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Morrisons’ profits plunge in 2020

Morrisons’ profits plunge in 2020
Photo: Morrisons

UK retailer Morrison’s has announced a 50.7% fall in profits to £201 million for the year to January 31. The plummeting profits are mainly due to the additional £290 million in costs linked to the Covid-19 pandemic. A large contributor is an increase in staff absences, as well as the £230 million impact of handing its business rates relief back to the Treasury.

Like-for-like sales (excluding fuel and VAT) rose by 8.6% thanks to strong grocery demand, with the final quarter seeing 9% growth. Full-year revenue was up by only 0.4% to £17.6 billion. 

However, Morrisons’ online sales tripled during the year and its capacity jumped five-fold.

 

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Strong US demand for fresh produce 

Strong US demand for fresh produce 
Photo: Eurofresh Distribution

January saw a 9.7% year-on-year rise in sales of produce, according to a report by the PMA, IRI and 210 Analytics. The figure excludes online-only and delivery e-commerce sales, which are well up on 2020 levels.

Joe Watson, VP of Membership and Engagement for the PMA, said: “Produce at retail had a strong January, driven by the two middle weeks ending January 17 and 24. We continue to see highly elevated sales results for vegetables, that are very much in line with the gains seen in the meat department — both pointing at more meals prepared at home. Retail fruit gains have been in the high single digits since the third quarter of 2020 and remain a big opportunity for more at-home snacking, breakfast and lunch.”

Fresh produce generated $6.3 billion in sales during the January weeks. This reflects $198 million in additional fruit sales and $383 million in additional vegetable sales. In fruit, berries remained a dominant force, as did citrus, with sales up 13.1% year-over-year, showing consumers’ consistent turn towards foods perceived to offer healthier lifestyles. Lemons and oranges were the fastest growers. Only grapes lost ground.

As for vegetables, there were double-digit gains for eight out of the 10 leading items.

 

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Safeway sources from vertical farms

Safeway sources from vertical farms
Photo: Plenty

US retailer Safeway is making healthy greens more accessible to smaller communities by welcoming produce from vertical farming company Plenty to 17 more stores across Northern California — bringing the total number of stores carrying Plenty products in the region to 53, according to Progressive Grocer. The additional Albertsons-owned stores, which include Safeway and Vons, are part of a multiyear agreement between the two companies to expand Plenty produce into more than 430 Albertsons-owned stores across the state of California. The new store locations are primarily in smaller communities, making Plenty the first indoor vertically farmed produce available to these shoppers.

Plenty’s plant scientists, engineers and farmers have developed its indoor vertical-farming technology to grow nutrient-rich and pesticide-free plants year-round. Using data analytics, machine learning and customized lighting, the farming tech company is able to coax the natural flavours and nutrients from the plants. Plenty grows multiple crops in a building the size of a retail box store, yielding hundreds of acres using a fraction of the water and other precious resources.

In addition to debuting in more store locations, Plenty is debuting a first-of-its-kind Text-a-Farmer feature, on display next to its greens in stores. In the age of COVID, when human contact has been limited and in-person sampling restricted, Plenty’s texting feature connects with shoppers directly to answer questions and share information. Text-a-Farmer lets shoppers text questions while shopping and receive an answer directly from a Plenty farmer. Questions can cover anything related to Plenty and its produce, including “Do you use pesticides on your leafy greens,” “Is your packaging recyclable,” and “How do I keep my greens fresh longer?”

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UK consumers switching online in their droves

UK consumers switching online in their droves

 

According to NielsenIQ data, the number of British households shopping for groceries online has more than doubled in the last year, reaching 41% compared to 18% at the same point in 2020. Overall, online grocery sales are up 132% y-o-y, while sales at bricks and mortar stores declined by 1%. UK shoppers spent £1.5bn on online groceries in the four weeks ending 27th February 2021, with the online share reaching 17%. This is the highest ever share for online grocery sales in the UK and a 1% increase in share in just a month. 

