Table of Contents
Executive Summary
-
- Impact of COVID-19 on the specialist food and drink retail sector
-
- Figure 1: Short, medium and long-term impact of COVID-19 on specialist food and drink retailers, March 2021
- The market
- Specialists suffer as footfall plummets and ecommerce surges
-
- Figure 2: Market size and forecast: retail sales of specialist food and drink retailers, 2015-25
- Wages plummet as economic downturn hits
-
- Figure 3: Average weekly earnings, by consumer price index, January 2016-December 2020
- Companies and brands
- A broad sector consisting of independents
- Greggs still dominates, but takes a hit in 2020
- Hotel Chocolat’s experience in ecommerce pays off
- The consumer
- Butchers and bakers the most popular specialists
-
- Figure 4: Specialist food and drink retailers typically used, December 2020
- Bakers particularly appeal to younger consumers
-
- Figure 5: Specialist food and drink retailers typically used by average age and affluence, December 2020
- Over a quarter of shoppers find specialists intimidating
-
- Figure 6: Attitudes towards specialist food and drink retailers, December 2020
- Specialists could consider supporting local communities to build loyalty
-
- Figure 7: Key drivers of overall satisfaction with specialist food and drink retailers, December 2020
- Value and convenience are key to encourage customer visits
-
- Figure 8: Factors to encourage shopping at specialist food and drink stores
Issues and Insights
-
- COVID-19 pandemic underlines the importance of ecommerce
- Opportunity for specialists to capitalise on rise in localism
The Market – Key Takeaways
-
- COVID-19 hit consumer confidence and spending plummets
- Post-pandemic growth on the horizon
- Specialist numbers continue to drop
- Online grocery sales surge
Market Size and Forecast
-
- Specialists struggle as footfall drops and online surges
-
- Figure 9: Short, medium and long-term impact of COVID-19 on specialist food and drink retailers, March 2020
- Sales drop as pandemic and economic downturn bite
-
- Figure 10: Market size and forecast – Retail sales of specialist food and drink retailers, 2015-25 (prepared on 15/03/21)
- Figure 11: Market size and forecast – Retail sales of specialist food and drink retailers (excluding VAT), at current and constant prices, 2015-25
- Market drivers and assumptions
-
- Figure 12: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 09/09/21)
- Learnings from the last recession
-
- Figure 13: Annual % change in all grocery retail sales (excluding VAT), and by broad category, 2007-12
- Forecast methodology
Market Segmentation
-
- Butchers account largest share of sector
-
- Figure 14: Specialists by type as a percentage of total number 2020
- Specialist numbers continue to decline
-
- Figure 15: Number of UK enterprises, by type of specialist food and drink retailer 2017-20
Market Drivers
-
- Food and drink prices rise again in third national lockdown
-
- Figure 16: Food and drink inflation, January 2020-January 2021
- Wages take a pounding after COVID-19 triggers economic downturn
-
- Figure 17: Average weekly earnings, by consumer price index, January 2016-December 2020
- Consumer confidence remains volatile amidst COVID-19 and Brexit worries
-
- Figure 18: Financial confidence index, January 2015-Febuary 2021
- Retail sales drop sharply during COVID-19 lockdown
-
- Figure 19: Monthly UK retail sales (excluding fuel), by value, January 2017-January 2021
- Consumers are increasingly invested in their local communities
-
- Figure 20: Attitudes towards local and British sourced products, 2020
Companies and Brands – Key Takeaways
-
- Greggs suffers from collapse in footfall
- Hotel Chocolat benefits from ecommerce nous
- HelloFresh was 2020’s big spender
- Naked splits from Majestic
Competitive Strategies
-
- A sector of independent retailers
- Greggs remains the dominant player
- Hotel Chocolat’s experience in ecommerce pays off
- A bumper year for HelloFresh
- Acquisitions and restructuring
- Leading retailers cut in-store produce counters
-
- Figure 21: Key financials of the leading food and drink specialist retailers 2017-20
- Holland & Barrett cuts store estate
-
- Figure 22: Outlet numbers for leading store-based specialists, 2017-20
Launch Activity and Innovation
-
- Specialist retailers meeting demand for new diets
-
- Figure 23: Asda’s vegan-only counter concept, January 2021
- Recipe box kits take off amidst pandemic
-
- Figure 24: Dishoom’s bacon naan kit, June 2020
- Plastics are still a problem
- The return of the milkman
-
- Figure 25: Milk & More delivery service, January 2021
- Specialists finding new ways to engage consumers
Advertising and Marketing Activity
-
- Top spenders in 2020 double their ad-spend
- 2020’s big spenders were all ecommerce focused retailers
- HelloFresh leveraged influencers to reach customers
- Riverford Organic stresses sustainability
-
- Figure 26: Total above-the-line, online display and direct mail advertising expenditure by leading specialist food and drink retailers in 2016-20
- Digital attracted the greatest percentage of advertising spend in 2020
