62% of people who eat and buy cereals state that swapping their favourite cereal brand for a cheaper version is a good way to save money. Such willingness to trade down suggests that brand loyalty is not as strong as the big brands’ dominance in the market might suggest. This will be particularly pertinent as the recession places pressure on consumer incomes.

The boost to the category brought about by the nationwide lockdown is expected to be short-lived. The renewed focus on the nation’s health following the pandemic will put heightened pressure on the category. However, the expected shift towards more working at home long term will see more at-home breakfast occasions, these holding potential also for breakfast cereal.

As the lockdown continues to ease and a ‘new normal’ is reached, competition from out-of-home breakfast occasions and alternative breakfast choices will return. Furthermore, the recession and income squeeze will see consumers looking to make easy savings in their grocery shops, dialling up the need for branded cereals to prove their value proposition.

The continuing consumer focus on health, particularly gut health, provides further opportunities for the category to tap into. With the connection between good gut health and the immune system already being drawn within some areas of the media, this can enable breakfast cereals to tap into the expected focus on immunity prompted by the pandemic.

• The impact of COVID-19 on the breakfast cereals market

• Launch activity and opportunities for 2020

• Attributes consumers most look for when choosing breakfast cereals

• Frequency of usage of RTE and hot cereals

• Consumer behaviours and attitudes related to breakfast cereals

• Attributes associated with breakfast cereals.

This update on the impact that COVID-19 is having on the market was prepared on 27 August 2020.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20^th March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23^rd March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks.

On 10^th May 2020, the Prime Minister announced revised guidance, recommending that people who could not work from home should return to the workplace, and giving people more scope to spend time out of the home. Further relaxations to lockdown rules were announced in the week of 23rd May, including gradual reopening of non-essential retailers, and increased opportunities for social interaction across households.

On 23^rd June, the Prime Minister announced that where two metres was not possible in an enclosed space, social distancing should allow people to keep ‘one metre plus’, enabling smaller businesses that were unable to implement the two-metre rule the possibility to open again. Hospitality businesses and other public places were allowed to reopen from 4 July. Indoor gyms, swimming pools and leisure centres reopened on 25^th July 2020.

From 24th July, it became mandatory to wear face coverings in shops and supermarkets. Rules on travel remain fluid.

From 1st August, the government changed its guidance about asking people to work from home where they can, giving employers in England more freedom to decide whether staff should return to their place of work. Schools are at present expected to reopen as normal in September, but with social distancing measures in place.

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

This Report examines the UK retail market for breakfast cereals. It excludes sales through foodservice channels.

For the purposes of this Report, breakfast cereals are segmented into RTE cereals and hot cereal products. The former comprises any cereals that are served without heating them, such as corn flakes or muesli. The hot cereal segment consists of porridge, oatmeal and instant hot oat products.

Cereal bars and other breakfast products are excluded from the scope of this Report, but reference to them is made where relevant in the light of their role as competing products.