Hello Gousto and farewell Tesco Metro: the winners and losers of changing customer habits

News this week that Tesco are scrapping their Metro format and transitioning more stores to the Tesco Express brand comes as the shift in consumer behaviour continues to re-shape and challenge the grocery sector. This follows similar moves last year from Sainburys and Marks & Spencer, who before the pandemic hit were seeking to capitalise on the increase in convenience culture.

The shift to working from home, and changes in consumer priorities brought about by the pandemic, have had a profound impact on consumer behaviour and supermarkets will need to continue to innovate to retain market share. The recipe box industry has experienced a boom in the past year and is one of the clear winners in the current climate. The FT reported recently that "Mindful Chef has reported a 452 per cent rise in customer numbers since the end of March, as well as a 387 per cent increase in its recently launched sideline in frozen meals. Some customers have spent more than £500 in one order." Rival brands Gousto and Hello Fresh are also experiencing significant growth in new customers.

Popularity of the recipe box format extends beyond pure convenience, with customers seeking variety from their own cooking after a year of staying at home. And, no commute means some people have more time to prepare meals. Is this sustainable growth though? As the UK restrictions lift and hospitality re-opens, demand for 'at home' options may wane - particularly in the warmer months and with an opportunity for consumers to resume travel and dine out with friends and family.

Another 'one to watch' in the next quarter will be delivery - the boom in sales for Deliveroo, Uber Eats and Just Eat during Lockdown has been well documented. As lockdown eases, who will be the winners and losers in share of consumer spend? What is clear is that disruption for traditional grocery players will continue in the UK and across other markets.