Eat Out to Help Out scheme knocked £155m off supermarket sales

Britain’s supermarkets saw a slowdown in sales as a result of the Eat Out to Help Out scheme, fresh research showed today.

In the four weeks to September 6 year-on-year sales growth at the UK’s food retailers decelerated to 8%, the slowest rate since April 2020, Kantar data showed. Growth for the 12 weeks to September 12 was 10.8%.

In total, consumers spent £155 million less in the supermarkets in the latest four week period compared with July, with alcohol sales taking a hit. Alcohol sales dipped month on month, with wine down 5% and beer down 10%.

The Eat Out to Help Out scheme ran each Monday to Wednesday in August offering Britons discounted food at restaurants, cafes and pubs, supported by taxpayers.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Grocery growth tailed off in August as the Government’s Eat Out to Help Out scheme got underway and people were encouraged to return to offices and resume normal routines.

“Diners’ confidence built throughout the month and footfall increased during each week of the scheme, culminating in the final bank holiday Monday when dining out accounted for two and a half times greater share of consumer spend than the pre-Covid average.”

McKevitt added: “The chance to see colleagues, friends and family in person again seems to have reignited personal grooming routines – sales of hair styling products were 17% higher in August than July, hair removal treatments were up by 11% and deodorants by 3%.”

Online grocery sales rose by 77% year on year in the past four weeks, although the it dropped back to 12.5% of total sales, down from a peak of 13.5%.

“This is not just about people going out to eat in restaurants, August also brought shielding to an end for many vulnerable and at-risk people,” McKevitt added.

Several of the standout performers since the Covid crisis began continued to do well. Ocado – which has benefitted from the surge in online grocery orders – remains the UK’s fastest growing retailer, with quarterly sales up 41.2%. The company launched into joint venture to supply Marks & Spencer food earlier this month.

The Co-op saw revenues rise by 13.4%, but increased by more than double this rate in the North of England, where local lockdowns mean consumers are continuing to shop closer to home, Kantar said.