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Growth of online grocery sales slows in UK

Growth of online grocery sales slows in UK
Photo: Kantar

UK grocery sales were up by 7.4% in the first 12 weeks of 2021, down 3% compared with the same period in 2020, according to Kantar data. The reduction in the growth rate coincides with the anniversary of the first Covid-19 lockdown, which drove a surge in grocery sales. There are also signs that shoppers are returning to physical stores, as growth in online sales was also down. Online sales were 89% higher than this time last year, but the channel’s market share fell back to 14.5% from the record 15.4% recorded in February 2021.

Kantar’s head of retail and consumer insight Fraser McKevitt said: “Spring’s arrival signals the start of a really interesting period for the grocery market. The anniversary of the first national lockdown means we begin to compare grocery sales against the record-breaking levels seen in the early days of the pandemic and growth has perhaps not surprisingly dipped over the past four weeks as a result. This time last year, Brits were adjusting to schools and offices closing and making extra trips to the supermarket to fill their cupboards for lockdown. To put that into context, shoppers made 117 million fewer trips to the supermarket this month compared with those fraught weeks in March 2020.”

However, grocery spending remains considerably higher than pre-pandemic levels, and the Easter period may prompt a revival. 

“Warmer temperatures and lighter evenings mean many of us are planning outdoor get-togethers over the long weekend – 61% of people are looking forward to socialising with friends again and 23% of households are planning to dust off the barbecue if the weather is kind to us. There are signs of people making a special, even symbolic, effort this year and grandparents might be showing up with additional treats after 12 months of restrictions,” said McKevitt.

Tesco increased its revenue by 8.5% and captured 27.1% of the market, up by 0.3 percentage points compared with the same period last year.

 

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Relentless growth of UK berry sector

Relentless growth of UK berry sector
Photo: British Summer Fruits

The UK’s berry sector has grown 600% in the past 25 years, according to a press release by British Summer Fruits, with the market for fresh berries now worth over £1.5 billion, compared to £206 million in 1996.

Nick Marston, chairman of British Summer Fruits, said: “With increasing calls for consumers to adopt healthier lifestyles and diets, our work to highlight fresh berries as a delicious, healthy snack and ingredient is extremely important. We also need to continue to drive consumer demand to support our UK berry growers and their growth ambitions by providing an ever-expanding market for their crops.”

The berry industry has seen significant innovation, including varietal developments, new growing techniques and the use of new technology. As a result, the self-sufficiency of the British berry industry continues to grow each year and the UK season now extends from May to November.

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New players in organic agriculture

New players in organic agriculture
Source: IFOAM & FiBL

A report by the Research Institute of Organic Agriculture FiBL and IFOAM titled “The World of Organic Agriculture Statistics and Emerging Trends 2021” shows that India leads the way in terms of its growth in organic farming. In the top-10 countries, there are 3 from Europe: France, Spain, and, perhaps most notably, Hungary. Although in total land area, the share of organic farming in Hungary is not particularly high (6%, the figure for neighbouring Austria is 26.1%), the increase in area of 93,800 hectares is significant. The number of Hungarian enterprises engaged in organic agriculture had reached 5,600 in 2019. With a total area of 6884 ha, Hungary is the world’s 12th biggest organic fruit producer, with the main products being elderberries (20%), walnuts (more than 40%), pomes (15-20%), sea buckthorn, cherries and sour cherries.

 

 

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Tesco pays out £315 million in dividends to shareholders as sales boom

Tesco pays out £315 million in dividends to shareholders as sales boom © Réussir Fruits et Légumes
© Réussir Fruits et Légumes

 

UK retailer Tesco has posted a 29% rise in pre-tax profits to £551 million, with sales totalling £26.7 billion. Tesco reported a 4% increase in operating profits to £1.2 billion in the six months to 29th August, as booming food sales coupled with the tax break offset a £533 million bill for extra staff and safety measures in its stores.

Tesco’s UK food sales climbed more than 9% in the period as the pandemic triggered big changes in shopping behaviour. Sales in its convenience stores were up 7.6%. In large stores, sales grew by 1.4%, as customers made fewer trips but bought more on each visit. The average “basket size” – the amount spent by shoppers per visit – increased by 56%. The biggest change was Tesco’s online business, where sales grew at 90% over the summer months. The boom reflects the rapid expansion of the delivery service with the number of slots doubling to 1.5 million a week.

