Trade Intelligence provides insight, commentary and profiles on the SA Fast Moving Consumer Goods trading environment and the major retail and wholesale players. We promote effective and profitable trading relationships and upskill best talent across the industry.
Level 3 is in full swing and SA is taking advantage of Liquor availability
• South Africans feel some relief from lockdown with the re-opening of liquor on 01 June 2020, ranking Liquor at the top of the growth list this week
– Groceries growth was muted as consumers shifted spend to Liquor; 10% of LSM 1-6 and LSM 7-10’s spend was apportioned to liquor, which is higher than the average share of 6-7%
– In the top 20 item ranking, LSM 1-6 preferred Beer, whereas Gin and Brandy were more popular amongst LSM 7-10
– However, the opportunity to re-stock liquor cabinets benefited Gin, Whisky and Rum. Is this a boost Whisky needed to remind consumers of an old favourite? Are these the first indications of Rum regaining popularity?
– Globally, Liquor performed well during lockdown and IRI will continue to track Liquor trends in SA in the coming weeks
• Channel Switching during COVID-19 in SA during the first month of lockdown:
– Similar to the trends IRI has seen globally, the panic buying week and restriction of movement during lockdown caused South Africans to change their shopping behavior in their channel and store format of choice
– Hypermarkets gained >10% share of trade in the panic-buying week as consumers looked to these stores for a one-stop shop offering value, large packs and product range under one roof
– During lockdown, consumers have ‘stayed local’ and are choosing stores within close proximity to their homes
– Online sales increased >50%, a trend IRI expects to continue
– Forecourts and pharmacies have lost feet into store with less consumers filling up for petrol and less mall visits
– Covid-19 implications for retailers and manufacturers: the new shopper experience needs to assure shoppers of store health and safety, the provision of products they can trust, targeted assortment and online shopping.
– A challenge for both retailers and brands will be retaining consumer loyalty, having shopped in new stores and adopted new brands during the pandemic
• Traditional sales forecasting models need to be adapted and updated regularly to accurately take into account the COVID-19 effect and the changing consumption patterns. IRI has developed a Machine Learning based algorithm that reevaluates each factor and enables accurate estimations of probable changes in COVID-19 wear-out effect on sales patterns, as well as the potential effect of a second wave