Nielsen Homescan research reveals that Australian online grocery sales increased significantly, up 45 per cent, over the past few weeks, compared to annual online growth of 34 per cent during Q4 2019. The growth is being driven by consumers seeking to avoid crowds in-store as shoppers stockpile grocery and medical items as concerns grow around the spread of COVID-19.
For retailers, online stockpiling is putting logistical pressure on home delivery networks, while a number of brands are grappling to keep up with demand. This week Woolworths imposed a limit on how much toilet paper shoppers could buy online and in-store after panic buying cleared out supermarket shelves.
Rising consumer concern is having a ripple effect on the sale of online grocery products outside of hand sanitiser and toilet paper, with basic foodstuffs including pasta (+76 per cent), eggs (+72 per cent), canned meals (+71 per cent), tea (+62 per cent), rice (+58 per cent), flour (+55 per cent) and shelf-stable milk (+50 per cent) all recording significant jumps in dollar sales during the four weeks ending 22 February 2020 compared to the same period last year.
The trend demonstrates the importance of online strategy for retailers and brands which requires understanding how it fits in within shoppers’ buying patterns and overall spending behaviour.
According to Nielsen the rush to stock up on these goods will have an almost immediate impact on supply chains for manufacturers of the most sought-after goods.
The measurement company said while replenishment will eventually catch up in most categories, especially where production is local, there are some instances where shortages could hang around—particularly for products manufactured in, or where packaging is sourced, from China.
Products that come off factory lines or go through distribution systems in virus-impacted countries could also face logistical issues.
According to the research, pantry stockpiling will simply bring forward future purchases and there will be a mid-term sales trough as these products are gradually consumed. However, other categories, particularly shelf-stable food products, will experience expansion as households potentially consume more in-home than they usually would.