Newly released EPoS data from PayPoint has revealed the scale of sales changes driven by lockdown, tobacco law changes and Covid-19-led availability issues.
The payments specialist said data from the three-month seasonal period pre-Covid and July 2020 showed a 32% increase in average daily baskets per store coupled with a 64% increase in average basket value. PayPoint chief executive Nick Wiles said this showed a “boom in appreciation” for local shops.
This included a dramatic increase in category sales volumes such as frozen goods (+221%), alcohol (+73%), chilled (+43%), bread and cakes (+43%), household goods (+42%), grocery (+39%) and tobacco (+31%). PayPoint said the only categories in decline over the period were lottery & scratch cards (-92%) and greeting cards (-6%).
Top 100 changes
Analysis of the data by RN revealed the dramatic impact the shift has had on stores, with just 61 of the 100 bestselling lines in independent stores before the crisis remaining in the top 100 as of July 2020. The number of soft drinks in the top 100 fell from 30 to 23, driven by a decrease in energy drinks sales. The pre-Covid average showed nearly one in six top 100 products were an energy drink. By July, this had fallen to just one in 17. Another hard-hit category was mints & gums, while high-profile departures included the Daily Express, which fell from being the 77th most popular purchase to the 127th, and the production-issue-hit Buckfast wine, which went from the 61st most-common purchase to the 293rd.
The biggest shift over the period was in alcohol, which went from 7% of the top 100 to 16%. The boost was driven by seven further beer lines breaking the top 100, with cases of Corona jumping 72 spots to enter the top 50 lines. Paul Neades, partner at licensing specialists The Licensing Guys, said the trend was also due to a higher proportion of stores adding an off-trade section. He told RN: “There’s definitely been strong demand for new alcohol licence applications during lockdown as independent stores seek to better serve local needs as people shop more locally. Alcohol and grocery ranges seem to be growing and often becoming more bespoke to the local area.”
Despite the menthol ban and track-and-trace deadline in May, the sales data shows the importance of tobacco remained constant, still accounting for one in four lines sold in the average independent store using PayPoint’s EPoS scanning tools.
Scott Taylor co-founded direct-to-store tobacco wholesale dispensing firm Baccostore, which supplies 60 stores across Northern England. He told RN: “It’s difficult to see the impact of the law changes because of Covid. The little-talked-about trend is that tobacco sales are massively up because lockdown has really damaged the illicit trade.” However, he said this rising demand had caused cash-flow challenges for stores now needing to hold higher stock levels, including the newly non-compliant menthol and non-track-and-trace lines.
PayPoint’s data suggested a large number of independent stores broke the new laws by continuing to sell menthol and non-track-and-trace stock after the 20 May deadline. Analysis of the data by RN showed that, on average, a shop selling the 58 top menthol and non-track-and-trace tobacco products before the ban was still selling 20 illegal packs per day in June and 7.3 illegal packs per day in July. The data showed retailer compliance varied on lines owned by different manufacturers. Sales of JTI, PMI, Imperial and BAT non-compliant lines in independent stores fell by 90%, 84%, 81% and 78%, respectively, from April to June, despite all firms urging retailers to comply with the law and offering swaps or credit for returning non-compliant stock. Even though non-track-and-trace lines had a one-year sell-through period, compliance with the law remained lower than with menthol lines, accounting for 56.3% of non-compliant packs sold in July (not including non-track-and-trace menthol packs).
PayPoint also commissioned a survey of 2,000 UK adults to understand the habits behind the changing sales patterns. It said the predominant trend was ‘convenience converts’, with 56% of UK adults admitting they only paid their first visit to their local convenience store under lockdown, rising to 68% of 18-to-24-year-olds. The rise in younger convenience customers also suggested the need for range reviews due to differences in buying habits. For instance, the 18-to-24 demographic are more likely than any other to buy healthcare items from a convenience store, according to PayPoint.
Find out more on our coronavirus information hub for retailers