“Unprecedented surge in food demand” while retail sales plummet, reports BRC

16 Apr 2020 --- UK retail sales have declined 4.3 percent over a span of five weeks during the coronavirus crisis, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor for March 2020, marking an historic low. This is the sharpest decline since 1995, and as the British government enforced lockdown measures, a stark contrast in sales before and after the restrictions were put in place became evident. However, the initial period of lockdown and quarantine measures led to an “unprecedented surge” in demand for food. This was evident at the time when supermarket shelves were stripped as panic buying spread around the country. 

Last month, the BRC emphasized that supermarkets were working round the clock to help consumers get the products they need by trying to keep shops well-stocked and deliveries running as smoothly as possible. 

UK food retailers wrote a joint letter to shoppers in the wake of the pandemic to reassure them about the extra steps being taken and called on them to be considerate in the way they shop, discouraging stockpiling and panic buying, which was apparent in many supermarkets across the country. 

At the time, Helen Dickinson, OBE, BRC Chief Executive said, “In the face of unprecedented demand as a result of coronavirus, food retailers have come together to ask their customers to support each other to make sure everyone can get access to the products they need.”

Meanwhile, food policy experts from a UK university warned that the UK’s supplies of fresh fruit and vegetables could be severely disrupted by the crisis. They also explained how supermarkets’ move to “just-in-time” supply chains severely dented their resilience to cope during unprecedented times.

The latest figures cover five weeks from March 1 to April 4. The first three weeks of March saw retail sales grow by 12 percent but declined 27 percent in the last two weeks of the period. Over the three months to March, food sales increased 4.9 percent on a like-for-like basis and 5.1 percent on a total basis. This is higher than the 12-month total average growth of 2.4 percent.

In March, UK retail sales decreased 3.5 percent on a like-for-like basis from March 2019, when they had decreased 3.5 percent from the preceding year. 

“In March, the necessary measures to fight the spread of coronavirus led to the worst decline in retail sales on record. Furthermore, the headline figure masked even more dramatic swings: food and essentials faced an unprecedented surge in demand in the early part of March, only to drop significantly into negative growth after the lockdown and introduction of social distancing in stores,” Dickinson explains. 

“Retail sales experienced an historic drop in March, with COVID-19 changing the consumer landscape significantly. UK lockdown has prompted a fundamental rethink of what is deemed essential. Total sales may ‘only’ be down 4.3 percent, but the sharp divide between food and non-food, and between physical and online, is far more drastic,” Paul Martin, UK Head of Retail at KPMG, a global network of professional firms providing audit, tax and advisory services comments. 

“The crisis continues; the retail industry is at the epicenter and the tremors will be felt for a long while yet,” Dickinson stresses. “At the same time, supermarkets brace themselves for lower sales, while still spending huge sums on protective measures, donating to food banks and hiring tens of thousands of temporary staff. We welcome the government’s actions to date, yet millions of livelihoods rely on their continued support.”

Commenting on the food and drink sector performance, Susan Barratt, CEO of IDG, a research and training charity for the food and consumer goods industry, says UK grocery retailers faced an unprecedented series of challenges in March. Along with suppliers and logistics partners, they have been critical during the coronavirus outbreak, ensuring consumers have access to food, as well as supporting vulnerable groups in society. “Shoppers are recognizing and appreciating these efforts, with trust in the food industry to support local communities up by 4 percent from February,” she notes. 

“As well as tackling the immediate challenges of COVID-19, retailers need to have an eye on the future. Our data shows a significant decline in shopper financial confidence, with 39 percent expecting to be worse off in the year ahead compared to 27 percent in February, indicating the rest of 2020 may be a bumpy ride for many,” Barratt details. 

“Staying home has seen a surge in sales of food and beverages, and unsurprisingly health-related goods too. Yet high streets are completely void of footfall and non-food categories like fashion have been forced into hibernation. ,” Martin concludes. 

For more coronavirus-related stories and information, readers may visit our new daily news feed entitled “COVID-19 updates,” for relevant insights needed to guide your business through this challenging period. 

Edited by Elizabeth Green

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