Total till sales for February grew by 10.6% y-o-y, the highest growth recorded since June 2020, when sales growth peaked at 14%. The top-performing retailer is Lidl, which enjoyed 21.2% sales growth in the past 12 weeks, as the discounter continues to benefit from its Lidl Plus loyalty app. Next came Iceland (+17.5%), and Morrisons (+11.7%).

NielsenIQ’s UK head of retailer and business insight, Mike Watkins, said: “One year on since the pandemic began in the UK, it’s evident that a lot has changed in terms of consumer shopping patterns. Online grocery has now become a permanent fixture for many UK shoppers – it is now past the ‘tipping point’ and is at the ‘sticking point’. Consumers no longer feel like they have to shop online, but do so because they prefer to, particularly now that many retailers have expanded fulfilment capacities. Even when we exit lockdown and start to return to some normality, we anticipate that online demand will continue to grow ahead of the market.”

 

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The US has become a nation of “super” avocado-consumers 

The US has become a nation of “super” avocado-consumers 
Photo: HAS AVOCADO BOARD

A recent Hass Avocado Board (HAB) study shows that avocados purchases grew substantially between 2016 and 2019, driven largely by a growing segment of “super” avocado shoppers. Super avocado-purchasing households spend at least US$26 annually on avocados and contributed to 94% of the increase in avocado purchases over the three-year period (2016-2019). In 2019, these households accounted for 70% of all avocado purchases in the US. The study is based on household purchase data from the IRI Consumer NetworkTM. 

This household segment is growing faster than the other three segments analysed in the study, accounting for 28% of all US households in 2019, up from 25% in 2016. “Light” households accounted for only 22% of households in 2019, down from 25% in 2016.

Emiliano Escobedo, executive director of the Hass Avocado Board, said, “As avocado shoppers move to higher purchase levels, they will find themselves as a member of the Super household segment. Understanding and engaging with this shopper group is key to the future growth of the avocado category.”

Two key recommendations of the study are to develop marketing activities that bring new shoppers into the category and drive more trips to retailers, while also focusing on marketing for the Super avocado-purchasing household group.

 

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Lidl dislodges DIA among top-three Spanish supermarkets

Lidl dislodges DIA among top-three Spanish supermarkets
Photo: LIDL España

Spaniards are consuming more but less frequency and without leaving home, and price is becoming an ever more critical factor. These are the findings of the recently published Kantar data, which show that each shop is 14.1% larger, but visits to supermarkets have fallen by 2.7%. In 2020, consumers preferred local supermarkets, which reached a share of 26.2%, while online sales reached 3.1% (up 62% in revenue terms). During the Christmas period, hypermarkets and the cash and carries recorded their best numbers, reaching a 15.4% share.

The traditional Big 3 (Mercadona, Carrefour and DIA) lost market share in 2020. While Mercadona maintained its leadership, reaching 9 out of 10 Spanish households and with a market share of 24.5%, its share was down 1.1 points from 2019. The suggested causes are the delay in setting up an online channel and not offering local stores across the country. Carrefour’s hypermarket channel suffered during the pandemic, and the retailer’s market share was down 0.3 points to 8.4%. DIA’s performance improved markedly compared to previous years, thanks to its extensive network of stores. Nevertheless, it lost 0.6 points in 2020, with its share dipping to 5.8%. Replacing DIA in the top-three was Lidl, which gained 0.5 points to achieve a 6.1% share of the Spanish market.

 

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Amazon opens first till-less stores outside US

Amazon opens first till-less stores outside US
Photo: CNN

Amazon opened its first cashless and no-tills convenience grocery shop in London on 4 March. The 2,500 sq ft Amazon Fresh store in Ealing Broadway features Amazon’s ‘Just Walk Out’ technology whereby customers scan their phones on arrival, fill their bags with products and leave without any interaction with staff or a self-checkout machines. Shoppers scan a QR code on the way in, then just walk out with their accounts automatically billed as they leave, thanks to a number of cameras and sensors in the store ceiling tracking customers and their purchases, according to the BBC.

