A recent Novum survey (December 2020-January 2021), taken at the height of the pandemic, of European supermarkets, found that the most critical items cited for the next three years were

1. Food to Go/Convenience (40%)
2. Growing their Business (20%)
3. Online shopping (10%)
4. Experiential shopping (10%)

This survey was conducted from December 2020 to February 2021 and the impact of the pandemic can be seen when compared to the Novum 2019 survey. It makes for interesting reading as for the first time the planet plays second fiddle to other priorities such as developing the Food to Go/Convenience sector. This is despite the fact that 14% of respondents stated that their F-Gas compliance was not going well but didn’t cite it as top 3 priority and Energy usage was well down the rankings also.

A survey is just a snapshot in time and this survey was taken when there was huge uncertainty, with no vaccine available and the IPCC report on climate change was still being compiled. With the IPCC signalling alarm bells globally that climate change is “widespread, rapid and intensifying” and the only way to limit the devasting effects of climate change will be through “strong and sustained reductions in emissions of carbon dioxide (CO2) and other greenhouse gases”. With most European countries now at high levels of vaccination it will be interesting to see on the next Novum survey whether the planet will be back at top spot in regards priorities for 2022-2025.

The 2019 priorities for EU supermarkets, which was conducted pre-Covid were as follows:

1. Gas Compliance (33%).
2. Cost (27%)
3. Innovation (27%)
4. Energy Usage (20%)

The 2021 January priorities are discussed in more detail below:

1. Food To Go/Convenience

Traditional Food to Go specialists include various take away specialists such as burger and pizza take-aways along with coffee shops. A customer orders at the counter and takes the food home in a potable container for consumption.

According to the Guardian newspaper, one of the largest take-away food apps, Just Eat, reported, and increase of 76% during six months of Covid restrictions in the UK.

The Lumina Intelligence UK Food to Go market report focuses on the supermarket grab and go and convenience store grab and go sector. It predicts this sector will grow by a whopping 31.6% in the UK in 2021.

Outdoor socialising and improving weather conditions combined with a staycation culture has led to a huge shift in consumer behaviour. Consumers are now opting for outdoor eating in parks and especially in areas of natural beauty. This is very good news for supermarkets who are expanding their Food to Go presence.

In regards the bourgeoning frozen food Food to Go sector, popular products include frozen treats and ice cream. Respondents to the Novum survey cited they need flexibility and adaptability to respond to these frozen food demands.

2. Growing the Business

A recent Mc Kinsey report on the EU supermarket sector makes for very good reading for the European supermarkets as

a) Grocery spending is at an all-time high in Europe

b) Buying more expensive groceries has increased due to lower spending in other categories, many of which were closed due to lockdown

c) On-line sales have experienced a growth rate of 55% in 2020

d) Customer loyalty has diluted significantly with 31% of consumers changing where they do their grocery shopping. Of those who changed supermarkets,75% said they intend to continue shopping their post COVID-19.

According to the Mc Kinsey survey, value and convenience are the main drivers for consumers who have switched supermarkets during the pandemic.

Taking the above factors this is a great opportunity for EU supermarkets to grow the business

3. Online Sales

Mc Kinsey cites that “the key to gaining market share in the grocery retail industry lies in on-line channels. (Source: Mc Kinsey Insights, June 2021)

A separate Mc Kinsey consumer sentiment survey which was conducted globally in March 2020 found the five main themes were:

1. A migration to online shopping
2. Healthy eating
3. An increased focus on value
4. Big brand growth
5. More focus on brands with purpose in terms of corporate social responsibility and sustainability

Mc Kinsey points out some startling facts:

1. In Italy, online grocery sales increases by over 100% in one-month last year
2. In Q1, Tesco UK went from 9% to 16% of overall grocery sales online
3. 15% of the consumers in the top 5 EU countries surveyed cited they have shopped in supermarkets they never used before
4. 12% have switched grocery stores to home delivery

Of the EU-5, UK consumers are most satisfied with online grocery shopping, whereas the French and Italian consumers were least satisfied.

An article on food navigator.com in November 2020, cites that 5.9 million people in the UK were buying their groceries online and online grocery sales increased 91% in June 2020.

Post pandemic, it is hard to quantify how many new online grocery customers will stay online. The main benefit of online shopping can be summed up in one world, convenience. The advantages of in store shopping is the whole shopping experience in real-time. The Guardian reported that online grocery sales now stand at 13% in the UK. This is a significant drop from the highs of 15.4% online grocery sales in February 2020. This is to be understood as restrictions are easing and shoppers are delighted to be returning to brick-and-mortar stores. Supermarkets are now focussing on the whole shopping experience to ensure that as shoppers return to brick-and-mortar stores that they have an enjoyable and memorable shopping experience through IOT technology and sustainability initiatives.

With the gradual return to normality, shoppers are flocking to brick-and-mortar stores. In the US, a survey the future ratio will be 4:1, in favour of consumers who intend to return to brick and mortar stores. Although the majority of consumers will do their shopping in brick-and-mortar stores, online grocery shopping is here to stay.

The Novum EU supermarket survey 2021 found a significant shift in priorities for supermarkets in the next three years. This is caused by a dramatic shift in consumer behaviour due to lockdowns and safety concerns amongst consumers. As a return to pre pandemic normality is on the horizon in most EU countries, it will be interesting if the priorities shift in 2022.

Sources:

The Guardian

https://www.theguardian.com/business/2021/jan/13/just-eat-takeaway-orders-soar-on-back-of-european-lockdowns-covid

https://www.theguardian.com/business/2021/aug/17/ocado-sales-shoppers-return-pre-covid-habits-online-grocer

August Just Eat Report

https://www.theguardian.com/business/2021/aug/17/just-eat-takeaway-orders-soar-76-during-six-months-of-covid-restrictions

https://www.lumina-intelligence.com/wp-content/uploads/2020/03/FTG-Report-2021-preview-brochure.pdf

Eu Supermarket sector

https://www.mckinsey.com/industries/retail/our-insights/a-year-like-no-other-for-european-grocery-retailers-the-state-of-the-industry-post-2020

Online

https://www.mckinsey.com/industries/retail/our-insights/e-commerce-is-shifting-how-european-grocery-retailers-seek-profitable-growth

Mc Kinsey Consumer sentiment survey

https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/global-surveys-of-consumer-sentiment-during-the-coronavirus-crisis

US Online grocery shopping is here to stay

https://www.supermarketnews.com/online-retail/increased-use-online-grocery-shopping-here-stay

Online Grocery shopping

https://www.foodnavigator.com/Article/2020/11/13/Online-grocery-shopping-here-to-stay-even-when-normality-returns