Archive for October, 2020

Brits should think about kicking off their Christmas shopping sooner rather than later this year. That’s the advice from many retailers, who are anticipating continued disruption from Covid-19 over the festive season. 

Writing for the Times, retail editor Ashley Armstrong said the growing trend for online shopping has made delivery capacity a main concern. Yodel’s chief executive, Mike Hancox, said the firm has recruited 2,500 additional drivers and is delivering one million extra parcels a week compared to last year.

Boss of Tesco UK and Ireland, Jason Tarry, provided reassurance to shoppers that they had plenty of stock, but added: “Please consider shopping a little earlier than you usually would to avoid the peak festive period.”

Discounts are being offered by some retailers to inspire people to shop early. Hotel Chocolat, for instance, is offering 25% off Advent calendars up until 15 November. It’s likely that fashion brands with piles of unsold party outfits will do the same.

Retailers are following their own advice by bringing discounts forward ahead of Black Friday next month. Big retailers including Marks & Spencer, Debenhams and John Lewis have already slashed prices by as much as 50%. Topman has also made huge reductions as it competes against fast fashion e-commerce.

Santa stays at home 

Safety and hygiene concerns, coupled with social distancing measures, mean that many brick and mortar retailers will be scaling back their in-store festive experiences this year. 

Harrods has just announced that it won’t be hosting Father Christmas for the first time in 65 years, while other retailers are considering how to safely ensure his visit – for instance, by placing him behind a perspex screen. 

This doesn’t, however, mean that it’s impossible to provide an immersive, festive experience for shoppers this year – it just requires a little more thought and planning. We’ve got the tools and expertise to help you deliver quality in-store experiences over the festive period and beyond – get in touch today to find out more.

Brits aren’t letting the pandemic spoil their festive fun, with 75% of 18-34-year-olds admitting that Christmas will be more important than ever this year.

This is according to a recent study from Kinetic Worldwide, cited by The Drum. It found that, despite a surge in online sales, consumers are already hitting the shops in anticipation of the festive season – 28% say they’ve begun Christmas shopping.

Almost six in ten (58%) shoppers refuse to curb their spending this year, while 16% actually plan to spend more – indulging in retail therapy as a remedy for the worsening pandemic and approach of winter.

Another 25% say they’ll start their shopping spree before the end of this month, while 23% of Brits will start festive preparations earlier than usual this year. 

The impact of local lockdowns 

Local lockdowns across areas in Lancashire and in Greater Manchester are yet to have any significant impact on shopping habits on the ground. Footfall in Greater Manchester has dropped only 1-2%.

Surprisingly, footfall increased by 1-2% in coronavirus hotspots such as Wales and Lancashire. In Caerphilly, Glamorgan, where stringent restrictions were imposed, footfall bounced back by a significant 5% week-on-week.

Strong desire for in-store shopping 

The pandemic has not put people off shopping in-store – the opposite, in fact. Well over half (56%) of shoppers say they go out of their way to visit shops wherever possible, meanwhile 68% of 18-34-year-olds admit to missing the outdoor shopping experience. 

In contrast, only 31% of shoppers say that they’ll spend more online compared to pre-pandemic this year, potentially showing that the hike in lockdown online spending was only a temporary trend. 

When it comes to in-store safety measures, consumers are largely accepting of wearing masks: 80% said it was only a minor inconvenience, and just 21% said they are reducing the time spent in high street stores as a result.

Kinetic’s chief planning officer, Nicole Lonsdale, said the company’s survey “suggests a remarkable resilience in people’s shopping behaviour and a steely determination amongst UK consumers to make the most of this year’s Christmas season.” 

Suffice to say, the festive season is one of the best opportunities to engage your audience and drive sales. We’re proud to say that we’ve helped clients in the UK and beyond create, execute and optimise their festive marketing campaigns, with excellent results. It’s not too late to create additional campaigns, so get in touch today by emailing hello@thedeltagroup.com.

Nearly 30% of UK shoppers say they feel less comfortable buying loose produce since the start of the pandemic, a new study from Harris Interactive for The Grocer has found.

In a poll of 1,000 consumers, 36% said they feel that sustainable packaging had become more important since the beginning of the outbreak. Meanwhile, just 11% thought of it as less important. 

However, 29% of respondents feel less comfortable buying loose groceries than they did before the pandemic, compared to 11% who said they are actually less concerned.

