The Big Picture
THE BIG PICTURE
How is COVID-19 affecting how we feed ourselves?
COVID-19 is having a significant impact on the UK food system. To understand what this will mean for citizens, we’ll be monitoring change in these areas:
- Food prices – how will supply chains be affected in the UK and globally; we’ll be tracking any shifts in trade and domestic production as well as food prices
- Fruit and vegetable sales – will production and supply side changes lead to changes in demand for fruit and veg, and what are the impacts of lockdown on the rest of our diet?,
- Social cohesion and food insecurity – we will be monitoring levels of food insecurity and economic vulnerability and tracking any evidence of social breakdown
- Infection and mortality rates – we will be setting our analysis against a backdrop of the evolution of the pandemic
Here we’ll be tracking the impact of COVID-19 on the food system more broadly. We’ll be mapping developments against the wider background of infection and mortality rates, looking at whether COVID-19 and the subsequent social distancing measures and restrictions put in place by UK governments impact on three main topic areas: UK food prices, UK sales of fruit and veg, and any longer-term effects on social cohesion and food insecurity.
We want to learn from this emergency about how citizens, communities, policy makers and businesses respond to the crisis so we can respond better to future threats and inform our ambitions for food system transformation in the future.
On March 16th we were first advised to change our typical food shopping habits by avoiding pubs and restaurants, before more restrictive ‘lockdown’ measures were brought in on March 23rd.
In February 2020, when the ONS did its monthly report on the Consumer Price Index there had been no significant changes in month on month food prices. Average prices for most items were flat. But given that the earliest documented transmission within the UK didn’t appear until 28 February 2020 (with the first recorded deaths in March), we will be tracking whether the pace of the infection spread and subsequent restrictions affect food prices.
We know from the 2008 recession that sudden economic shocks can cause countries to impose export bans leading to subsequent food price rises. Indeed, several countries have already started to restrict food exports but these restrictions are so far on a small scale. IFPRI explains here why bans are the worst possible response to the crisis.
In addition to trade, supply chains are likely to be affected by reductions in labour, particularly for crops which are labour-intensive. With 84% of our fruit and 50% of our veg currently imported (the majority coming from Spain and Italy, both countries badly affected by COVID-19), it will be important to monitor potential supply chain disruptions and their impacts on availability and prices.
Sales of fruit and veg and consumer shopping behaviour
Data kindly provided to us by Kantar for Food Foundation analysis showed that March 2020 (week ending March 22nd) was the biggest month of take-home grocery shopping ever seen in the UK. Sales were up 23.8% on the previous year, with 93.3 million additional grocery shopping trips made compared to the same period the year before – a 16.4% increase.
As March progressed, the escalation of concerns about the pandemic and regulatory action against a background of increasing infection rates can be clearly correlated to shopping behaviour. In the week ending March 22nd, no doubt in anticipation of lockdown on the 23rd, shoppers made an average of two extra trips and spent £26 more per household compared to the week before. Additionally:
- All grocery retailers saw double digit sales growth as households stocked up, but those on the lowest incomes stocked up least.
- Independent and convenience stores saw the largest increase in year on year sales – it’s likely that this dovetailed with the longer queues and empty shelves seen at many of the larger supermarkets towards the end of March, which may have motivated consumers to change their usual shopping habits.
- While supermarkets saw a 22% increase in sales, convenience store sales grew by 30.1% and discounters by 31.2%.
- Capacity and access issues also appear to have impacted on consumer shopping behaviour. Increased demand for online delivery slots meant that many experienced order issues, the likely reason for the relatively small increase in internet grocery sales at 11.7%.
Changes can also be seen in terms of what people bought. Unsurprisingly, frozen and tinned (ambient) foods sold more than fresh foods, with the fresh category seeing an uplift in year on year sales of 16.8%, compared to a 28.1% increase in frozen foods. Canned goods saw the largest share change with fresh becoming less important to shoppers as the prospect of self-isolation and less frequent shopping trips loomed. Although the vast majority of food categories saw a sales uplift, fruit, veg and salads saw relatively less impact with shoppers opting for canned goods, savoury carbohydrates and snacks, and frozen prepared foods instead.
Time will tell whether sales of long life and non-perishable items will slow as households work their way through stocks, and consumers regain confidence in the large retailers’ ability to keep shelves stocked – perhaps with a resulting resurgence in sales of fresh foods and fruit and veg.
However, with increasing rates of unemployment, potential production and supply side changes, and with increased psychosocial stress no doubt impacting on food preferences, it may be that we will see a shift into more processed and less perishable foods given their longer shelf life, affordability, and palatability.
Social cohesion and food poverty
Assuming that social distancing measures continue over the coming weeks with associated implications for the economy and household incomes, we plan to monitor the potential impact on civil stability should increasing numbers of people struggle to afford food. In Italy, as the government’s lockdown measures start to bite, there are emerging reports of unrest and food poverty. In the UK, a YouGov survey commissioned by the Food Foundation less than a fortnight into lockdown found that 6% of those surveyed had ready taken out a personal loan or had to borrow money as a result of COVID-19. We intend to track the continuing impact of COVID-19 on household finances and food security in regular polls over the coming months. It is crucial that steps are taken to protect the economically vulnerable, as well as the medically vulnerable.
Key developments and commentary
One month into lockdown, food poverty is on the rise in Italy
People in Italy have been living under strict lockdown conditions for a month now, and with many unable to earn money, citizens are struggling to afford and access food. The Italian government has agreed to pay part of people’s wages, but payments are yet to arrive.
Watch the BBC’s report here.
Egg prices may be impacted by ‘stretched’ supply chains
Egg producers have warned that prices could rise as coronavirus hits supply chains. Feed cost increased by 10% in March, and processors are having to redirect production destined for foodservice and hospitality into retail.
Read more in The Grocer’s article here.