COVID-19 Shopper Insights – five key areas to keep up with shoppers

Date : 06 May 2020

Nishel Theophanous

Shopper Solutions Analyst

Over the last few weeks we have all seen a dramatic shift in our daily lives due to the impact of the Coronavirus (COVID-19) and here at IGD we have been busy tracking and reporting on the impact it’s having on shoppers. We have produced numerous pieces of content in the last few weeks and if you haven’t had a chance to read everything, we have summarised five  key areas that we have been hearing from shoppers and what has changed for them in the last few weeks:

  1. Stockpiling - Shopper stockpiling has settled down recently, but consumption is high

One of the biggest impacts of COVID-19 on the food and grocery industry was the unprecedented level of purchases by a proportion of shoppers. This put a huge amount of pressure on the retail supply chains as retailers struggled to maintain supply. In response retailers were forced to rationalise ranges and limit the number of items purchased from certain categories; reduce store opening hours to allow for stock replenishment and to restrict demand; and eliminate or reduce promotional activity.

Our data shows that the number of shoppers claiming to have stockpiled, or purchased more than normal, was steadily increasing across the first 4 weeks of lockdown, but then started to ease off. The announcement of an extension to the lockdown on 16th April then saw this increase again, with 64% claiming to have already stockpiled or purchased more than normal as they prepared for a further 3 weeks at home.

Categories that were stockpiled most at the beginning were dry goods, household products and toilet paper (as we all know!), but in recent weeks the categories that are also seeing an increase in stocking up have been tins and packaged foods, medicines, breakfast cereals, frozen food and alcohol as households are now at home 24/7 and consuming a lot more than they would normally be.

  1. Macro shopper factors - Financial confidence declining

Financial confidence is unsurprisingly low as we have entered lockdown where people are now unable to travel for work and may potentially be unable to earn a regular wage. Although the government have introduced economic measures to support people through this, there is evidence that there are still many who are unsure about what the future looks like.

One of the big implications of this financial uncertainty for many, is that we are seeing shoppers placing less emphasis on product quality when shopping but saying that their focus will be on saving money in the year ahead. We could, therefore, see the return of savvy shopping behaviours and more focus on cooking from scratch, reducing food waste and a focus on essential categories.

At IGD we have data to show trends in this area going back almost 10 years and with this view we can share our outlook on what has happened historically in times of recession and how shoppers behave, to aid your planning.

  1. Changes in shopping missions - Main shops persist but less frequently, while top up shops have increased

At the beginning of lockdown we saw more main shops occurring, which was linked to the fact that shoppers were increasingly stockpiling and preparing for an extended period of time at home. After this initial change at an overall level, we have seen top-up shops again being the most commonly completed missions. However, there are some very important differences by channels with main, larger, shops being much more prevalent in supermarkets and hypermarkets.

When planning for your category it will be important to understand the channels shifts that have occurred and we can split our data by individual channel to help you with this.

  1. Channel shifts - Online and convenience channels have seen biggest change

We have heard from our shoppers that they are prioritising speed and ease when choosing where to shop now, which has translated into shoppers using the convenience channel more. In recent weeks our data shows that 41% of shoppers visited stores they would not normally visit, and of those a quarter visited local independent stores and a fifth visited local convenience stores that they wouldn’t usually have gone to.

Unsurprisingly, the online channels saw high demand at the beginning of the period as people were not keen to go into stores, but the unprecedented demand put pressure on online systems with many unable to fulfill the spike in demand. As time has passed and priority has been given to the most vulnerable for delivery slots, we are starting to see a decline in the proportion of shoppers telling us they are mainly using this channel to complete their shopping. An effect of this prioritisation is that the we are seeing more over 65s mainly using online for their food & grocery shopping in April (15%) vs. Feb (9%). It will be interesting to track this profile shift and see if this continues post COVID-19, something that we will be updating on regularly.

  1. Shopper outlook - Shopper Confidence Index

Hopefully many of you have already seen our new Shopper Confidence Index (SCI), which in March showed that there had understandably been a decline in overall shopper confidence as the nation came to terms with the impact of COVID-19. In March, Shopper confidence was at a low of -9, almost as low as Sep 2019 (-10) which was driven by fears of a no-deal Brexit. Shoppers are most concerned with their household financial position going forward, as well as worries around future rises in food prices.

Despite this and other changes in shopper behaviour, a positive that has emerged from this situation is that shoppers recognise and appreciate the efforts of the food and grocery industry and trust in the industry has increased this month – to the highest levels in 12 months.

The months ahead are likely to provide both challenges and opportunities for the food and grocery industry and maintaining shopper trust is going to be key for future success. The  SCI will be updated on a monthly basis to provide you with that invaluable insight into shoppers outlook for the future to help underpin your own business planning.

I hope you found this a useful roundup of the key areas our shopper insights have been centred around recently. We will soon be releasing our April data, which will build on these areas and highlight any changes that may be starting to emerge. We are also developing various tools to help your businesses keep in touch with shoppers and answer your key questions, such as our look into what food retailing could look like post-COVID-19 in our 10 hypotheses report.

If you have any questions or comments at this time please do contact us at  [email protected]