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UK’s grocery sales growth slows as lockdown eases (but online soars)

UK grocery sales grew 14.4% in the 12 weeks to Aug 9th, marking a slight decline from last month’s data as shopping habits eased back towards normality after months of pandemic lockdown, according to new data.

UK's grocery sales growth slows as lockdown eases (but online soars)

The research, from Kantar, indicates that growth was down from 14.6% in its July report and 18.9% in June’s, with the data showing the market is moving away from the heady sales heights of the lockdown period. One of the most significant lockdown trends, online shopping, reached another new record market share in the latest four weeks, with 13.5% of all sales now ordered through the internet, the researcher said. Brits’ grocery spend of £9.7bn over the past four weeks was the lowest since February, though still considerably higher than pre-pandemic levels.

“While things are far from normal, the data shows a gradual softening of the more extreme lockdown trends in the grocery market,” said Charlotte Scott, Kantar’s consumer insight director.

Online grocer Ocado was the standout performer with sales growth of 45.5%, registering a record market share of 1.8%.

Morrisons, Britain’s No. 4 supermarket group, was the best performer of the country’s big four grocers with a sales rise of 16%.

Market leader Tesco saw growth of 12.8%, followed by No. 2 Sainsbury’s with growth of 10.9%. Walmart owned Asda was again the laggard with growth of 9.5%. Asda reports second-quarter results later on Tuesday.

German owned discounters Aldi and Lidl had sales growth of 12.7% and 15.7% respectively, though the former again lost market share. Rival researcher Nielsen also highlighted slowing sales growth in its August report.

Tim Reay, Head of Grocery at Wunderman Thompson Commerce, said: “The slight drop in the rate of growth across grocery was to be expected as supermarkets adjusted to the new shopping habits that have developed. The 14% sales increase is in fact an unprecedented leap and a result of non-essential stores being closed, fewer people going out and a greater share of the market as people minimise physical shopping trips. Morrisons and Tesco in particular – the two stand out performers with a 16% and 12.8% sales increase – will want to capitalise on consumers’ desire to purchase one big shop for the week instead of multiple smaller visits, while continuing to champion safe, Covid-19 friendly measures.

“Yet there is another, more defining challenge on the horizon; after much consideration, Amazon is stepping up its expansion in the UK with a nationwide rollout of its online grocery service at the end of 2020. Bigger orders placed on Amazon Fresh will become commonplace and most importantly free to Prime members – with the majority (55%) of UK consumers Prime subscribers, supermarkets will face renewed pressure to compete with a service as wide-reaching as Amazon’s. Fear of contracting the coronavirus will also play its part in driving online spend with 48% of shoppers scared about in-store shopping.

“Part of Morrisons’ success could be down to its expanded Prime Now grocery delivery service, which now covers 90% of Greater London and even more cities across the UK. However, while Tesco is fighting back by taking on Amazon Prime by offering free home delivery for its premium loyalty scheme members, it looks likely that the ‘Big Four’ will become the ‘Big Five’ thanks to a predicted 33% increase in online grocery shopping and Amazon’s vast customer base.”

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