-
- Figure 27: Selected leading UK specialist food and drink retailers: % of recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2020
- Nielsen Ad Intel coverage
The Consumer – Key Takeaways
-
- COVID-19 fears lead to shift in specialist shopping behaviour
- Specialists lag behind when it comes to online retail
- Since the pandemic consumers are shopping more locally
- Specialists appeal most strongly to higher-income consumers
- Consumers visit specialists infrequently
- Over a quarter of consumers find specialist retailers intimidating
Impact of COVID-19 on Consumer Behaviour
-
- Consumers spending more on food since the COVID-19 outbreak
-
- Figure 28: Consumer purchasing on food and alcoholic drinks, 4-12 February 2021
- COVID-19 accelerating online retail
-
- Figure 29: Changes in consumer behaviours due to the COVID-19 pandemic, 4-12 February 2021
- Younger shoppers visiting more since the pandemic
-
- Figure 30: Change in shopping behaviour since COVID-19, December 2020
- Consumers shopping more locally since the outbreak
-
- Figure 31: Attitudes towards shopping in specialist food and drink retailers since COVID-19, December 2020
- Older shoppers lagging behind with online retail
-
- Figure 32: Attitudes towards shopping in specialist food and drink retailers since COVID-19, by age, December 2020
Specialist Food and Drink Retailers Used
-
- Butchers and bakers most popular shops
-
- Figure 33: Specialist food and drink retailers typically used, December 2020
- Men and women have similar shopping habits
-
- Figure 34: Specialist food and drink retailers typically used, split by gender, December 2020
- Most consumers visit more than one specialist
-
- Figure 35: Repertoire analysis of specialist food and drink retailers typically used, December 2020
Demographics of Specialist Food and Drink Retailer Users
-
- Men are more likely to use specialist stores
-
- Figure 36: Specialist food and drink shoppers, by age and gender, December 2020
- Specialists attract higher-income shoppers
-
- Figure 37: Specialist food and drink shoppers, by age and gender, December 2020
- Bakeries attract younger consumers in particular
-
- Figure 38: Specialist food and drink retailers typically used by average age December 2020
- Butchers appeal most to those living in rural areas
-
- Figure 39: Selected specialist food and drink retailers by geographical location, December 2020
Frequency of Specialist Food and Drink Retailer Usage
-
- Specialists are not used frequently
-
- Figure 40: Frequency of visits to specialist food and drink retailers, December 2020
- Younger consumers visit more frequently
-
- Figure 41: Frequency of visits to specialist food and drink retailers, by age, December 2020
- Nearly a third of bakery shoppers visit once a week
-
- Figure 42: Frequency of visits to selected specialist food and drink retailers, by type of specialist, December 2020
Attitudes towards Specialist Food and Drink Retailers
-
- Specialists may be appealing, but supermarkets are convenient
- Room to improve for specialists on popular causes
-
- Figure 43: Attitudes towards specialist food and drink retailers, December 2020
- Nearly 30% of consumers find specialist retailers intimidating
-
- Figure 44: Agreement with statement “shopping at specialist food and drink retailers is intimidating”, by selected specialists, December 2020
Satisfaction with Specialist Food and Drink Retailers
-
- Just 13% of consumers were not satisfied with the products purchased at specialist retailer used last
-
- Figure 45: Satisfaction with specialist food and drink retailer shopped at last, December 2020
- Quality produce and service are vital for specialists
- Specialists should consider supporting local communities and producers
-
- Figure 46: Key drivers of overall satisfaction with specialist food and drink retailers, December 2020
-
- Figure 47: Overall satisfaction with specialist food and drink retailers – Key driver output, December 2020
- Methodology
Factors to Encourage Shopping at Specialists
-
- Value for money and convenience are key for consumers
-
- Figure 48: Factors to encourage shopping at specialist food and drink stores, December 2020
- Older consumers more interested in value and location
-
- Figure 49: Factors to encourage shopping at specialist food and drink stores, by age, December 2020
- Value particularly important for those who visit butchers
-
- Figure 50: Factors to encourage shopping at specialists, by type of specialist, December 2020
- Location and helpful staff important for those who visit farmers’ markets
-
- Figure 51: Factors to encourage shopping at specialists, by type of specialist, December 2020
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Data sources
- Financial definitions
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
-
- Forecast methodology
Appendix – Key Driver Analysis
-
- Interpretation of results
-
- Figure 52: Overall satisfaction with specialist food and drink retailers – Key driver output, December 2020
-
- Figure 53: Satisfaction with specialist food and drink retailers, December 2020
Back to top