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The anniversary of the first national lockdown means we can now begin to compare grocery sales against the record-breaking levels seen in the early days of the pandemic. This time last year it was just the beginning and we were adjusting to schools and workplaces closing and busy making extra trips to the supermarket - or frantically booking delivery slots - to fill our cupboards ready for lockdown.

One year on and the data shows that shoppers are today once again making more trips to the supermarket than we had been doing more recently and beginning to buy less online, as lockdown lifts and the vaccine rollout boosts confidence. But does this mark a behavioural shift?

The latest figures from Kantar show that grocery sales rose by 5.7% to £31.6 billion in the 12 weeks to 18 April, although it has to be said that this marks a slowdown in the rate of growth seen a year ago when shoppers panic-bought at the start of the Covid-19 pandemic.

The latest figures show that take-home grocery sales growth accelerated to 6.5% in the four weeks to 18 April 18, and the number of trips to grocery stores rose by 4% month-on-month in that same four week period. On the flipside, online grocery sales growth has halved since the height of the pandemic, down to 46%.

There is little doubt though that overall the pandemic has been good for business for grocery stores. Today J Sainsbury revealed that sales had risen by 7.8% over the year, reflecting the switch in spending at pubs and restaurants to eating at home. In the final quarter, with most of the UK in lockdown, sales were up more than 8%.

That is not to say the pandemic has been a win-win situation for the supermarkets though. Just today Sainsbury’s showed how the special measures it has had to implement in order to keep going throughout the pandemic, has hit it hard. And it showed something of the impact that will have been felt by non-essential retailers up and down the country as it took a hit on its standalone Argos stores. The closure of more than 400 standalone Argos stores took a £423 million bite out of its underlying pre-tax profits.

They came in 39% lower at £356 million in the year to 6 March. Better though than the consensus £338 million that had been forecast. It is here though the pandemic left its mark. The figure includes the impact of repaying £410 million in business rates relief and £485 million in costs incurred just coping with the coronavirus pandemic.

It was though the cost of the standalone Argos stores that made up the bulk of the further £617 million in exceptional charges that took the company to a full-year statutory loss of £261 million.

Sainsbury’s has said it expects exceptional costs associated with the pandemic to begin falling away and that it is “comfortable” with analysts’ forecasts for this year. However, the UK’s second-largest food retailer booked another raft of charges relating to its restructuring programme as it seeks to cut costs and reinvest the savings in new products and lower prices.

But, as restrictions ease and the hospitality sector re-opens, the big question is what the impact will be on the supermarket groups.

Already we are seeing food prices falling for the first time since January 2017. They were down by 0.6% in April and that is even more notable when you see that compares with a 0.3% rise in March.

And this figure was particularly affected by fresh food prices, which fell for the fifth consecutive month by 1.5% in April – an acceleration from the 0.8% decline the previous month.

However, according to Helen Dickinson, chief executive of the British Retail Consortium, the decline in food prices was driven by consumer behaviour at the start of the pandemic. Back in April last year retailers tried to do everything they could to deter shoppers from stockpiling, which makes the fall seem more marked.

Shop price deflation eased to 1.3% in April, compared with the 2.4% decrease in March, according to the BRC-Nielsen shop price index.

Ms Dickinson is of the view that falling prices are unlikely to last, with Brexit red-tape, rising shipping costs due to international supply issues, as well as increasing global food and oil prices, all likely to leave their mark, potentially leaving retailers with no option but to pass on some of these costs to consumers.

For the supermarket groups these come against an already highly-competitive and crowded marketplace, where the focus will always be on market shares.

At the last count the figures show that while Sainsbury’s, the UK’s second-largest supermarket, saw sales rise by 7.3% to hold share steady at 15.3%, it is the only one of the ‘big four’ to do so.

Tesco increased its sales by 8.5% and grew market shares yet again, capturing 27.1% of the market, up by 0.3 percentage points compared with the same 12 weeks last year. Asda grew ahead of the market and nudged up its market share from 15% to 15.1%, while Morrisons’ sales growth of 8.7% meant a share increase of 0.1 percentage points to 10.1%.

Ocado’s sales jumped 33.9%, taking market share up to 1.9% from 1.5% a year ago, sales at sales at Waitrose rose by 5.1%, but frozen food retailer Iceland’s sales increased by 14.3%, with particularly strong growth among families with children.

The German discounters Lidl and Aldi, which have not benefited from the rise in digital sales, grew by 2.9% and 1.5% respectively.

So what comes next? Sainsbury’s chief executive Simon Roberts said: “Like our customers, we are looking forward to feeling more normal over the coming months. But we are also cautious about the economic outlook.”

Alongside all the uncertainty, from the ongoing pandemic to rising food and transportation costs, the very real competition between each of these groups, over prices, store numbers (and locations) and online/offline presence, remains and along with it the fact that customers will always be the determining factor in whether these businesses sink, take top slot or fall out of favour. And that is a battle that may never be won.

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