Grocery channel lags (KR)
For the week ended May 9, overall CPG demand declined 4% YOY. The only channel to be up YOY was the drugstore channel. The weakest channels were grocery and the dollar stores, which were among the strongest last year, as seen in the following chart. E-commerce was the strongest channel for much of the pandemic. Since anniversarying the stockpiling period, last year e-commerce has been about average among the food retail channels. That signals that e-commerce has retained many of last year’s adoptees, but converting new customers or increasing spending has been more challenging. The grocery channel is being negatively impacted by customers making trips to other stores and picking up food items on other shopping trips – a reversal of the shopping trip consolidation trend from last year.
UK CPG demand (NOMD)
Total CPG demand in the U.K. was nearly flat YOY at -1% for the week ended May 15, as seen in the following chart. Last week roughly 68% of the country’s adult population had received their first vaccine dose. This week restaurants and bars in England were allowed to reopen with some precautions. Despite the reopening of the on-premise channel, food at home consumption remained strong with private gatherings and the cool, wet weather. Frozen food demand was down 13% against difficult comparisons, the weakest edible category. The U.K. is Nomad Foods’ largest market at ~30% of sales before the acquisitions this year.
Shift to online purchasing (ACI)
E-commerce accelerated during the pandemic as consumers avoided going inside stores. As a result, general merchandise and grocery shopping saw a significant boost. The biggest increase was from older consumers who would likely not have shifted to e-commerce if not for COVID-19, as seen in the following chart. Compared to 2019, Boomers and Seniors had the largest increase in online shopping. By income level, the lowest income consumers had the largest increase. Younger consumers and those with high incomes are most likely to shop online with “saving time” as the most often cited reason. How retailers online retain the older and lower-income consumers still needs more time to determine.