However, the company has come in for criticism for paying £315 million in dividends to shareholders at a time when the supermarket chain is benefiting from a business rates holiday worth £249 million. This dividend is 20% more than in 2019.

Alan Stewart, the finance director of Tesco, said the board decided that paying dividends was the “right thing to do” for shareholders. “We have incurred very, very significant extra cost in running the business in the year. It is against a backdrop of keeping people fed and supporting government initiatives against the vulnerable, that the business’s performance should be measured.”

Positive Money, a campaign group, criticised the Tesco move. Fran Boait, its chief executive, said: “There needs to be conditions to ensure that any company receiving public support in a time of crisis isn’t wasting money on paying out dividends to wealthy shareholders.”

“For Tesco to accept this relief, and then be able to turn around and pass the benefit straight on to shareholders, shows that the system is not fit for purpose – public funds should not be captured as private profit,” said senior economist Sarah Arnold.

However, the dividend decision pleased the City. Richard Hunter, head of markets at Interactive Investor, said the cash would be welcomed by investors “given the dearth of payouts at present”. “The increase is a healthy sign of confidence from the company in its prospects”.

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Uptick in Australia’s vegetable exports

Uptick in Australia’s vegetable exports

Credit: Alexandra Sautois

 

Australia recorded a 6.6% increase in fresh vegetable exports in 2019 to €185 million, according to Global Trade Atlas data. In volume terms, the country’s vegetable exports were up 5.4% to 230,000 tons. The main source of this growth was onions, which surged 67% to €25 million in 2019, thanks to strong demand from Europe, where there was a lack of supply. Australia’s largest fresh vegetable export in volume terms is carrots, accounting for 34% of all shipments. Australia also exports large volumes of potatoes, celery, broccoli and cauliflower.

The largest market for Australian fresh vegetables is Singapore, followed by the UAE, Japan, Malaysia and Saudi Arabia, which together received about 53% of total vegetable exports. The Ausveg body is working to help the country’s growers develop the skills and capacity to enter export markets for vegetables through the Vegetable Industry Export Programme, in partnership with Hort Innovation. In a move which should further boost exports, Australia has recently signed a free trade agreement with Indonesia.

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Asia drives continued rise in global demand for pineapple

Worldwide demand for pineapples continued to increase between 2009 and 2016 and is the fastest growing fruit for the UK’s largest retailer, Tesco. According to market researcher IndexBox, the international wholesale market for the tropical fruit reached US$14.9 billion in 2016. Since 2009, the pineapple market has seen an average annual growth of 3.3%, although in 2017, this growth slowed somewhat. The growing demand, especially in Asia, means that the segment’s value is only likely to increase further, with the strongest consumption growth being seen in China, Indonesia, India, Vietnam and the Philippines. The same trend is likely to occur in Latin America as living standards rise across the continent with population increases and consumer trends shifting towards adopting more healthy lifestyles. There is also an increasing demand for canned pineapples worldwide, especially in the Philippines, Indonesia and China. The forecast for the coming years is for the segment’s growth to be 2.9% between 2016 and 2025, to reach volumes of 34.2 million tons.

Brazil is the world’s largest pineapple consumer, consuming 11% of the world’s supply, followed by the Philippines and Indonesia (8% each), India (7%); China (6%); Nigeria and Thailand (5% each); and Costa Rica and the US (4% each). Ghana recorded the fastest growth in pineapple demand between 2007 and 2016 (38.4%), followed by Angola (28.3%). the Dominican Republic (23.4%) and Costa Rica (22%). Highest annual per capita consumption was recorded in Costa Rica (242 kg), Angola (31.1 kg), the Philippines (21.2 kg) and Thailand (20.6 kg per year).

In line with the growth trend of the past nine years, global pineapple production rose to 26.9 million tons in 2016. The world’s biggest producer, Costa Rica, accounted for 12% of total production in 2016 (3.2 million tons), followed by Brazil and the Philippines (10% each), Indonesia (8%), India (7%), and China and Nigeria (6% each).