Free digital copy
Get Speciality Food magazine delivered to your inbox FREEGet your free copy
Food sales rose 2.9% in August, compared to the same period last year, data from The British Retail Consortium and KPMG shows. However, the monthly monitor revealed that this was below the 12-month average growth of 14.4% as shopping habits returned to normal post-lockdown.
“Food and drink sales in August were broadly flat on 2020’s performance, with some spending switching from retail back into the out-of-home (OOH) sector,” said Susan Barratt, CEO of IGD. Research from Kantar found that the global OOH sector recorded 12% growth year-on-year in the second quarter.
But despite OOH total quarterly sales reaching a whopping $30.7bn, and sales in the UK rocketing by 176%, in-home consumption has retained its lockdown gains, Nuria Moreno, Kantar’s global director of OOH and usage panels, said. Snacks and non-alcoholic drinks proved popular in the OOH category, but the biggest winners were coffee (up 150%) and soft drinks (up 63%). Susan added that UK food sales were helped in August by holidays around the UK. “Despite sales being limited by the dull weather, they were supported by staycations and the late summer Bank Holiday, which helped sales show a small amount of growth.”
IGD’s data also revealed that shopping habits are changing. “With much of the economy now open, more shoppers are changing what they spend their money on,” Susan explained. “Some 73% have spent more on products and services in August, compared to 69% in June’21, and 31% are spending more on eating and drinking out, compared to 22% in June’21.”
Kantar noted that the Horeca sector, which includes bars, cafés and coffee shops, is the channel with the biggest opportunity to rebuild its value share post-lockdown. In the UK, this has already begun, with value sales growing a significant 440% in the UK during the second quarter.
To learn more about running your café in 2021, download a free copy of Café Buyer.
Despite the challenges they face today, UK businesses are more confident than they have been in more than four years, a survey by Lloyds Bank Business Barometer found. IGD’s Shopper Confidence Index also continued to hit one of the highest levels in the last five years. Confidence among younger shoppers has increased for the first time since April 2021, and overall financial confidence remains relatively high, with 24% expecting to be better off in the year ahead.
The August Shopper Confidence Index also revealed that the K-shaped recovery is widening. What’s more, concerns around inflation could chip away at high confidence levels. IGD’s ShopperVista revealed that 79% of shoppers expect food and grocery prices to get more expensive in the year ahead.
“The continued rise in inflation concerns is likely to lead to a sudden return to risk-aversion and more value-seeking behaviour, particularly among families who are hard-pressed financially,” said Simon Wainwright, director of global insight at IGD. “Retailers will need to pay close attention to the widening K-shaped recovery; lower affluent families will increasingly seek out value, so special offers, everyday low prices and visits to discount stores will become prominent,” he said.
On the reverse, where fine food independents are concerned, the consumers with more cash to splash will continue to seek out higher-quality products. “More affluent shoppers will continue to trade up and focus on quality due to increased disposable income created by pent-up savings,” Simon said.
Stay connected and receive the latest news, analysis and insights from our industry's top commentators