Food sector remains a bright spot as retail sales slump

The Covid-19 pandemic continues to take a toll on the retail sector, as the latest data from the Office for National Statistics reveals that 2020 saw the largest annual fall in retail sales on record.

Although sales volumes rose by 0.3% in December, for the whole of 2020 they fell by 1.9%. Food stores bucked the trend, however, with an annual growth of 4.3%, the highest yearly growth since 2001. “Anecdotal evidence from retailers suggested that click and collect and online services had boosted sales, as did the ability to remain open while other sectors were closed because of their classification as non-essential retailers,” the ONS said.

Non-store retailers, which predominantly consist of online shops, saw the biggest year-on-year growth, reporting an increase of 43.5% in sales. Online food store sales rocketed, with year-on-year growth in December of 126.4%

Across the whole of 2020, online food sales rose by nearly 80%. “Retailers’ feedback suggested a change in consumer habits caused by the coronavirus (COVID-19) pandemic, with a sustained and significant move to click and collect orders,” the ONS reported.

Nick Brackenbury, co-founder of British retail technology business NearSt told Speciality Food that the pandemic has opened up new opportunities for nimble shop owners. “In our data, we’ve seen a 4x growth in shoppers going online to search for product availability in their local stores; people using the web to shop in physical stores.”

NearSt works to boost local shop sales by making products on physical store shelves visible to shoppers searching online nearby. “We’ve also seen local retailers using our live product availability data to set up services like local delivery and click-and-collect to better serve their local community,” Nick adds. “The technology is helping shoppers realise that buying local is often faster and easier than ordering on Amazon and is providing a welcome boost for local shops throughout the UK.”

This points towards an even brighter future for food retailers: “The pandemic has sparked both a shopper trend towards localism and a surge of innovation from retailers,” Nick says. “Together these two trends give us great confidence for retail in 2021.”

Boosting jobs in the food supply chain

The food industry is seeking to take advantage of its strong performance compared to other sectors by helping with the UK’s unemployment crisis. The unemployment rate has hit 5% for the first time in more than four years, according to official figures, and the Centre for Retail Research expects the UK’s retail sector to report 200,000 job losses over 2021 as Covid continues to impact the sector.

Food and Drink manufacturers are offering hundreds of job placements to young people as part of the government’s Kickstart scheme. The Food and Drink Federation (FDF) and the National Skills Academy for Food & Drink (NSAFD) announced that 400 young people will receive a six-month job placement through the programme, which can potentially lead on to apprenticeships.

As the UK’s largest manufacturing sector, food and drink manufacturing has played an important role throughout the pandemic, and it is hoped that the scheme will help the young people who lost jobs in retail and hospitality over the last year.

Ian Wright, chief executive of the FDF, said the programme will offer “real pay and real workplace experiences. That combination offers an excellent way to kickstart their careers.”

“It’s great to see food and drink manufacturers rallying together to offer 400 young people vital opportunities to gain key industry experience and training,” added minister for employment Mims Davies MP. “This demonstrates how our Plan for Jobs is helping people back into work and vitally supporting employers in high demand and key growth sectors to recruit, as we push to build back better and level up opportunities across the country.”

Although the pandemic continues to cause economic disruption, the food sector is working to play a positive role in the UK’s Covid recovery.