Supermarkets in the United Kingdom

2021 DEVELOPMENTS

Pandemic’s impact continues to benefit supermarkets in 2021

During home seclusion, consumers’ preferences shifted towards larger grocery store formats that offered multiple product categories in one place, including apparel and footwear or gardening products, so that their mobility was limited to the minimum. As COVID-19 restrictions remained in place over the first half of the year, consumers found it more efficient to shop less frequently, instead choosing to purchase a higher number of products at once.

Omnichannel strategy becomes mainstream

The pandemic accelerated the shift towards omnichannel business operations, even for grocery retailers which had been less inclined to offer food and drinks online. After the demand boomed, and remained relatively high after the lockdowns, investing in online sales and delivery is now at the forefront of grocery retailers’ strategies.

Supermarkets commit to a healthier product offer

Consumers have been increasingly focusing on their health and wellness as the pandemic has fundamentally changed their shopping habits. With an increased emphasis on healthy or healthier groceries, players are making commitments to supplying more of such products.

PROSPECTS AND OPPORTUNITIES

Convenience stores to attract customers away from supermarkets

The supermarket channel in the UK was already reaching maturity before the emergence of the pandemic, resulting in slowing year-on-year growth. Although the channel benefited greatly from the consequences of the health crisis, sales are projected to normalise over the forecast period.

Concessions to become integral part of supermarkets

In order to boost their revenues, players operating in supermarkets are increasingly partnering specialists or foodservice providers to open concessions within their stores. The relatively large selling space allows for the creation of an in-store retail unit that can attract consumers who would not necessarily have a preference for shopping in a supermarket.

Strategic focus on sustainability continues

Rising awareness of environmental issues continues to impact the operations, products and services offered by grocery retailers, including supermarkets. The Co-operative, for example, is expanding its robot delivery service to five new towns.