Ocado and Sainsbury’s enjoy biggest spending boost from coronavirus lockdown

Supermarkets sales continued to be boosted by the effect of the coronavirus lockdown in April, though the rate of growth has slowed from the previous month.

Sales in April were £524mln higher than in the same month last year, data from Kantar showed on Tuesday, with shop sales in the 12 weeks to April 19 up 9.1% year on year. 

Total grocery market growth of 5.5% over the past four weeks compared to the 20.6% that Kantar reported in March.

Of the big four supermarkets, leader Tesco PLC (LON:TSC) saw growth in spending of 7.2% over the 12-week period, compared to 5.5% in March’s report.

Again, this was slower than J Sainsbury PLC (LON:SBRY), where spending was up 8.4% compared to this time last year, up from 7.4% a month ago. 

WM Morrison Supermarkets PLC (LON:MRW) saw an increase of 4.3% compared to 4.6% in the 12 weeks to March’s tally, while Asda’s spending growth rate declined to 3.5% from 4.9%.

READ: Tesco warns coronavirus shopping boost will be “largely offset” by extra costs

A shift to households making fewer trips to stores and a rise in online grocery shopping were two of the shopping habits that have understandably changed under lockdown, with the joint venture between Ocado Group PLC (LON:OCDO) and Marks & Spencer Group PLC (LON:MKS) seeing growth of 19.4%.

Online sales now account for 10.2% of total grocery spending, Kantar calculated, up from 7.4% a month ago.

With older people encouraged to stay and home due their higher risk from coronavirus, and being given priority in the digital shopping queue, there has been a continued increase in their use of online shopping, with over-65s spending 94% more on grocery deliveries than they did a year ago.

Tesco boss Dave Lewis told the BBC that Tesco has made more than 1mln online deliveries in a week for the first time and was planning to add a further 200,000 slots over the next ten days, in particular for vulnerable customers.

Convenience stores – both those run by independents and by the major grocers – are also thriving as people shop closer to home, said Kantar’s head of retail and consumer insight, Fraser McKevitt. 

“Convenience stores increased sales by 39% in the latest four weeks, now accounting for 16.3% of the market compared with 12.4% a year ago. It should be noted, however, that this rise may be offset by the downturn in on-the-go consumption, which will have had a disproportionate effect on convenience shops.”

While grocery sales are high, McKevitt noted that there are still challenges for supermarkets: “People are spending more time at home and eating fewer meals out of the house, which has led to strong growth in take-home grocery sales. 

“But social distancing also means that expenditure on other categories like clothes, food bought on the go and general merchandise will have been considerably lower, so for some retailers, the overall picture will be more modest.”

The FTSE 100 grocers’ shares were in the red by mid-morning on Tuesday, with Tesco down 0.4% at 234.3p, Morrisons down 0.5% to 185.25p and Sainsbury’s down 1.4% to 198p.

Ocado was up more than 1% to 1,676.5p, while M&S was up 0.25% to 94.6p.

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