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Here’s what Covid-19 has done to shopping habits

We bring you a look at the overall trends in UK shopper behaviour since the coronavirus lockdowns began, along with a forecast of what the future might hold.

Since the coronavirus lockdowns began there has been a £3bn growth in the UK grocery retail channel

Following a webinar hosted by the UK arm of Concha y Toro (CyT) on 2 June, we pick out the key findings concerning the public’s response to the pandemic, from panic buying, to changes that are believed to last well into the future, such as purchasing more groceries online, or entertaining at home.

And, we consider what such developments will mean for the wine trade.

Initially, it was pointed out by CyT UK’s category and insights controller, Alexandra Price, that the scale of lost turnover in the hospitality sector due to the coronavirus lockdowns is not being compensated for by the growth in the grocery sector.

Noting that the lockdown in the UK has resulted in the contraction of the hospitality industry by 21.3% in the first quarter of 2020 alone, she said that over the same period the grocery retail market has grown by 11.3%.

This translates into £9 billion in lost revenue in the hospitality sector, compared to a £3bn growth in grocery retailing.

In terms of overall retail trends in the grocery sector, there have been swings in sales performance, starting with stockpiling and panic buying, and further fluctuations due to the timing of Easter this year – although since the end of April, the trend has been more stable, with growth levels remaining around 9-10% on a weekly basis (see the graph below).

Source: Nielsen Scantrack Data to WE 16.05.20

The fastest growing channels have been online grocery and the convenience sector, with sales online now representing a share of 12% of the entire grocery sector, up from 7.5% last year.

It has been well documented that shoppers have made a big shift to online grocery to avoid going to shops during the Covid-19 crisis, with 20% of customers now buying their groceries online.

However, the online channel could have been even bigger.

As price pointed out, “One in five shopped online, but 40% of people would have shopped online had the delivery slots been there.”

Continuing, she said that “Online now has the opportunity to really grow.”

For all the key channels, she stressed that people are shopping less frequently, but buying more when they do.

Source: Kantar FMCG panel, latest 4 weeks to 17.06.20 vs year ago

In terms of shopper sentiment, as the lockdown has progressed, she recorded a shift from health concerns to economic ones.

“The concern for health is softening, as is the concern over scarcity of food, but the concerns for the economy are rising the longer the pandemic goes on,” she said.

According to Kantar’s Covid-19 Barometer, two thirds of people surveyed are already feeling the financial impact of the coronavirus in the UK – 8.4 million people have been furloughed – although 1/3 said that the pandemic would “have no impact on my income”.

Price then cited research from Publicis to show that shoppers are experiencing “an array of emotions”, with 53% of those surveyed feeling “anxious”, 52% “frustrated”, 37% “stressed”, and 21% “bored”, while 15% are actually “content” at home – the lockdown has given them time to slow down and relax.

“There are a wide array of emotions, not just concern,” she commented.

She then addressed the issue of the future, and warned against banking on a rapid return to normality.

“A 35% contraction in GDP for quarter 2 is expected, and with historic pandemics, the recovery has been V-shaped, but that’s not guaranteed,” she said, showing GDP trends back to the turn of the last century, including the impact of both World Wars, along with the Spanish flu – which you can see below.

Source: Bank of England ONS OBR

She also said that there are factors from the current crisis that make it different to the global financial crisis of 2008-2009, most obviously the worries around health for ourselves, family and friends as well as the restrictions on movement due to social distancing measures.

But even after lockdown, and once restaurants, pubs and bars re-open, Price showed YouGov polls showing that more than 60% will be “uncomfortable” visiting them.

“Until a vaccine is found, they are saying there will be a level of nervousness,” she recorded.

This trend will mean that the drinks trade should expect the current trend of fewer trips but larger shops to continue, which means that multi-buy promotions could be more effective, even though people’s spending power will be reduced by the pandemic.

It’s also expected that the on-trade will be affected by the economic contraction, because, as discretionary spending power declines, people are likely to hold social occasions at home – even though they can go out.

In other words, a combination of economic and health concerns will hamper a recovery for the on-trade.

For both groups, it’s expected that in-home dining occasions will grow over the long term therefore increasing the take-home grocery spend. ‘Insulated spenders’ represent 3 in 10 shoppers, while ‘constrained spenders’ represent 7 in 10. 
Source: Nielsen – What’s next for shopper behaviour

Key findings from the Concha y Toro webinar

  • Hospitality sector: down 21% (representing a decline of £9bn)
  • Grocery retail sector: up 11% (representing an increase of £3bn)
  • UK grocery growth levels: 9-10% on a weekly basis
  • Online share of the grocery channel: 12% (up from 7.5% last year)
  • 1 in 5 now shop for groceries online (but it could be double that number)
  • 2/3s of Brits are already feeling the financial impact of the coronavirus 
  • 53% of UK public are feeling “anxious”, 15% are “content” during lockdown
  • 60% of people say they will be “uncomfortable” visiting restaurants, bars and pubs post the lockdown

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