Lockdown 2.0

Hand written 'Closed Sign' in shop window


By Tim Wilkinson

In the second national lockdown we saw food service and hospitality businesses restricted to takeaway only. The only option to ‘eat out’ was at outdoor street food markets, who could continue trading. A poll of 242 food business operators during the week of the announcement of the lockdown found support for the measures was divided (41% supported, 43% did not support, 16% undecided). In late October, business groups warned of the potentially devastating effects on hospitality and food service sector, emphasising the need for business aid and the prospect of a loss of 750,000 jobs. With bars, cafes, pubs and restaurants only able to offer takeaway, staff have been laid off and some hospitality workers are facing homelessness as a result. Although the extension of the furlough scheme has helped to retain staff in some cases, it may not be enough to keep businesses trading, for instance, where mandated closure and negative cash flow has caused a build-up of rent arrears.

Closure of hospitality businesses in lockdown 2 has also put pressure on suppliers and wholesalers serving the food service sector. Although schools, care homes and hospitals still need supplies, without food service customers, industry leaders warned that some wholesale businesses will become unsustainable. Strains on supply chains prompted reflections on the resilience of the food system and the ongoing pressures of the pandemic were found to be impacting some food exports, such as Scottish red meat and offal (which has fallen 8% according to levy board Quality Meat Scotland).

We have now heard that that the tiered system will return and I expect that the impacts of the second national lockdown will become clearer over the next month or so. November and December are of course a crucial trading period for many food businesses, and the altered system of restrictions will shape the strategies businesses can use to resume trading and recover.


Two National Lockdowns Compared

Like the first lockdown, it has been suggested there may be some benefits for local and independent food shops. Delivery of local food, through start-ups like Farmdrop, also look likely to continue. Garden centres staying open might also have supported speciality food, especially in the run up to Christmas. Research from Springboard, found that, 63% of people will spend more in local shops in the run up to Christmas 2020, while 36% will spend more on food compared to last year. We know some independent food businesses who made agile responses to increased demand for takeaways and home delivery benefitted during the first lockdown. But we heard from our Expert Panel this month that with larger and global businesses now well prepared for delivery and click and collect, competition will be higher. The pressures of lockdown 2 on independents may be harsher.

Similar, although not identical, to the first lockdown, there was a dash to stock-up ahead of the November lockdown; queues and shortages of some products were reported. However, this time the rush was not just to purchase food to eat at home, but to restaurants, and pubs, and for non-food retail shopping.  High-street footfall was up, at least in post-Covid terms (although it was still 28% down compared with last year, according Springboard data cited by the Financial Times). There was some stockpiling of products like sugar, flour and pasta. For instance, sugar sales were 74% higher than the same week in 2019. Once again, purchase of familiar foods is expected to grow in the lockdown and Premier Foods (makers of Mr Kipling cakes, Bisto gravy, Ambrosia and Bird’s custard) are expecting increased sales. So it looks like lockdowns are continuing to fuel a diet of familiarity and comfort.

Compared to the first national lockdown, many food businesses had better systems in place for managing demand this time. Supermarkets were better prepared to manage customer flows, operating traffic light systems or marshals in an extension of existing customer management arrangements developed over the summer/early autumn. While there was some panic buying prior to the lockdown, I haven’t found reports of long queues for supermarkets during the lockdown. Perhaps a combination of supermarkets messaging (for customers to shop alone) and online delivery options lowered footfall in supermarket stores.[1] Jo Whitfield, Chief Executive of the Co-Op said that consumers are spending more on ‘top-up shops’, which have come to complement a shift to ‘big shops’ and online orders, developed in the first lockdown. So more frequent, but shorter shopping trips, may also be spreading footfall in lockdown 2 as customer behaviour adapts.

There has also been continued evolution of customer management, such as the launch of Marks and Spencer’s Book and Shop system, a virtual queueing system where you can book a shopping slot and avoid queuing outside. Waitrose and Sainsbury’s are also trialling similar systems, so customers may see more of this next year. Being so new, virtual queuing probably didn’t have much of an effect on lockdown supermarket use, but may become more apparent in the context of ongoing restrictions. In the first national lockdown supermarket ranges were reduced and rationalised.  Even in June ranges were down 9% compared to pre-Covid. But recent research by Assosia found that the numbers of stock keeping units and promotions in nearly all supermarkets has all but returned to pre-pandemic levels. Supermarket supply chains seem to have been better prepared and adapted to Covid restrictions in lockdown 2.

The second lockdown has seen the benefits of the development of the at home market for meal kits – which allow customers to cook or reheat restaurant food at home. Global companies such as the Mindful Chef, Gousto and Hello Fresh have seen soaring subscribers. But local alternatives have also emerged, such as Prepped (there are of course many others) which delivers meal kits from multiple restaurants (in Cambridge and Saffron Walden areas) without a subscription. In 14 interviews with restaurants, an Evening Standard article gives reports from businesses that the market for online sales is becoming saturated and a strong sense of the precarious financial position that some businesses, who are making up for sales with meal kits, are in.

The tiered system will reopen much of the economy, but the survival of many food businesses is still in question. As Covid restrictions change food businesses and consumers are trying to keep up. We will have to see how the renewed tiered system affects the way we make, sell, buy and eat food.


[1] If anyone could point me to any supermarket footfall data for lockdown 2, I would be very interested to know whether numbers have dropped, or whether footfall had spread more evenly across the day, lessening customer pressure.

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