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You sweat over the right mix of fresh and frozen, and pray for a decent turnover of stock before a huge tranche of store cupboard items hit their BBE dates, but is it time non-food items did a bit more heavy lifting in your shop? Here are some big macro trends affecting your customers’ spending habits.
Opportunity 1: home and garden wares
It doesn’t take a retail genius to work out why homewares have been such a runaway hit in the pandemic era. Whether locked down, isolating, ill or working from home, the nation has spent a huge amount more time in the house, and the shift is predicted to last. Analysts at Mintel have noted a sharp rise in the number of UK households spending money on their homes, whether to improve living areas or adapt spaces to working from home, and your customers will be part of this homeware-hungry demographic. Outdoor living has been a big trend, with research from Statista suggesting the 53% of the Brits spending more on DIY and their homes after lockdown see this as their top priority. It’s no surprise; continued uncertainty around the trajectory of Covid cases and restrictions makes outdoor eating and entertaining an attractive option. Barbecues, premium shatterproof serveware, candles, all-weather cushions and lighting are all great, food-adjacent products that will be in big demand as the weather warms. Add in the ongoing trend for novice gardeners to have a crack at growing veg, and everyone with an outdoor space to start seeding wildlife areas and you have a heady mix of opportunity to grow gardening sales.
“The spotlight the pandemic has shone on outdoor areas will continue to drive sales of garden furniture, heaters, lighting and outdoor dining,” predicted Mintel analyst Marco Amasanti last April. “There will also be a great opportunity for garden makeovers, conservatories, and a significant new opportunity for garden rooms, which offer a comparatively affordable means of adding living space to the home, whether as a place to work, exercise, entertain or for storage.” Testing customers’ appetite for homewares that fit with your brand (whether that’s a range of rustic, handmade local ceramics or highly decorative Middle Eastern storage jars) is a no brainer.
Takeaway: sourcing home and garden wares from local makers or distinctive international markets will amplify the high quality, provenance-strong essence of your shop’s ethos.
Opportunity 2: posh pet food
Here’s another incredible stat from these strange times: 3.2 million households have acquired a pet since the start of the pandemic, taking the UK total to 34 million homes (or 59% of the UK total) hosting animals. With more people than ever working from home, and finding themselves in a position to accommodate a pet, the UK market for pet food has grown to £3.2bn, according to the Pet Food Manufacturers’ Association (PFMA). Feeding these extra mouths every day makes pet food a big convenience buy, but research suggests pet food is increasingly moving into the premium sphere, with Mordor Intelligence citing ‘pet humanisation’ leading to “the commercialisation of human-like goods and services for pets such as pet food, which is acting as a major driver behind the growth of this market.”
Mordor identifies a trend for owners to apply their own food standards to their pets’ diet. This increasingly means fresh food, or dried foods with strong focus on quality and health, are trending. Start-ups like Butternut Box, which secured £20m investment in 2020, are proving that fresh, human-grade foods have a huge appeal for devoted pet lovers. Interestingly the biggest spike in ownership is among millennials, driving demand for natural, plant-based and ethical pet foods (including insect protein). According to figures from Mintel, 72% of consumers who purchase food for their dogs and/or cats sometimes treat their pet to premium pet food, and Mintel sees the opportunity for retailers to tap into “nascent markets, such as plant-based, grain-free and raw food diets. The demand for these is clear… moreover, interest in these will only grow with the mounting recognition of wellbeing, highlighting an opportunity moving forward.”
Takeaway: with human and pet tastes reportedly converging, your reputation for top-quality foods makes you a trusted retailer for premium pet foods.
Opportunity 3: eco consumables
If you haven’t already started stocking the environmentally-sound FMCGs that more households are hankering for, where have you been?! Household consumables – cleaning products, sanitary ware and beauty goods – with a strong environmentally-friendly selling point could be the perfect additions for add-on sales. Why? According to consumer spending experts Kantar, ‘eco actives’, the UK’s most environmentally-conscious demographic, are growing in number and are now worth £37bn to the British grocery market. Meanwhile, numbers of ‘eco dismissers’ – consumers who don’t take active steps to reduce their impact – are dwindling, creating a clear sales opportunity for ranges with an authentic eco angle.
This macro trend is shaping food and drink sales (both Meridian and Brewdog have seen big brand growth thanks to their well-signposted eco credentials) but it applies to non-food groceries too. Kantar finds plastic waste is the number one concern for this population of shoppers, and on-pack messaging around recycling is a top concern. Meanwhile Insider Intelligence has labelled making addressing consumers’ preference for sustainability a high priority for retailers in 2022. Adding in a few sundries lines that tick the right boxes could really make a difference to the average transaction value in your store.
Takeaway: Kantar predicts 62% of the population of Great Britain will be an ‘eco active’ by 2030, so grabbing every opportunity to cater to their needs is a smart move.
Opportunity 4: cut flowers
The meteoric rise of seasonal blooms can be witnessed in the growth of a number of phenomena. Firstly, subscription models; last year Freddie’s Flowers won $60m investment for its £25-a-bunch mail order, and a host of similar businesses have sprung up to meet blossoming demand. Secondly, regional flower farms. While around 80% of UK cut flowers are imported, mostly from the Netherlands, umbrella organisation Flowers From The Farm has seen its membership of UK flower farms and florists grow by a whopping 75% in the last two years. Local, seasonal bouquets or bunches, often certified organic or boasting other sustainable credentials, are proving a massive hit in the age of self-care. Indeed, around 60% of the £2.2 billion spent each year relates to people buying flowers and plants for themselves, and for their own homes, says the Flower & Plants Association.
Takeaway: Mintel found average household expenditure grew to £18.70 on flowers and £24.80 on houseplants in ‘20/21, proving this category’s value even when the cost of living is rising.
Opportunity 5: local merch
‘Re-localisation’ has been a strong trend in the last couple of years as travel restrictions and public health uncertainty has seen Brits explore destinations on their doorstops. Rediscovering local heritage, as well as local businesses that carry cache in their own community, has seen a refocusing of consumer horizons, and a new opportunity to grab unused holiday budgets. What’s more, VisitBritain has forecast a recovery for domestic tourism spending in 2022 after a tough couple of years, and while inbound tourism hangs in the balance, there’s a great opportunity to grab add-on sales with locally-specific merchandise. Local artwork, community-branded tote bags and even artist-designed tea towels will appeal to staycationers with excess holiday spending to splash. Meanwhile ‘self-gifting’ is a strong trend spotted by Mintel this Christmas; it found a quarter of Brits splashed out on goodies for themselves, but this figure rose to a massive 42% among 16 to 24-year-olds, so house-branded goods – tote bags, mugs and even T-shirts – could work if your business has a cult following.
Takeaway: tempt customers to flaunt their love for local with beautifully-designed goods that sing their provenance.