Understanding the Current Grocery Landscape: Key Insights from Kantar’s Presentation

In May, we had the pleasure of welcoming Beatrice Lugli, Consumer Insight Director, and Hasan Aziz, Client Executive, from Kantar to our Altitude office. Kantar, a leading data, insights, and consulting company, provided us with the latest data on the “UK Grocery Shopper State of the Nation.” This session was attended by 22 of our team members, representing departments including Production, NPD, Supply Chain, Commercial, Finance, and Technical.

The presentation delved into the current grocery landscape and highlighted key consumer trends that are crucial for us to monitor. In this article we’ll share five of our key takeaways from this insightful presentation, relevant to the fresh produce sector, building consumer confidence, and understanding their buying habits.

1. Consumer Spending Shifts

One of the major points highlighted in the session was the narrowing gap between take-home value and volume sales in the grocery sector. We've observed a noticeable increase in in-home consumption occasions compared to pre-pandemic levels. This trend indicates that consumers are still spending more time at home, which significantly impacts their grocery buying habits and demand for produce.

2. Inflation and Consumer Confidence

Inflation is projected to stabilise at 2-3% throughout 2024, with wage growth outpacing inflation in the short term. This environment is likely to bolster consumer confidence and their willingness to trade up to, provided promotions are effective. Historically, when inflation drops below 4%, shoppers are more inclined to opt for higher quality or premium products. Recent inflation figures announced by the ONF indicate that we have already reached this point.

3. Produce Sector Growth

The produce sector is showing robust volume growth, surpassing overall grocery volume growth. Promotional activities, including price cuts and volume-based deals, are significantly driving this growth. Our focus on promotions is helping to stimulate volume sales and encourage consumers to trade up within the produce category.

4. Retailer Loyalty Programs

Loyalty card ownership has become widespread, with major retailers expanding their base of highly loyal shoppers. These loyalty programs, coupled with everyday low-price (EDLP) schemes, are vital for maintaining customer loyalty and driving sales in the fiercely competitive retail landscape.

5. Behavioural Changes in Consumption

Long-term changes in consumer behaviour, such as increased in-home eating and a preference for simple, budget-friendly meals, are expected to continue. Consumers are favouring tried and tested meal options like burgers, chicken nuggets, and classic dishes that help manage costs. Health remains a significant factor, with many consumers seeking foods that align with their dietary needs, though convenience and versatility are also crucial considerations.

These insights from Kantar’s presentation underscore the evolving dynamics in UK consumer behaviour, the importance of effective promotions, and the critical role of loyalty programs in the produce sector. Understanding these trends will help us better cater to our consumers’ needs and enhance our market strategies moving forward.

The detailed findings from the presentation provided our team valuable guidance for navigating the current market landscape. Following the session our team were fizzing with ideas to leverage these insights to drive our success in the fresh produce sector.