Paper packaging was considered the safest option, cited by 28%, while no packaging (12%) wasn’t thought to be much safer than plastic wrapping (11%). This is despite research published in the New England Journal of Medicine proving that the virus can live on plastic surfaces for up to three days. 

When asked what it was that changed their opinions about packaging, the majority cited safety (46%). A similar percentage (45%) said their values had changed since the start of the virus, while 25% cited concerns over budget. 

Figures from Kantar revealed that loose food sales dipped 6% during lockdown in the four weeks leading to 14 June, while plastic packaging skyrocketed. As a result, many retailers rushed to place typically loose items in single-use plastic – though, many supermarkets stopped doing this when the UK came out of lockdown in July.

Package-free retailer Thornton’s Budgens in Belsize Park resorted to wrapping its bread rolls and pastries in plastic following a 35% nosedive in bakery sales in April. 

Yet, zero-waste consultant Catherine Conway, who supported Waitrose in creating its ‘Unpacked’ initiative in-store, was adamant that she was “busier than ever” and was “pleasantly surprised” at retailers’ approach to refilling during the pandemic. 

“All the retailers we have supported – Waitrose, M&S, Planet Organic, none have shut these initiatives down, none have stopped shoppers from bringing their own containers to refill in their bulk sections.

“And we are engaging with all the major retailers who all say they are still going ahead with various refill/reuse trials”.

Conway explained that while some trials have been put on hold, she’s still predicting activity in the lead up to Christmas. 

“We’re turning discussions into actions and innovation. I’ve not stopped working since Covid hit, which is a great sign that environmental issues and solving the packaging crisis is still on their radar. Retailers realise that recycling alone won’t fix the problem. The message I’m getting is that they’re up for the challenge.”

Many supermarkets suspended bagless deliveries during lockdown. Even though they are now reintroducing them, 64% consumers want paper bags rather than bagless (42%), and 39% said they want plastic bags to be collected.

In the survey, shoppers were more concerned about not being able to recycle packaging (41%) than excessive product packaging (39%). Also, 47% believed that packaging recyclability was more important than packaging reduction (33%) or compostability (16%).

Here at The Delta Group, our Covid signage and protective screens/coverings solutions can help call-out, promote safe shopping and put your customers’ minds at ease. We also offer a range of packaging solutions from our UK-based factories and have some excellent sustainable solutions, so please email hello@thedeltagroup.com to find out more.

Halloween is just around the corner, but it will be a little different this year due to the pandemic. Governments have advised against the age-old tradition of trick-or-treating, while local restrictions across the UK mean large gatherings are off the cards. 

Yet, while social distancing may be threatening typical traditions, The Grocer explains that Brits are determined to celebrate Halloween in their own way. Its Halloween category report shares some trend predictions for this spooky season.

1. Family fancy dress 

Frightening fancy dress has become something of a family affair, with adults taking an increasing interest in Halloween get-up in recent years.

So says Nicki Hamilton, UK marketing manager at trade fancy dress supplier Rubie’s: “One of the trends we’ve picked up on during the lockdown period is a real passion for dressing up as part of a unified online experience. 

“We’re hopeful families will still engage with the occasion in the way they eagerly adopted Joe Wicks’ Fancy Dress Friday. We have seen no indication that demand is slowing.”

2. Sweet treats 

A curb on trick-or-treating is bound to hit the confectionery sector. However, brands are optimistic that there’ll be an appetite for parties, whether they’re virtual or held at home in family bubbles, especially as this Halloween takes place on a weekend. And that’s bound to see people stock up on scarily sweet treats.

Mark Roberts, trade marketing manager at confectionery giant Perfetti Van Melle (PVM), says that Halloween may be an occasion people really look forward to celebrating, after months of lockdown and restrictions.

Yet, PVM is erring on the side of caution this year by choosing not to launch any Halloween-themed lines. Instead, it’s pushing popular products already on the shelves, to make sure stores aren’t left with excess stock come November.

PVM thinks its wrapped multipacks will prove most popular; they’re currently outperforming unwrapped bags, as buyers seek out safer sharing options.

3. Seasonal lines

Seasonal lines struggled in Easter; products were left gathering dust on the shelves and were hit with heavy discounting. To make sure history doesn’t repeat itself, Haribo’s Halloween lines will be a mix of special seasonal items with year-round favourites.

