Trust in retailers soars as consumers stock up

Localised lockdowns have revealed a deep level of trust between grocery retailers, their consumers and the surrounding SME ecoystem.

An additional €19m has been spent on groceries in Ireland in the past month compared with the same period in 2019, new research from Kantar reveals.

The localised lockdown in Dublin and the spectre of more to follow across Ireland in the face of rising Covid-19 infections is top of consumers’ minds.

“There are tentative signs that the market may accelerate again in the short term, as local lockdowns take effect around the country”

Kantar has reported that take-home grocery sales growth in Ireland slowed to 13.7pc year on year during the 12 weeks to 6 September 2020, the latest figures reveal.

“Slowing growth suggests shoppers are starting to return to more normal habits following the unprecedented spending seen during the height of the pandemic,” said Kantar business development manager Emer Healy.

“However, there are tentative signs that the market may accelerate again in the short term, as local lockdowns take effect around the country.

“Grocery sales over the past 12 weeks remain significantly higher than pre-pandemic levels, but compared with April and May shopping routines are much closer to what we would usually expect. For example, people are visiting grocery stores more frequently than they have since June, at an average of 19 times over the course of the past four weeks, indicating an increased sense of security among shoppers since face coverings were introduced at the start of August.”

Online shopping at all-time high

Kantar reported that the popularity of online grocery shopping continues, and online sales grew by 121.7pc over the latest four weeks. This represents another month of record-breaking growth for the online channel and digital sales added €72.9m to the total market in the latest 12 weeks.

New shoppers accounted for almost a quarter of the €133.6m spent on online groceries during that time. Boosted by comprehensive online offers, SuperValu continues to grow ahead of the market and holds the biggest share of spend at 22.1pc, while Tesco registered a 21pc market share. Higher average prices and larger trip size drove growth for Tesco this period.

“All the retailers benefited from the reopening of schools this September, which was a significant step toward normality after an extraordinary summer,” said Healy.

“Parents preparing for their children’s return to the classroom stocked up on easy breakfast and packed-lunch options, with sales of baked morning goods up 11pc and lunch box staples like yoghurt drinks and juices growing by 17pc. One marked difference this year is that facial tissues and wipes have become a must-have for children’s backpacks, growing by 2pc and 15pc respectively.

“With many returning to the school run and the office commute, easy and convenient dinners are firmly back on the menu. Shoppers spent an additional €6.8m on chilled convenience products, €2.7m on ready meals, and sales of frozen prepared foods soared by €9.7m year on year.

“Dunnes in particular cashed in on the back to school trend as households with children increased their spend in the store by 9pc and the grocer performed the best of all the retailers in sales of many typical packed lunch items. Dunnes now holds the second highest market share of all the grocers,” said Healy.

Trust is a priority for retailers and consumers

“I expect greater collaboration/partnership between grocery retailers and food producers, restaurants and food-service operators in their locality over the coming months”

Dark haired man in suit with blue tie.

Owen Clifford, head of Retail Convenience sector, Bank of Ireland

Bank of Ireland’s head of Retail Convenience Sector Owen Clifford said that the professionalism of Irish grocery businesses served the sector well through the pandemic crisis.

“In 2020, Irish grocery retailers have adapted and mobilised their businesses to rigorous health and safety requirements to ensure the safety of their customers. This really demonstrated their agility and how well equipped they are to respond and evolve to the changing needs of the consumer in the months ahead.

“It is also generated real trust opposite the Irish consumer. It is noteworthy that when localised incidences of Covid19 started to rise again, this trust led the consumers to once again engage strongly with their local grocery outlet.  It is an environment that they feel safe in and they recognise that best practice in respect of hygiene, food provenance etc will be adhered to appropriately.”

Clifford warned the fluid nature of the current situation and the potential for future localised restrictions will again test the robustness of the grocery supply chain.

“This fluctuation in regional requirements coupled with an impending Brexit will possibly require grocery operators to put into practice contingency plans re product procurement to meet customer demand.

“Independent grocery retailers nationwide operating under the Supervalu, Eurospar and Centra brands will once again draw on their community credentials to maintain engagement with the consumer. I expect greater collaboration/partnership between grocery retailers and food producers, restaurants and food-service operators in their locality over the coming months.

“These retailers can have a proactive role in showcasing local produce/restaurants etc and ensuring an alternative income stream for local businesses hampered by Covid19 linked restrictions.

“The Irish economy is highly interconnected and initiatives that support a sustainable SME eco-system into the future will need to be encouraged and nurtured. Irish grocery retailers that play a proactive role in this regard will cement customer loyalty for their business into the future,” recommended Clifford.

Written by John Kennedy (john.kennedy3@boi.com)

Published: 23 September, 2020