Market basket grows by 12% during pandemic with neighbourhood traders as big winners

BarcelonaThe year of the pandemic has been the year of mass consumption. It's all good news for the retail sector: household spending and the size of the market basket have increased, all shopping channels are growing, local shops have been revived and electronic shopping is on the increase. All this in a year in which Mercadona, Carrefour and Dia have lost market share. The three chains are still among the supermarkets where most people shop in Spain, but Dia loses third place to Lidl.

"During lockdown, customers tried other options, and since then have not returned to the same level of loyalty [regarding large supermarkets]," explained Florencio Garcia, a Kantar director who has analysed the data. That is, customers have returned to large surfaces, but also shopping in businesses they discovered during the first wave of the pandemic, This has been noted especially in fresh produce.

In addition, "the specialist market recovered during the de-escalation [after the confinement], but at that time we began to talk about supporting neighbourhood trade, so the trend continues in the following months," he summarises. In other words, the dynamics during the second half of the year began to level out the loss of market share that this type of business had been accumulating over the last 15 years and that was being captured by large-scale distribution.

Thus, the pandemic has left several changes in the panorama, also in general terms. For example, in the increase in spending in the market basket, which is 12.7% above where it was in 2019, an upturn that is explained above all by the hardest months of confinement, in which the distance compared to last year reached 25%. "When we analyse how this has translated into patterns we see that the way we shop has changed," explains García: the frequency of supermarket visits falls by 2.7%, but the baskets are 14% larger.

Lockdown triggers e-commerce

Where the health situation has also had a positive impact is in e-commerce, which has increased its turnover by 62% and also obtained the best data in terms of market share in Catalonia. Overall, if the sector had been growing a few tenths of a percent for years, in 2020 it advanced by 2.6%. "The phenomenon of e-commerce is global, and within this globality we had pending challenges to grow: the fundamental one, to generate habits", continues García. In this sense, e-commerce's market share was much lower in Spain than in the rest of Europe, something that has begun to change during the pandemic

The data indicate that eight out of every ten purchases made online in this sector are still from traditional supermarkets. Even so, the phenomenon has also had a positive impact on Amazon, which achieved a market share that is close to 6%, 1.7 points more than it had in 2019.

Dia leaves the podium

The fall of Dia has also been commented on by the authors of the report. "It continues to reach 60% of Spanish households, it is the chain with the largest number of physical stores [despite the fact that it is shedding some, it remains at a great distance from the other brands] and has invested heavily in rebuilding the brand," García explained to downplay this fall. Yes, "to see Dia grow again we will have to wait until it stops selling premises".

Specifically, and according to data from Kantar, Dia has lost 0.6% market share over last year and 1% of customer loyalty. What has penalised it (like Mercadona, which lost 1.1% share, and Carrefour, which lost 0.3%) is precisely the fact that Spanish consumers have spread their purchases across several establishments and that neighbourhood trade has revived.