Buyers and retailers alike will be looking for well-known brands to be “risk-free crowd-pleasers,” Haribo’s trade marketing manager Claire James says. “Whether these are season-neutral products that are fit for purpose, yet minimise the risk for retailers, or themed and fun treats to deliver that sprinkling of ‘spooktacular’ that we believe people will welcome after a challenging year.”

Haribo plans to bring back seasonal favourites like its Trick or Treat multipacks and Scaremix, along with the Haribo and Maoam Duo Pack that launched in 2019.

4. Home-baked goodies 

Lockdown encouraged many people to get creative in the kitchen, and this trend is likely to continue through Halloween. 

Jen Brown from Dr Oetker UK believes this Halloween will be “a call to action to inspire families.” Halloween is already a popular baking occasion, as it offers people “the opportunity to express their creativity through weird and wonderful spooky bakes.”

It may be that time-strapped parents pop to the shops for baking mixes, a category that over-indexed at 365% during Halloween last year.

5. Fun comes first

This year, it will be especially important to create a sense of family fun. That’s why Fanta, which usually launches experiential events for Halloween, is launching its ‘Release the Stupid Side of Halloween’ campaign. 

The drinks brand has paused its experiential efforts for now while social distancing measures remain in place. Instead, it’s focusing on ‘digital and added-value entertainment’, which is aimed at engaging people from the comfort of their own homes.

Simon Harrison, VP of commercial development at Coca-Cola European Partners, said: “It will provide a light-hearted and fun spin on the Hallloween season, tying into the increased focus on comedy and humour at Halloween, which is growing in prominence alongside the traditional ‘horror’ theme.”

6. Trick-or-treating goes virtual 

Apps like Zoom helped us stay and feel connected with our loved ones, when we were unable to see them face-to-face.

Jelly Belly’s global marketing VP, Rob Swaigen, believes that trick-or-treaters will use video platforms like Zoom to keep themselves entertained this Halloween. This idea fits in with the company’s BeanBoozled Flaming Five challenge, an app where users can play a game of Russian roulette with sweets that taste of chili. 

Meanwhile, Chewits has also adapted its Halloween activity for the socially distanced age; the brand has enlisted the help of ‘Chewitsauraus’ to host virtual giveaways and games.

7. An integrated approach still important 

Brands may be focused on virtual experiences and entertainment this year, but creating that ‘spook factor’ in-store is still important. 

Take porridge brand Ready Brek – it’s planned a lot of spooky fun in-store and in wholesale depots this month, marking Halloween with eye-catching POS with the tagline ‘Trick or Heat.’ Add to this haunted house WOW displays with 3D roof elements, hanging bats and freestanding pallet arch display units across wholesale.

From in-store to on TV, it’s also launching its popular ‘Central heating for everyone’ creative, which is inspired by its memorable ‘glow’ advertising from the 1970s. 

It’s expected that Ready Brek’s winning combination of TV and in-store activity will boost already strong sales this season. Nielsen figures show that the brand continues to lead the ‘Hots’ category in terms of sales performance, with 8% value growth and 9% volume growth over the past twelve weeks. 

As Europe’s leading visual communications specialist, The Delta Group has the experience and tools to help you better connect with your customers – both during seasonal events and year-round. Email hello@thedeltagroup.com to get in touch today.

In its latest report, IBM has predicted that the coronavirus pandemic has sped up the transition to digital shopping by approximately five years.

Citing the study, Harvard Business Review acknowledges that Covid-19 has ‘supercharged’ all-things virtual, propelling sectors such as retail into the future.

Specifically, the pandemic has given rise to augmented reality (AR) applications which are providing shoppers with ‘try before you buy’ experiences. Shoppers are able to virtually preview furniture in their home with IKEA, for instance, or virtually try on clothes from luxury brands such as Gucci and Louis Vuitton. 

Indeed, AR has shifted from a nice-to-have tool to become an essential technology for retail brands looking to survive and thrive in today’s climate.

Virtual make up

Hygiene and safety are understandably a top priority now that brick-and-mortar stores have opened again. Some beauty retailers – like Ulta and Sephora – have banned shoppers from testing makeup on their skin, instead harnessing AR so they can virtually trial thousands of potential items and make informed buying decisions.

Ulta released its virtual try-on tool, GLAMlab, four years ago, but usage has soared since the start of the pandemic. Over 50 million foundation shades have been digitally swatched with the app, with engagement increasing seven-fold.

