Online sales of dairy products soar during lockdown
Dairy take-home sales rose by 18.7% in the 12 weeks to 14 June 2020; outperforming the overall grocery market (up 13.7%) and reaching £3.1bn during the period which includes the whole of lockdown. COVID-19 behaviours continued, with dairy shops taking place 1.7 fewer times compared with this time last year, and shoppers spending an additional 89p on each shop. There are signs that behaviour is starting to return more towards pre-lockdown levels, but this is likely to happen very gradually.
Despite shoppers starting to venture outside more with the easing of lockdown, we are still seeing growth through more convenient retailers – Ocado and Co-Op are the fastest growing retailers in value terms over the last 12 weeks (53.4% and 32.5% respectively). Online spend is soaring, with growth of 71% in dairy over the last 12 weeks and 91% in the last four weeks in overall grocery. The major multiples also see online as the fastest growing channel within their portfolios, with this set to continue to grow as 2.1m more shoppers shopped online in the last 12 weeks compared with last period. Convenience, however, seems to have reached its peak in April and growth is now slowing.
The multiples are still the largest contributors to the growth of the dairy market overall. Despite its 7.8% growth ASDA’s share is now 0.2 percentage points behind last month, with a share position of 11.9% compared with 12.1% in May 2020. That said, the Leeds-based retailer continues to outperform the other multiples in its online channel, which grew 103%.
Shoppers continue to enjoy fresh cream, and it remains the fastest growing category in the last 12 weeks, growing 39.9% as dessert occasions prove to be popular among older demographics. Eggs have now surpassed butter as the second fastest growing category, and are growing 35.8% with the latter growing 30.8% in the last 12 weeks. This is due to the number and type of occasions which have moved in-home as shoppers continue baking and eating more breakfast and lunches at home.
Base sales continue to grow ahead of promoted sales and recorded even faster growth seen in the most recent period, with full price sales up 28% compared to last year as promotional spend reduces by 3%, a decline of £22m in cash terms. This step back in promotional activity is down to volume deals which have declined 18%, mainly through yoghurt and milk with sales via the Y for £X mechanic down 40% and 20% respectively.
The fastest growth continues to come from family groups, particularly older families (up 30%). The largest contributor to dairy’s growth is empty nesters, who hold 21.0% share of the market, but their growth has slowed compared with last month.