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Online grocery orders decline as shopping habits change amid high food inflation

Published 08/06/2023, 12:45
© Reuters.  Online grocery orders decline as shopping habits change amid high food inflation
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Proactive Investors - UK households have shifted their supermarket shopping habits amid soaring inflation and post-pandemic, according to industry research.

Amid food price inflation above 17%, spending has increased on cheaper own-label goods and use of discounts from loyalty schemes has increased, market research firm Kantar has found.

Other changes include a reduced number of supermarket trips each month and a fall in online grocery spending, based on data the firm shared with the BBC, which is backed up by the succession of profit warnings from Ocado (LON:OCDO) last year that ended with a swing back to losses.

On average, Kantar found that 16 grocery trips a currently being made each month, down from 18 before the arrival of Covid, while the share of online grocery shopping has fallen to 11.7% of the total from a peak of 15.4% in the pandemic.

Kantars' Fraser McKevitt said many older people who were obliged to shop online during lockdown have since gone back to going to shops themselves.

However, online ordering has grown since before Covid, when it represented roughly 8% of total grocery spending.

The rise of supermarket own-label brands, which include Tesco (LON:TSCO)'s Stockwell and Sainsbury's Stamford Street, reached 51% of total grocery sales at the end of last year, up from 45% in 2005, Kantar found.

In May this year, Kantar said own-label lines grew 15.2% during the month, almost double that of branded products which rose by 8.3%.

The nature of loyalty cards has also changed, with nine out of 10 shoppers owning at least one card.

With Tesco's introduction of its Clubcard Prices scheme, along with Sainsbury's Nectar scheme and Morrisons More, shoppers that check in their card when they shop get automatic reductions in return for the supermarkets collecting data they can sell to brands for marketing purposes.

This has seen a fall in the number of in-store deals, Kantar has found, with the share of spending on in-store deals plunging to 25% from around 40% in 2014.

Read more on Proactive Investors UK

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