Consumer demand

In a global survey carried out last year, Nielsen discovered that consumers view AR and virtual reality (VR) as the main technologies they’re seeking to support them in their day-to-day lives, with 51% saying they’d be interested in using these technologies to assess products. That figure is likely to be much higher today, with AR now considered to resolve genuine pain points for consumers, especially during the pandemic. 

Shopify recently shared data showing that interactions with products which are supported with AR content have a 94% higher conversion rate compared with products which don’t. 

Brands have also started to harness AR to re-envision the digital shopping experience with virtual shop fronts. Back in May, retailer Kohl paired up with Snapchat for the launch of its AR Virtual Closet, where shoppers use the Snapchat app on their smartphones to step inside an AR changing room, mix and match products and even make purchases. 

Products available to buy in the Closet are constantly updated based on shopper needs and time of year. It was launched with key spring styles, then moved to a range of active and athleisure products as consumers looked for comfortable clothes to work from home. 

Levi’s has also complemented its AR offering with platforms such as Squad, a co-watching video platform which allows friends to shop together. The app was released with the aim of recreating some of those tangible, group experiences we’ve come to miss since the pandemic struck.

What next? 

AR’s next phase could be gamified social experiences. Burberry recently teamed up with Snapchat to launch an in-store AR game, and the concept could soon roll out to digital shop fronts and virtual closets where people can play, discover and shop with friends. 

The ties in with a current trend many fashion and beauty brands are exploring: mobile arcade games. This format is helping these retailers connect with new, younger shoppers – just take Burberry’s ‘B Surf’ racing game, which featured AR face filters and characters as prizes. 

Another trend that’s also emerging is the idea of virtual goods as commodities. Louis Vuitton, for instance, is selling virtual merchandise in the form of digital skins, which are branded accessories and clothing to dress characters with. 

More brands may experiment with this idea in future; selling virtual items – such as clothing, art and jewellery – for which there isn’t a physical counterpart. In this way, virtual items could be a way for shoppers to engage with, test and even own part of a brand that may not be accessible otherwise. 

At The Delta Group, in addition to our manufacturing of quality printed marketing display materials, we also provide a wide range of digital solutions including AR content generation and we have built a technology platform for centralised control of digital screen content across a retail estate. If you need some assistance embracing technologies and solutions that meet the needs of today’s consumers, please email hello@thedeltagroup.com.

While people feared that the rise of online retail would spell the end of the high street, it’s been proven that this simply isn’t true. 

Still, success for brick-and-mortar retailers in today’s environment depends on them adapting to meet the changing needs and habits of shoppers. 

A 365 Retail article argues that traditional retailers should look to the digital space for inspiration, listing three top techniques that could be easily implemented in-store.

• Diversification 

This concept is certainly not new, however it’s one that online brands seem to have mastered. The idea of diversification is that brands pivot to identify which new, related products and services they can sell alongside their existing offering.

Take the online casino sector, for example. Online poker proved a hit back in the early 2000s, when there was a sharp rise in the number of poker platforms and providers. Most platforms offered the same services, so there was lots of competition – operators smart enough to identify exactly what players wanted grew quickly to lead the market and altered the way their services were run. 

PokerStars Casino is perhaps the most recognisable name of the brands operating in the market at that time. Once specialising purely in poker, the online brand has diversified to offer a whole suite of casino games. The brand understood that as demand for new games grew, it had to grow with the industry to succeed. 

Retailers wishing to stay competitive should look to invest in products and services that complement what they already offer.

• Embrace technology 

Online brands make the most of the latest technology available to them – that’s a given. So, how can brick-and-mortar retailers utilise the latest tech and still inspire shoppers to visit them in-store? One way, explains the article, is through AR. 

Many retailers are now using AR to enable shoppers to visualise what a product would look like in their home – whether it’s a sofa in their lounge, or a wardrobe in a bedroom. High-street brands could replicate this with AR-powered mirrors, which allow shoppers to try on lots of outfits in a short space of time, without having to go into a changing room.

• Get social 

While the traditional high street has always been a social space, in the last few years the word ‘social’ has taken on a new meaning. We no longer associate the word ‘social’ with friends meeting up, but rather with likes and shares. And while there’s nothing wrong with this, social channels tend to direct traffic to online platforms rather than stores. So, besides running social ads, how can physical retailers make the most of social?

E-commerce stores are very good at this. They regularly provide vouchers or discount codes for shoppers who tag the store in a social post; physical retailers can do the same for shoppers who check-in at the store. Exclusive discounts for store fans could also be dished out to shoppers who like and/or follow the store on social media. 

