Ocado Share News (OCDO)

(Sharecast News) - British grocery sales recorded the fastest rate of growth on record in the last three months to top £31bn, industry data showed on Tuesday.
According to the latest grocery market share figures from Kantar, take-home grocery sales rose 16.9% in the 12 weeks to 12 July, the fastest growth since records began in 1994. Total sales hit £31.6bn, as shoppers were forced to spend more on food to eat at home after restaurants and bars were closed by the Covid-19 pandemic.

In the most recent four weeks, however, sales growth moderated to 14.6% from 18.9% in June, as the lockdown was partially lifted.

Fraser McKevitt, head of retail consumer insight at Kantar, said: "As lockdown restrictions are gradually eased and non-essential retail outlets reopen, some consumers are slowly resuming their pre-Covid routines shopping habits."

But he added the UK remained "a long way off" from returning to normal shopping patterns.

"Footfall was still 15% lower during the past four weeks, and the average spend on a supermarket trip was £25.05, 35% more than the same period last year, as most people continue to eat more meals and snacks at home.

"Despite pubs, bars and restaurants re-opening, more than half of consumers say they are uncomfortable with visiting a pub, and 42% with visiting a café or restaurant."

As a result, take-home alcohol sales spiked 41% in the most recent month. Shoppers also spent an extra £24m on tea and coffee and £19m on biscuits, both of which Kantar attributed to working from home.

The online grocery sector also continued to benefit from changes in shopping habits, with sales growth of 92% in the last month. "Although restrictions have eased, more than one in five households still made an online order the latest four weeks," said McKevitt. "The channel now accounts of 13.0% of all grocery sales in Great Britain, which is up from 7.4% in March, and reflects a significant increase in capacity by the grocers."

The Kantar data echoed research from Nielsen, also published on Tuesday. The market research firm found that online share of sales accounted for 14% of all grocery spend in the UK in the four weeks to 11 July, up from 13% in the previous four weeks and 10% in May. It is the highest figure to date for UK grocery spend online.

Mike Watkins, UK head of retailer and business insight at Nielsen, said: "The stalwart of the lockdown period was online grocery, and there's no signs yet that demand will slow. Shoppers also shifted a lot of their spend to convenience channels, possibly because of the need to remain close to home during the lockdown period."

Overall, Nielsen found that that UK shoppers spent a total of £49bn on groceries, tobacco and general merchandise in the last 16 weeks. Of that incremental spend, 47% period was made at convenience stores.

Across individual operators, the big four grocers reported strong sales growth in the last 12 weeks. Morrisons was one of the biggest winners, up 17.4% according to Kantar, and the first time it has gained market share since 2015. Its market share now stands at 10.3%.

Tesco saw sales rise by 15.1%, Sainsbury's by 13.5% and Asda, owned by US giant Walmart, by 11.0%.

Other big winners include frozen food specialist Iceland, which saw sales surge 34.1%; Ocado, up 45.5%; and Co-op, which saw its market share rise to 7.2%.

Grocery inflation for the 12 weeks to 12 July was 3.6%, compared to 4.0% last month, Kantar said.