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Summary
- Shopping trends are returning towards normality as lockdown eases
- People have witnessed negligible disruption in the supply of essentials, and there is no panic buying
- Retailers have now reopened all their stores for the public with enhanced safety protocols
UK has been doing well in terms of keeping the reproductive rate (R) of the deadly virus less than one. Earlier this month, the majority of the businesses have recommenced operations in line with the sector-specific guidance rolled out by the British government.
Theoretically, as the lockdown is lifted, the economic activities should gradually regain the pre-pandemic levels. But that is not the case, people still fear the risk of getting infected by Covid-19 and purposely avoid going out for shopping, public squares, or mass gatherings.
Recently, the Chancellor of the Exchequer, Rishi Sunak incentivised the Britons to ‘Eat out to Help out’, to kickstart the bars, pubs, and restaurants by offering them big discounts in return. This move was not only aimed at boosting the local economy but also to boost consumer confidence to go out while adhering to social distancing guidelines and other precautions.
Even though the lockdown has been lifted, and most of the businesses are up and running, UK grocers witness a slump in sales in comparison to previous months. According to Kantar, a market research firm, consumer behaviour has been returning to pre-pandemic levels. The sales numbers have declined substantially in recent months.
Also read: Drop in retail sales for May less than that in April, with easing lockdown restrictions
With the passage of time, people are expected to resume their pre-Covid routines lifestyle patterns and shopping habits as most of the retailers, including high-street retail, have now recommenced operations post the coronavirus induced lockdown.
According to a leading market research firm, the average footfall in the supermarkets has decreased by 15 per cent, while the expenses have risen by 35 per cent in the recent times compared to the same period last year. People still prefer to stay indoors, and normality still seems a bit distant. In addition, most of the consumers have migrated to online platforms for their shopping needs.
A considerable chunk of these online sales was made up of grocery orders. Grocery is a part of the essential items required by all. Due to the economic impact of the novel coronavirus, people have witnessed a lot of job redundancies or have been furloughed and are still expecting a call from their respective employers. People are currently in mode to save as much as they can and are only ready to spend on necessities. Given the plethora of uncertainties with respect to Brexit and Coronavirus pandemic, the inflation is expected to kick in by the end of this year (2020).
Also read: UK retailers to come together to provide for the nation during the Coronavirus pandemic
UK Grocers amid the lockdown
UK grocers’ sales skyrocketed during the unprecedented crisis. The only method to contain the spread of the pandemic was to impose lockdowns and put travel restrictions. People were asked to avoid going to mass gatherings and practice social distancing (keeping 2-metre distance from another person), and were advised to stay at home. All the retailers were asked to shut shops amid the lockdown. Only the retailers which dealt in essentials category could operate during that period. The Food & Drug retailers are in great demand amid the coronavirus crisis. Food stores and non-store retailing were the only sectors to show growth during the unprecedented crisis.
The retailers witnessed a huge surge in demand for the food staples, processed foods, Personal care, Household products and Home Entertainment in the lockdown induced by the pandemic. They also witnessed panic buying and stockpiling done by people as the tenure of this lockdown is still not known. Panic-buying is self-perpetuating and triggered by seeing people shopping in bulk quantities and empty shelves as they are not sure when this unprecedented crisis would stop and also limit themselves from going out frequently.
Due to panic-buying caused by the Covid-19, the British retailers had imposed purchase limits on essential items on categories such as food, medicines, and hygiene products category to make sure everyone gets access to these items. Moreover, there was a substantial lift in freezer sales, which nearly doubled year on year, according to media reports. People were conscious of increasing their storage capacity amid the novel coronavirus fears by buying chest freezers and under-the-counter freezers.
While other sectors were witnessing a layoff and many employees being furloughed or being asked to volunteer for the job retention schemes announced by the British government. The British retailers went on a hiring spree during the unprecedented crisis to cater to the enormous surge in online orders.
The retailers have now reopened all their stores for the public with enhanced safety protocols. These safety protocols include, people visiting stores in batches so that physical distancing can be maintained. The stores are equipped with Perspex screens at billing counters to minimise contact and are sanitised regularly. Also, people have been advised to switch to non-cash methods of making payments. The retailers allow people to shop in batches during their visit to stores.
Due to the increase in the online capacity, Tesco Plc (LON: TSCO), one of the UK’s prominent retailer, recorded higher sales volumes during the first quarter of 2021. The total sales of Tesco Group surged by 8 per cent to £13.38 billion during the 13 weeks ended 30 May 2020. The company nearly doubled its online capacity from 0.6 million to 1.3 million slots per week.
Another well-known retailer, WM Morrison Supermarkets Plc (LON:MRW) recorded a sales growth of 5.7 per cent (on Like-for-Like basis excluding fuel) during the first quarter of 2021. The company was accepting orders through telephone and has delivered doorstep delivery of groceries during the unprecedented crisis. The company has also partnered with Amazon Prime to service most of the cities in the UK. In addition, the company had doubled its delivery slots to service online orders.
It seems like the sales have dropped for the British grocers. However, it is not actually a dip. People were stockpiling due to the lockdown induced by Covid-19. From 4 July onwards, most of the stores have reopened as lockdown is lifted. People have no reason to buy in bulk quantities for now as the coronavirus cases seem to be in control in the UK. Most of the economic activities have now resumed, and people are expected to return to normality, so the frenzied buying has stopped, returning to the normal.