These are just three of the many ways high street brands can take inspiration from the online world. Our team at The Delta Group have been creating and producing printed and digital solutions for nearly 30 years, so if you would like to discuss solutions that will encourage shoppers into your store, please email hello@thedeltagroup.com.

Sir David Attenborough’s latest documentary, A Life on our Planet, has moved a nation. The film makes for hard-hitting, nevertheless essential viewing, as the broadcaster and natural historian explores how the natural world has been altered by humans – and not for the better. 

There is a clear call to action: “if we act now, we can yet put it right,” Sir David tells viewers. The message is that we all – people and businesses included – must acknowledge the effects our actions and lifestyle choices have on our planet, and take proactive steps to reduce our environmental impact as much as possible.

Sustainable consumption – the new normal?

Eco-conscious and sustainable consumption was emerging as a key trend before the pandemic struck, though Covid-19 has likely made consumers ever more particular about the relationships they have with brands and goods. 

Reporting on this topic, the Telegraph acknowledges that there has already been speculation that consumers will have to be more frugal once the pandemic ends, but there is also a strong chance that sustainability will continue to be at the front of people’s minds as they consider how to live more responsibly. 

Take plastic use, for example. Statista data cited by the Telegraph shows that searches for the term “Alternative to single use” increased by 137% in 2019-20 compared to 2017-18. Also, “sustainable “fashion” terms have seen a rise in search volume every winter as shoppers search for longer lasting and more environmentally conscious items. 

Retailers cannot let sustainability slip

A GlobalData study warns that the pandemic will likely halt business’ sustainability practices for the time being. 

Analyst at the firm, Emily Salter, commented: “Making changes to materials, logistics and production processes to improve the sustainability of products and operations will slow, as sustainability is no longer top of retailers’ and consumers’ agendas.

“This is due to long-term adjustments being costly and many non-food retailers will be financially unstable as they emerge from the crisis after a significant period or low or no sales.”

Yet, while consumers may be more preoccupied with health and hygiene for the time being, and while price and convenience may be a greater priority in the current climate, it would be a mistake for brands to park their sustainability efforts. 

Sustainability hasn’t slipped shoppers’ minds: in a survey of 2,000 adults, over half said they make purchasing decisions based on a product’s overall environmental credentials. 

Food was the main area where people tried to shop more sustainably, cited by 55%. This was followed by clothing (31%), cleaning items (26%) and garden supplies (18%).

Sustainability is good for business – it can help attract new demographics, increase competitive edge, improve brand image and drive loyalty. But most important, it’s the right thing to do. Brands have a moral duty to ensure sustainability and ethics are at the core of their operations. 

Following the footsteps of giants

Big businesses are making sustainability a priority: in an Accenture study on corporate sustainability, 99% of chief executives of the world’s top organisations claim that sustainability is crucial to their future success. 

As well as acting sustainably, brands must find ways they can inspire sustainable shopping among consumers. Take Amazon as an example: the retail giant is helping consumers make more sustainable choices by labelling products on its website. 

The new ‘Climate Pledge Friendly’ label shows which items on the marketplace have one or more sustainable credentials. The label is used in all potential categories, from food to electronics, with the sustainable items also listed separately in a newly created section on the website or on the app. There are currently 18 sustainable certifications. 

In a press statement, Amazon said: “Climate Pledge Friendly products are clearly labelled in shopping results, have additional sustainability information on the product page, and are featured in a dedicated section of our store.”

Over 25,000 products on the marketplace already have the label, with FMCG manufacturer Unilever supporting Amazon’s initiative.

“This will drive scale and impact for more sustainable consumption by helping customers easily discover products that are Climate Pledge Friendly and encourage the manufacturers to make their products more sustainable,” said Fabian Garcia, Unilever North America President. 

The time to act is now 

Ultimately, protecting the planet through sustainability will require a joint effort. Retail brands can identify how to operate more sustainably within their own businesses, but they must also ensure their manufacturers, suppliers and consumers play their part, too. 

The onus is on all of us to make positive changes that will help to protect our planet – and the time to act is now. 

At The Delta Group we aim to make a positive contribution to society and the environment by advising our clients on how to embed sustainable practices into their communications, as well as improving our own business practices. For example, we’re switching energy consumption to be 100% green electricity, we’ve invested in new printing presses with better carbon footprints and are capable of switching single-use materials and plastics to more sustainable and recyclable options. To find out more, please email hello@thedeltagroup.com.

