UNHEALTHY EATING: Supermarket sales take a plunge and takeaway numbers soar as UK returns to pre-pandemic bad habits
UNHEALTHY EATING: UK grocery sales have tumbled by 4% over the past three months as shoppers continue to steadily return to pre-pandemic unhealthy eating habits, according to new figures.
The news comes as the number of orders placed on Just Eat in the UK soared by 58 million in the first six months of 2021 to 135 million compared with a year earlier, the online takeaway platform has revealed.
Households placed orders 3.2 times a month on average – up from 2.5 times a month during the first half of 2020 as the pandemic hit.
But a heavy period of promotions to win over new customers and increase market share took its toll.
Data firm Kantar found that supermarket sales declined for the 12-week period to August 8, against the same period in 2020, although the decline slowed down to 0.5% for the last four weeks of the quarter.
It also reported that the proportion of grocery sales taking place online shrank further as shoppers made more trips to stores.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “In monetary terms at least, we seem to be in a similar place to 12 months ago, but if we dig deeper into the data we can see that our shopping habits are actually very different.
“With the end of social distancing restrictions, people have been happier to head into stores to make more regular, smaller shops.
“Consumers made an extra 108,000 shopping trips this month, while average basket sizes were 10% smaller.”
In London, Just Eat said it also saw a 10% increase in its market share following a major investment programme as the delivery market heated up while restaurants were shut.
More restaurants are also using Just Eat’s own riders, some of whom were recently offered worker status rather than the industry’s preferred gig-economy contracts, to make deliveries rather than their own staff.
Just Eat deliveries jumped 700% during the period and tend to be more profitable to the business, as it can usually charge higher premium for drop-offs by their own couriers rather than just acting as an ordering platform.
The company said: “This significant growth was driven by our investment programme in marketing and delivery, increasing brand visibility and targeting a period of aggressive price leadership and the expansion of restaurant supply.”
It pointed out partnerships with McDonald’s, Greggs, Pret A Manger, Itsu and Chipotle – although some of the deals offered are likely to be loss-making due to high promotions.
Just Eat added more than 90 new brands during the period, including Leon and Le Pain Quotidien, as restaurants and cafes looked to leap on the delivery bandwagon whilst lockdown restrictions saw sites closed.
The company also rolled out deliveries from Costa Coffee and Starbucks, leading to more than 58,000 restaurants on the site, up from 50,000 at the start of the year.
In the first six months of 2021, gross transaction value – a popular measure in the sector – increased by 63% year-on-year.
Just Eat said: “This was 13 percentage points below order growth mainly driven by the step change in quick service restaurant (QSR) supply, whose orders typically carry a lower basket value.”
Total revenues in the UK rose 82% to €552 million (£471 million) in the first half of 2021. The losses were put down to “our continued investments to win online share, including increased restaurant selection, marketing, and our price leadership strategy.”
Globally, the company said revenues rose 52% to 2.6 billion euros (£2.2 billion) in the first six months of 2021, compared with 1.8 billion euros (£1.5 billion) in the first half of 2020.
Underlying pre-tax profits of 205 million euros (£174 million) swung to a 190 million euro (£162 million) underlying pre-tax loss.
Figures also revealed that Waitrose was the only major UK grocery retailer to deliver sales growth over the 12-week period, with a 0.6% rise in activity.
Elsewhere, Morrisons saw the largest decline of the big four supermarket giants, with a slump of 6.2% for the quarter against the same period last year.
Asda sales dropped by 4.7%, while Sainsbury’s reported a 2.6% decline in total sales, Kantar said.
Meanwhile, Tesco was among the more resilient of retailers, with a 1.8% decline, which allowed it to improve its market share.
Ocado also reported its first decline on record, with sales dropping 0.7%, as it appeared to be impacted by the reduced demand from online shopping.
“Ocado’s growth is now comparing against the rapid expansion it enjoyed in 2020 so it’s not altogether surprising that we’re now seeing a small dip,” Mr McKevitt said.
“It’s still a positive outlook for the online specialist though.
“Ocado has retained 1.8% of total grocery sales, the same as last year, and sales are up by 44.4% compared with 2019, the fastest two-year growth in the market.”
The latest industry figures also revealed that shop prices increased by 0.4% over the past four weeks following a lengthy period of grocery deflation.
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