Britons spent less in supermarkets during eat out to help out scheme

Britons spent £155m less in supermarkets in August than in the previous month as many returned to workplaces and the government’s eat out to help out scheme encouraged visiting restaurants and cafes.

Alcohol sales in supermarkets dipped month on month, with wine down 5% and beer down 10%, as the scheme encouraged people to swap Zoom catch-ups for trips to bars and restaurants, according to market research firm Kantar.

The chance to see friends, colleagues and family in person also appeared to reignite interest in personal grooming with sales of hair styling products up 17% and hair removal treatments up by 11% month on month.

Online grocery sales continued to be more than 75% up in August compared with 2019, driving a near 11% increase in total sales of take-home groceries in the three months to 6 September. However, in another sign of the shift back to old habits, they slipped back to 12.5% of the total grocery market in August from 13.5% in the previous month.

Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “This is not just about people going out to eat in restaurants, August also brought shielding to an end for many vulnerable and at-risk people.”

The overall growth in online sales helped Ocado, which launched its partnership with Marks & Spencer to shoppers on 1 September. It was the fastest-growing retailer over the 12 weeks to 6 September, with sales up by 41.2% year on year. But the online business of its former partner Waitrose grew even faster, according to Kantar, helping the staff-owned chain to increase overall sales by 7.3% year on year.

While good news for some, the growth of online grocery shopping is putting pressure on physical supermarkets. Sales at bricks and mortar stores fell by almost 2% in the 12 weeks to 5 September according to analysts at Nielsen.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “Food retail sales are still being boosted by households working from home, and such disruptions are expected to continue for the foreseeable future. However, with more Covid-19 headwinds set to come and a fragile economy, a weakened shopper sentiment will likely start to impact consumer spend overall.”

Despite those headwinds, Nielsen is predicting the UK’s grocery market will grow by 6% this year, making it more resilient than other types of retail.