Covid has forced many brands to put their plans on hold when it comes to investment in permanent retail projects. But at the same time, the pandemic has left consumers craving those tangible, real-life experiences more than ever before. Could pop-up retail stores hold the solution?

A recent report notes: ‘As soon as normality starts to creep back into life, pop-ups will be perfectly positioned to achieve brand growth while treading carefully into the future.’ 

Pop-ups could offer the door to a wealth of opportunities for retailers, especially in the current climate. They include: 

• Bringing communities together and making your brand central to the experience
• Utilising bookings-only or invitation-only for both exclusivity and hygiene purposes
• Surprising and exciting consumers 
• Inspiring loyalty by demonstrating you care beyond the actual purchase
• Harnessing temporary formats to offer consumers experiences they’ve missed
• Testing new retail technologies with minimal risk

Also tackling this topic, a Retail Sector article adds that pop-ups mean brands needn’t commit to long-lease agreements; meanwhile empty spaces can be filled with a rotation of unique and exciting experiences for consumers. 

In this way, pop-ups are far more flexible than permanent stores; brands are able to scale up or down as required, in line with demand as well as government regulations. 

They’re also flexible in terms of where they can be constructed. As people move away from shopping centres and town centres, opting for local alternatives instead, brands can open pop-ups in unexpected areas and make them talking points. 

Two types of pop-up

Two types of pop-ups are emerging. The first idea retailers are exploring is using pop-ups to deliver experience, entertainment and connection – this is what we typically associate pop-ups with. 

The second pop-up type is a kind of practical fulfilment centre. These stores blend online and offline worlds by allowing customers to drop off returns, displaying online items in real life, or to support high demand for a certain product or range. An important factor in this type of pop-up is being able to seek support from staff – something that satisfies consumers’ need for quality, accessible service. 

All this isn’t to say that physical stores are redundant. There are still many scenarios where traditional is best – for instance, when consumers wish to purchase expensive products like furniture, it’s reassuring for them if they get the impression of longevity when they enter the store. 

Yet, the pop-up model will become increasingly integrated within retailers’ business plans moving forward. There’s a chance that brands will start to experiment with and launch hybrid online-pop-up-flagship store initiatives. 

The pandemic has led to a shift in consumer habits and behaviours and brands must now be more creative in their approach. Pop-ups are just one of the ways they can offer exciting, real-life experiences that will continue to engage consumers. 

We’ve been creating events and experiences for our clients for many years. If you need some help engaging consumers, leave it to the marketing experts at Delta Group, please email hello@thedeltagroup.com.

The coronavirus pandemic has inspired many people to get stuck into some DIY. This is likely down to a combination of spending more time at home – especially during lockdown – and having more time (and potentially money) to spare.

This shift in consumer habits has been great news for retailers in the home improvement space. Just take B&Q owner Kingfisher, which recently announced that the surge in sales witnessed during lockdown has continued even with restrictions easing. 

According to recent reports, Kingfisher revealed a significant 16.6% increase in same-store sales for Q3 to 19 September, as well as a spike in half-year profits. 

The lockdown was tough for the retail group initially, as it decided to voluntarily close stores in order to implement social distancing measures. Yet, when the stores reopened, Brits flocked in their droves, eager to spruce up their homes and gardens while stuck at home.

The ramping up of its click and collect service also saw online sales surge during the summer months. 

Results for the six months to 31 July were a slight improvement on City predictions: actual sales totalled £5.92bn, while forecasts stood at £5.9bn.

Adjusted pre-tax profits increased by almost a quarter (23.1%) compared with 2019, at £415m – City analysts predicted £361m, a 7% rise on the £337m recorded in 2019. UK same-store revenues are reported to have increased by 2.3%.

Kingfisher’s chief executive, Thierry Garnier, confirmed that the promising trend in sales seen in Q2 had continued across all markets in Q3. Inspired by the trend, he announced additional investment in the group’s digital arm, which includes Castorama in France. 

He commented: “The crisis has prompted more people to rediscover their homes and find pleasure in making them better. It is creating new home improvement needs, as people seek new ways to use space or adjust to working from home.

“It’s also clear that customers are becoming more comfortable with ordering online. And delivering value to consumers is imperative against a challenging backdrop.”