The Ealing store stocks hundreds of own-brand products and well-known brands, and also serves as a collection and return point for goods bought online. Amazon says it has sourced many of its own-brand groceries from UK suppliers itself, with other items coming from Morrisons and Booths, with whom it has pre-existing ties.

Matt Birch, the former Sainsbury’s executive who now leads Amazon Fresh Stores UK, said: “The focus is just on creating a really easy shopping experience for customers.

A second London Amazon Fresh store is understood to be opening in Notting Hill Gate, with others planned in city centres across the UK in the future. Amazon also operates seven Whole Foods Market supermarkets in the UK and is expected to expand further in the UK retail sector by buying one of the larger chains. The company is also reportedly offering to sell its Just Walk Out technology as a service that can be installed in other supermarkets.

 

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UK organic sector reports record growth in 2020

UK organic sector reports record growth in 2020
Photo:Creative Commons

The UK organic market grew 12.6% in 2020 and is now worth £2.8 billion, according to Soil Association Certification’s Organic Market Report 2021. This is the highest growth rate seen in 15 years, with over £50 million per week spent on organic food and drink during 2020. 

The online channel has fuelled much of this growth, with e-commerce sales up 36.2% in 2020. This channel now accounts for almost 25% of total sales. Meanwhile, sales of organic items in supermarkets increased by 12.5% per cent, with fresh produce sales up by 15.5%. Organic carrots performed best in this category, with sales soaring by 17.2%.

Sophie Kirk, senior business development manager, Soil Association Certification, said: “The unprecedented crisis of 2020 has brought immense challenges for organic farmers and the entire food supply chain. So it’s heartening that in times of crisis, more people are supporting home – grown organic produce, with many British organic products such as eggs, cheese, carrots, beef and lamb benefitting from strong sales growth through supermarkets this year.”

The UK organic market is on track to be worth £2.9 billion by the end of 2021, with many new organic shoppers expected to remain loyal to the sector.

 

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Positive and negative trends of FMCG retailers in Russia

Positive and negative trends of FMCG retailers in Russia_InfoLine
Source: InfoLine analytic agency

The pandemic and connected crisis negatively influenced most formats of trade in Russia. Many FMCG stores were closed. Thus, the total number of hypermarkets decreased by 68 outlets in 2020; hypermarkets share makes up less than 20% now (among top-200 FMCG retailers).

At the same time, the results of the retailers developing online sales and delivery services were positive (the case of Metro C&C and Lenta), as well as of those who converted non-profit formats into rewarding ones. For example, X5 Retail Group and Magnit converted 25 hypermarkets each into supermarkets.

The chart below illustrates the closure of the largest retailers’ hypermarkets (stores number and trade area, thousand m2).

 

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Altroconsumo names best retailers in Italy

Altroconsumo names best retailers in Italy
Photo: Altroconsumo

Italian consumers’ association Altroconsumo has announced its retail awards for 2020/21. Despar was the winner in the supermarket category, while Esselunga was recognised in the hypermarkets & superstores category, and Eurospin was the winner in the discount supermarkets category. In the online retail category, Coop was the winner among the supermarkets, and Esselunga won once again the hypermarket & superstore category.

There was also a section based on customer satisfaction. The awards are based on a survey conducted with around 1,600 customers, with 85% of respondents saying that they were satisfied or very satisfied with the stores where they go shopping, with discount stores and hypermarkets faring slightly better than supermarkets (87% versus 83%). First place overall went to Iper La grande I (96% of customers report being satisfied), ahead of Esselunga (94%), Coop.Fi and Ipercoop (92%) and discounters Eurospin (91%), Aldi (90%), Lidl (87 %) and In’s (87%).