What’s the next number in the following sequence: 3, 12, 29, 48, -4, 5, 13, -15, 12. Give up? If you’re thinking maths isn’t your strongest suit right now, don’t worry: your guess is as good as Mike Coupe’s. The figures are Sainsbury’s weekly sales growth percentages since the start of the financial year and they illustrate perfectly the outrageous swings and unfortunate arrows of grocery’s good fortune.
In the early weeks of the coronavirus crisis the direction of travel was only one way. It’s getting trickier now. As we move from the stockpiling phase to the calorie switch phase, channel mix is playing an increasingly important role. But there are some fairly wild curveballs being thrown.
So who’s hitting home runs? And who’s pinching first base?
The most surprising result in April’s Kantar numbers was Aldi’s negative sales growth. OK, so it’s off the back of brilliant sales figures in March (and non-food retailers would kill for any sales) but Aldi is at something of a disadvantage due to its smaller stores, northern geographical bias, and lack of online capacity.
In contrast, Tesco has the full suite of options in its hand. And in the last six weeks, it has doubled its online grocery capacity - and still can’t meet the demand. As CEO Dave Lewis says: “In the last six weeks, we’ve built probably the biggest grocery delivery business in the world, but we know we need to do more - and we will.”
Meanwhile Iceland’s 250% increase in online capacity, announced last week, is even greater (in percentage terms) and this week the Co-op announced plans to accelerate the rollout of its online delivery service, while Costco is also getting in on the act. And how long can Aldi and Lidl keep putting off plans for online grocery deliveries?
But it’s not just about online. The Co-op’s astonishing 33% growth (and the 77% growth of ‘other grocers’) is more about local convenience and a desire to avoid lengthy supermarket queues than an impressive scale-up in online groceries that many independents have undertaken. In contrast, Marks & Spencer isn’t faring so well despite tonnes of convenience stores. But there’s the rub. All its franchise shops are shut. Half its stores are closed. No one wants its sandwiches. And unfortunately there’s no online deliveries till September. Meanwhile Waitrose has had plenty of practice in scaling up online production - a rare fillip for John Lewis chairman Sharon White as she reverses out of predecessor Sir Charlie Mayfield’s disastrous restructure.
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