Lockdown Brits splash out on cream
The dairy market has grown at 19.9% in the 12 weeks to 12 July, taking the value of the category to £3.1m. This is compared to the 16.9% growth seen in the grocery market during the same period. There are signs that shopper behaviour when it comes to dairy purchasing is gradually returning to normal levels, with 25.1 trips last year having reduced by 1.4 this year. However, counter to the dynamic seen at a total market level, volume purchased per trip is still growing at a similar rate as the during the previous 12 week period, 25.6%.
Fresh cream is the fastest growing dairy category for the third consecutive period (up 44.3%). There has been an additional 54 million cream occasions during lockdown (36% growth compared with last year) which has mainly been driven by consumers aged 25 to 34. This growth is a result of cream being chosen more often as a part of desserts and main meals, with fruit and vegetables being the top sweet and savoury accompaniments to cream.
Ocado grows at 54% in the latest 12 weeks, remaining the second fastest-growing retailer behind Independents and Symbols at 61%. Convenience stores are still growing year on year, with Co-op’s dairy sales booming by 27.1% as shoppers continue to add more items to their baskets. However, value is starting to trail off in convenience retailers compared to previous periods, and Co-op’s share of dairy sales has has reduced by 0.4 percentage points, with the retailer now accounting for 7.4% of the market. We also see a comeback in the discounters, with Aldi having the fastest going share of the market (up 0.32 percentage points) as shoppers feel more comfortable to travel further as lockdown is eased. Online sales have grown again this period although at a lesser rate at 88.6%, in a sign that sales through the channel are starting to plateau. Despite this, one in four shoppers still bought dairy online in the last 12 weeks and the channel continues to gain share of the category.
Non promoted sales are powering the growth of the market, with full price sales up 27% compared with last year, though promotions gradually make a comeback. Spend on deal has risen from 24% to 25% of dairy sales in the last 12 weeks due to an increase in temporary price reductions available in store. Volume deals continue to plummet, and declined by 20%, compared with 18% decline last period.
The fastest growing demographic group has become those with older dependents (Aged 45+ with a child over 16 years old living at home), whose spend is growing at 31%. This group has also grown in terms of share of spend (up 0.9% percentage points) and become a more important shopper in the market, accounting for 10.6% of dairy spend. Retired shoppers have also increased their spend by 11% this period compared with 8% in June.
It seems shopper behaviours are gradually returning to normal, with frequency of shopping declining less steeply than during lockdown. How these behaviours and channel choices change as lockdown rules ease will be essential to the future of the market.