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Supply chain enters Lockdown 2.0 in stronger position than first time around

Britain’s food supply chain is better positioned to cope with the second lockdown than it was in the first wave of restrictions in March.

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Supply chain enters Lockdown 2.0 in stronger position than first time around

The closure of bars and restaurants across the UK will inevitably have an impact on food demand.

 

AHDB estimates that annual pre-Covid out-of-home sales were nearly £80 billion. By October 27, visits to restaurants and places of interest were already down 27 per cent, according to mobility data from Google and are expected to fall further.

 

At the height of the first lockdown, eating out footfall was down by more than 60 per cent.

 

Demand for takeaways is likely to increase and businesses are better prepared than in March. Takeaway lamb volumes were up 89 per cent, cheese up 83 per cent, pork 20 per cent and beef 9 per cent, in the 20 weeks to July 12, according to estimates by research company Kantar for AHDB.

 

Chip shops did not benefit from increased demand, with volumes estimated to be down 4 per cent.

 

Retailers were caught on the hop during the first lockdown with stockpiling leading to empty shelves in late March.

 

Some incidences of panic buying have been reported this time round, but not to the same extent.

 

Retail demand slipped a little over the summer as Covid-19 restrictions were lifted but as the country is locked down and people spend more time indoors, demand is likely to increase again over the winter.


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Beef demand was still 6.1 per cent higher by volume in the 12 weeks to October 4, according to Kantar, with lamb sales 9.5 per cent and pork 6.0 per cent higher.

 

Fresh potato and frozen chip sales were up more than a fifth in the 12 weeks to August 9.

 

Demand for dairy products strengthened throughout Lockdown 1.0, so by July sales of mature cheddar were 1.5 per cent up on the year before, with a 16.3 per cent increase in cream and block butter sales.

 

Semi-skimmed milk sales were only 2.7 per cent higher. Meanwhile, sales of flour jumped 64 per cent in late September, according to Kantar, as people turned to baking as way of getting them through the winter.

 

“We are not expecting the same spike in demand for dairy products we saw in the spring but as people are forced to spend more time at home consumption of a range of products is likely to increase,” said Rebecca Gladman, retail insight manager at AHDB.

 

She added that despite financial worries, some consumers would be likely to want to treat themselves in lockdown, which could help sales of items such as dairy desserts or steaks.

 

However, the imposition of a November lockdown throws Christmas preparations for consumers and the supply chain into doubt.

 

Ms Gladman added: “Christmas normally dominates supply chain planning for most of the second half of the year, but suppliers and shoppers are not sure what restrictions might be in the run up to the 25th of December.

 

That makes anticipating demand very difficult.”

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