed phenomenally well.

As soon as a sense of routine befalls shoppers, be it within a way of shopping (for example shopping for groceries online), any of the previous barriers that may have existed are quickly broken down. And, the same can be said for alternative products that shoppers have now been forced to purchase because their usual type of pasta sauce has run out. Or in my case, flour.

For the categories that are currently thriving: Frozen, BWS, Grocery; retailers need to provide an opportunity for brands to maximise the surge in category awareness. And brands need to maintain investment in awareness of their categories and their brand, in order to respond in a way that will support long term growth in the years beyond the 2020 pandemic. The lockdown state we’re all currently experiencing is short-lived in the grand scheme of things. But, if retailers and brands can work hard to collaborate, today’s thriving categories have a better chance of continuing to thrive tomorrow.