With 2021 a certain improvement on 2020, it still was a year where both businesses and consumers faced continued challenges, as life was not entirely back to “normal”.
To assess the ups and downs of product sales in 2021, the Smylies team is delving into a recent article by The Grocer, which includes data from research and analytics organisation, Nielsen.
From supply chain issues and increasing climate anxiety to working from home and beyond – There are a wealth of factors which have contributed to the impact on UK product sales in 2021 and help us to better understand the highs and lows of the year for some of Britain’s best loved products.
Alcohol, frozen food and nappies were frequently added to consumers baskets in 2020. However, 2021’s top performers were quite the eclectic blend as fish product sales went up by £131.1m as other fast growers include energy drinks (up £205.5m) and chocolate confectionery sales increased by £147.7m.
The sales increases will be a huge boost to brands such as Cadbury and Nestle, as well as smaller brands like Gusto.
The beginning of 2021 saw the UK face it’s third government imposed lockdown, with pubs, restaurants and other non essential businesses closed until further notice. According to The Grocer, online channels remained at a 12% of grocery spend, which is more than double the figure prior to the beginning of the pandemic, despite being a much smaller percentage since the peak months of 2020.
By the late spring, the UK was slowly returning to a world with significantly less restrictions and as a result, consumer behaviour began to shift. With the reopening of pubs, restaurants and other hospitality businesses on May 17, consumer behaviour was set to change yet again.
With an eventual return to the office and a general lifting of restrictions, a new picture was forming as consumer behaviour altered during the warmer months of 2021. The result of a return to busier lives and schedules, meant that UK ready meals have made a further £80.4m in sales, a huge contrast between 2020’s figures, which saw a £74m decline.
When it came to spending, buyers across the UK were keen to plough more of their hard earned money into groceries from a range of outlets. Consumer behaviour has changed as the country has opened up, as evidenced by increased fresh food sales, as well as taking advantage of promotional offers across the supermarket sector.
Paul Martin, Head of Retail at Retail UK, told The Grocer: “You’ve got the pent-up demand of humans wanting to celebrate. There’s been a traffic jam of festivities over recent months. We also know that the UK consumer saved about £150bn of disposable income over the course of the last 18 months.”
Despite a much better year for various brands across a number of grocery categories, 2022 is already showing signs of a new challenge for all aspects of the supply chain, as well as consumers themselves. With inflation rising significantly to the highest rate in 30 years, buyers are likely to not maintain their loyalty if it means they can save money elsewhere.
Mark Dodds, chair of the Chartered Institute of Marketing Food, Drink & Agriculture sector interest group told The Grocer: “For both brands and retailers it will be critical that they think carefully about how they explain any price changes to their consumers.”
He continued “There is no doubt that many food prices will rise in the next six months and brands will need to be careful in explaining the reasons why this is happening.”
For some brands and shopping outlets, this is good news if you’re looking to obtain new consumers and appeal to a wider audience. However, there’s no denying that a change in mentality and behaviour will have an impact on all in the grocery industry.
The question is, who will weather yet another storm?
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