At the height of lockdown, Kingfisher announced that the items that saw the biggest increase in sales included paint, wallpaper, plants and compost. This is echoed by paint specialist AkzoNobel, which recently revealed that its total revenue for Q3 is predicted to be close to previous years, despite initial challenges. 

Though trends vary between markets and regions, there’s strong end market demand for decorative paint in Europe as well as South America, and things continue to improve for its performance coatings. 

If you’ve enjoyed strong retail sales recently, you’ll want to ensure the trend continues – and key to this is your marketing strategy. If you need help creating and delivering innovative campaigns that resonate with your audience, please email hello@thedeltagroup.com.

Simon Roberts, Chief Executive of Sainsbury’s, believes that some of the changes to shopper behaviour seen during lockdown will stick. 

Shoppers have suggested that they intend to continue to buy more fresh products and cook at home, while half of additional online shopping orders came from new customers.

Morrisons’ boss David Potts went so far as to call the first half of this year the “renaissance of the British supermarket”. 

Despite profits being down on previous years due to coronavirus, Potts believes the future is bright for supermarkets. In fact, as Retail Week writes, he believes the pandemic has kicked off a new period of prosperity for the sector.

Surge in sales at Sainsbury’s

Sales at Sainsbury’s established stores rose by 8.2%, with grocery sales up by 10.5% and general merchandise up by 7.2%. Meanwhile, sales at Argos increased by 10.7%, helped by a 78% rise in home deliveries combined with demand for items like baking equipment, home office products and garden play structures during the lockdown. Argos continued to trade at 300 outlets within Sainsbury’s supermarkets while its high street stores were shut. 

The return of the big weekly shop 

Explaining what he meant by “supermarket renaissance”, Potts talked about the return of the more traditional, weekly, big basket shop. He noted a shift towards larger baskets and fewer transactions, which according to Potts “shows that customers aren’t shopping around in those medium-sized stores as much as they were.”

Kantar grocery spending data supports this point: customer supermarket visits dropped to 14 in April on average, compared to 17 in “more normal times”. At the same time, average basket spend rose by £7 to £26.02. 

Though this trend eased off during summer, in line with restrictions easing, the constant circulation of coronavirus has resulted in stabilisation. 

There was a slight dip in basket sizes in August, averaging £25 per visit, but that’s still significantly more than the pre-pandemic average of £19. 

Morrisons’ house broker, Clive Black, believes that whether or not the big weekly shop will continue to be a trend will depend on things like people continuing to work from home. 

Pick-at-store models 

The pandemic saw a huge uptick in online delivery and capacity. However, another main driver of the supermarket renaissance was the pick-at-store model implemented by supermarkets like Morrisons, Tesco and Sainsbury’s. It made the businesses more profitable, establishing grocers as key players in the online space.

Sainsbury’s increased capacity to handle online orders by setting up collection points outside stores and took on 25,000 extra staff to help pick orders in shops.

“We are continuing to look at what we can do to satisfy demand,” Roberts has said. Adding that “The situation ahead is very unpredictable. We have made sure the business is ready to handle that.”

Kantar found online accounted for 13.5% of total grocery sales growth in August, predicting it will continue to grow. 

GlobalData analyst Thomas Brereton puts some of Morrisons’ success down to its agility and the partnerships it’s formed. 

The chain has made deals with Deliveroo and Amazon and launched initiatives such as food boxes. So says Brereton, “all of these things may have led to a renaissance in how [Morrisons] see their image within the wider market with customers.”

Black from Shore Capital adds that the store-pick model has solved the problem of delivering groceries to homes in a sustainable and profitable way. 

“Critical to this is that the big four investment means that store-based picking is delivering the capacity increase in online,” Black said. “As a result, the online channel is now no longer the nemesis of the supermarket’s P&L line.”

More investment potential? 

If supermarkets stand to make more online and in-store in the months to come, this could pave the way for more investment opportunities. Black thinks the increasing sales and profits will make UK grocers more attractive acquisitions. 

“In essence, supermarkets are becoming very capital-disciplined assets,” he explained. “New space is running behind market growth, which is driving up cash flow per square foot. They’ve also got ecommerce working profitably. All of these things are suggesting there is a reappraisal of the future value of supermarkets going on.”

Consumer trends are evolving, and you need to evolve alongside them. We offer bespoke creative, display and technology solutions that are designed with your customers in mind. To find out more, please email hello@thedeltagroup.com.