Stay-at-home consumers indulge in cooking, but cosmetics sales suffer from work from home trend, new IRI COVID-19 impact report reveals

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The stay-at-home and work-from-home culture means more people are spending time indulging in cooking, and, for those who can afford it, are opting for premium products and ingredients. This is according to the latest (November) Markets Dashboard – FMCG in Western Economies report from IRI, a global leader in big data, technology and analytics solutions for consumer, retail and media companies, which highlights the impact of COVID-19 on the FMCG and retail industry in key European markets and the US.

With less dining out and socialising due to COVID restrictions in many countries, including France, Germany, Greece, Italy, the Netherlands, Spain and the UK, people are spending more time at home cooking from scratch, driving demand for healthy food, treats and cooking ingredients. In the UK, flour and bread making sales are up 41.9% and chilled pastry sales up 35.2%, while in Italy sales of prepared vegetables are up 76.6% (IRI: % value change, 5 weeks to 26 Sept 2020).

Working from home, however, has had the opposite effect on cosmetics sales, presumably because video calls only require the minimum amount of make-up! Cosmetics products are in the bottom 5 categories in France (-13.3%), Italy (-16.1%) and Spain (face make-up -40.1%, lipstick -59.4%) while in the Netherlands, razor blade sales are down 17.9% 

Shoppers continue to focus on hygiene and safety during the pandemic, driving sanitary and cleaning product sales in the non-food category. Cleaners, disinfectants and gels appear in the top 5 categories across nearly all markets, with notable increases in Spain where soap (without water) products are up 2828.3% and Greece where antibacterial gel is up 2214.9%.

Joan Driggs, VP of content and thought leadership, IRI comments: “As most of us settle into a second period of lockdown across Europe, we can expect to spend more time eating, working and cooking at home. Those who can afford to indulge are opting for premium products, perhaps to treat themselves after a difficult year or because they are spending less on dining out. Demand for home cooking ingredients is high and we expect there to be plenty of festive cooking as people celebrate Christmas at home.

“This is a real opportunity for retailers and brands to push indulgent treats and premium festive products in the next few weeks as shoppers make their lists and put their orders in online. Price, however, remains important as unemployment rises in Europe and shoppers are more cautious of spending, so we may see further promotional activity and growth in private label products.”

Other report trends:

  • Online shopping growth remains high and is the only channel that is expanding its range; the opposite of discounters. In Italy online is forecast to reach 4% share by the end of 2021. In France, it¹s expected to reach 7.7% share by the end of this year.
  • Despite the current recessionary environment, discounters are struggling against other channels, with a lack of investment in e-commerce a major weakness.
  • Private label sales remain lower than expected due to range reductions as manufacturers trim assortments. Winners are brands of mid-size and small companies in many countries.
  • Promotions on brands are back to support demand and challenging discounters¹ prices and product discounting.

Europe vs. the US

  • While overall FMCG sales continue to grow in Europe, up 6.3% (IRI: 5 weeks to 27 Sept 2020) compared to the same period a year ago, the US is outpacing European markets in terms of total value sales and unit demand.
  • Food and drink sales in the US remain strong, up 10%, but there was a decline in non-food sales of around 2.5% from July to the end of September, while private label food and drink sales also lost share.
  • The US lags behind European countries in promotions, down nearly 10% vs. year ago for the past 52 weeks, although there are some signs of improvement, especially in food and drink, which during the past five weeks is down just 1.5%.