Impact of Covid-19 on the Spanish Food Market

ASINCAR has been examining how the Covid-19 situation has impacted how consumers buy their foods, where, what they buy, their habits (spending most time at home) and all these elements have an obvious influence on the food chain as well as on the different commercial channels. Moreover, Covid has brought the closure of all Food service and therefore firms with a major share in this segment have suffered strong negative impacts. As a result most are trying to immediately restructure their companies to the new situation with the temporary laying off of most of the staff. In this article we will briefly describe these components for the Spanish Food market:

How are Spanish consumers reacting to the Covid-19 situation?

  • Infant products, cleaning and personal care articles have experienced increases of 40%. Rice, beans, preserved foods as well as pasta and long-life products, are the categories that have a bigger rise compared to their average
  • The number of visits to the supermarkets and other shops has been reduced to a minimum and online channels have exploited this (see below some numbers).
  • The initial trend of buying just essential foods, during the first confinement days, has adapted over the next weeks adding to the cart indulgence products (chocolate, nuts), alcoholic drinks and gourmet products. Free social time is currently at home and through mobile, computer.
  • People are rediscovering traditional culinary practices, spending more time in the kitchen and preparing more elaborate dishes (e.g. sales of flour and yeast for the preparation of bread)

How has the Covid-19 crisis affected the Food commercialization mix?

  • Regional supermarket chains (15% of the share, 3 points more than 2019) as well as big corporations with neighbourhood shops (e.g. DIA group, the retailer with the most shops in Spain, has increased sales 6,6%, the biggest in the last year) have experienced a big increase. This is a direct effect of buying really close to home due the health situation (hyperproximity).
  • Online shopping increased 75% during that period, reaching  2.8% of supermarket sales versus 1.6% in pre-crisis. Regional supermarkets have also shown this trend, reaching in some cases a 5% of total incomes. And this rise could be higher as one of the main problems faced by retail during this lockdown was the impossibility to properly manage demand, with waiting lists of 2 weeks as well as the suppression of this channel by the biggest retail group Mercadona. Interestingly, the delivery mode click & collect is currently 5 times more in demand than in 2019.

How will the post-Covid Consumer behave?

  • Consumers are spending more free time at home and behaviour is different when  outside the home. Generally, the focus is on more basic and cheaper products. So, spending on food will grow by 2% and it is expected that a more rational buyer, who is less impulsive will look more at the price.

Based on these new consumer habits, trends, structures of the market as well as forecasts, we will need to adapt our business rapidly, trying to gain main value from the new opportunities that have arisen.

References: Kantar reports about the impact of Covid in Spain