Shoppers spend less as they take advantage of Eat Out to Help Out

Shoppers spent £155m less in supermarkets in August following the launch of the Government's Eat Out to Help Out scheme as people returned to pre-Covid routines, according to the latest research from Kantar.
Morrisons was the best performer out of the big fourMorrisons was the best performer out of the big four
Morrisons was the best performer out of the big four

Shoppers spent £155m less in supermarkets in August following the launch of the Government’s Eat Out to Help Out scheme as people returned to pre-Covid routines, according to the latest research from Kantar.

Take-home grocery sales rose 10.8 per cent over the past 12 weeks, but growth slowed to 8 per cent in August.

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Seeing colleagues, friends and family in person again meant a lot of people stepped up their grooming routines, boosting sales of hair styling products by 17 per cent and hair removal treatments by 11 per cent.

Kantar said online grocery growth in the most recent four weeks slowed for the second month in a row to 77 per cent as people ventured out more and shielding came to an end for many.

Sales at Co-op rose 13.4 per cent in the 12 weeks to September 6, but they rose by more than double that in the North, where local lockdowns mean consumers are staying closer to home.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Grocery growth tailed off in August as the Government’s Eat Out to Help Out scheme got underway and people were encouraged to return to offices and resume normal routines.

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“Diners’ confidence built throughout the month and footfall increased during each week of the scheme, culminating in the final bank holiday Monday when dining out accounted for a two and a half times greater share of consumer spend than the pre-Covid average.

“Fewer meals eaten at home meant consumers spent £155m less in the supermarkets in the four weeks to September 6 compared with July.”

When asked whether grocery sales will pick up now that Eat Out to Help Out scheme has ended, Mr McKevitt said: “There are two competing forces here. There is the fact that if people are eating out less, they will have to eat in the home again.

“The competing force is the return to more normal working and living patterns, with the likes of children going back to school and people being encouraged to return to offices. The short answer is, it remains to be seen.”

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Alcohol sales dipped month on month, with wine down 5 per cent and beer down 10 per cent, as the scheme encouraged people to swap Zoom catch ups for their favourite bars and restaurants.

Once again, Bradford-based Morrisons was the best performer out of the big four, with sales rising 12.9 per cent. Market leader Tesco saw a 10.5 per cent increase, followed by Sainsbury’s (up 8.0 per cent) and Leeds-based Asda (up 6.3 per cent).

“This is the third time in a row Morrisons has been the fastest growing of the big four,” said Mr McKevitt.

“To win market share, for a big four retailer, is pretty impressive, quite frankly. A couple of things are going on. Morrisons’ online business is doing really well. It is also annualising against a pretty poor performance last year when it was down 2 per cent.

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“Morrisons is helped by its store estate. Its stores are not too big and not too small.

“On top of that, it is doing something different. Virtually every other retailer had given up on the multi-buy more or less. With Morrisons, you only have to wander in to its shops to see two for a pound, three for two pounds, those kind of multi-buy deals.”

Kantar believes UK supermarkets could start a price war in the run up to the all important Christmas trading period.

A number of grocers, including Morrisons and Asda, have recently announced significant, long term price cuts. Last week, Morrisons announced plans to cut and hold down the price of over 400 popular items to make food affordable for families.

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Mr McKevitt said: “I think we are about to enter a period of significant price war, which of course could bring about self imposed deflation in the market and if that happens then value sales are going to start coming down.”

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