COVID-19: LOCKDOWN WEEK 1-2 SOUTH AFRICA · Panic Buying Mar 5 First South African tests positive for Corona Virus Mar 15 Ramaphosa declares a National State of Disaster Mar 23 21-day

April 9th, 2020

COVID-19: LOCKDOWN WEEK 1-2SOUTH AFRICA

IRI Thought Leadership

© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 2

Lockdown Life Update SUmmary

• As we settle into Lockdown life maintenance and

stabilization has firmly cemented this week. Growth has

slowed in Week 2 and we anticipate a muted Easter

performance.

• Anxiety around Health (virus) and Wealth (recession) will

persist in the months ahead due to uncertainty.

• Shopping this week has evolved further as we adjust to this

new, but temporary way of life

– Always ‘make-it-yourself’ cooking

– In-home entertaining (toys, games, baking)

– Renew interest in in-home hobbies (baking continues to

accelerate)

– My home, my castle (spring cleaning and baking)

– Adjusting to restrictions and living without


Coronavirus cases cross the 1.5mill mark globally, Fitch has downgraded our credit rating and the

Rand hits an all time low, whilst SA waits in anticipation on whether the lockdown will be extended

https://www.worldometers.info/coronavirus/

Last updated: April 09, 2020, 09:17 GMT

Sources: https://www.thesouthafrican.com/news/finance/fitch-rating-downgrade-knocks-the-rand-past-r19-to-the-dollar/

https://www.businessinsider.co.za/coronavirus-in-south-africa-everything-we-know-about-covid-19-in-sa-2020-3

Image via Adobe Stock

https://www.worldometers.info/coronavirus/

https://www.thesouthafrican.com/news/finance/fitch-rating-downgrade-knocks-the-rand-past-r19-to-the-dollar/

https://www.businessinsider.co.za/coronavirus-in-south-africa-everything-we-know-about-covid-19-in-sa-2020-3


South African deaths have increased to 18 this week

New York State alone has had more cases than Italy

Cases Deaths

Days since first reported case

34 99 70 67 67

1,529,974 globally 89,427 globally

+50% vs. Previous update +68% vs. previous update


Lockdown

South Africa is on Day 14 of lockdown (09 April 2020)

Dec 31

China alerts WHO

to many unusual

pneumonia cases

in Wuhan

Jan 7

Confirmation

that officials

have identified

a new virus

Jan 20/21

Confirmed cases outside

mainland China in Japan,

South Korea, Thailand & US

Jan 30

WHO declares

global health

emergency

Mar 5

First South African

tests positive for

Corona Virus

Mar 15

Ramaphosa

declares a National

State of Disaster

Mar 23

21-day lockdown

announced to begin on

Thursday at midnight

Jan

2020

Feb

2020Mar

2020

Mar 11

WHO declares

Corona Virus

outbreak a Pandemic

Current Data

Week

Mar 26

Start of SA

lockdown

Mar 27

First death in

South Africa

Feb 21/23

Virus surges in

Italy as officials

lockdown towns

Jan 11

China reports

first deathApr 7

Boris Johnson

admitted to

hospital

Apr

2020

Apr 8

Minister Ndabeni-

Abrahams put on

special leave for

breaching lockdown

regulations


Current data trends reflect South Africans during Lockdown Week 2

Market Response to COVID-19: Expected Phases

Some Consumer Segments, Including 65+, are Likely to Exhibit Behaviors Within the Next Phase Before Their Market Moves into it

PhaseGov’t / Societal

ResponseCharacteristics

Consumer

ResponseExpected CPG Impact

I MonitoringMonitoring for potential incidence but no formal

restrictions

Passive Prevention

Increased sales of virus prevention items, e.g., hand sanitizer, HH cleaners, vitamins

II Containment

Self-quarantines, social distancing, large group

event cancellations, increased work from home

Active Preparation/Prevention

Above +• Stock up on necessities and symptom relief, e.g., frozen

and shelf-stable foods, toilet paper, sports drinks, cold medicine, pain relief

• Start of declines in away-from-home consumption and small-format sales

III Lockdown

Enforced quarantines and travel restrictions; significantly limited personal interaction outside the home

Cocooning

Above +• Increased sales of products enhancing at-home

experience, e.g., DVDs, streaming services, salty snacks, ice cream, chocolate

• Rapid increase in online purchases and frictionless food delivery; massive declines in away-from-home consumption

• Likely to see an increase in Home Maintenance & Garden categories as shoppers look to DIY during lockdown

Note: Data reflected in report does not include Costco or Total e-Commerce.

Mar 27th to

16th Apr Current Data

Week

March 16th

to Mar 26th


Stricter lifestyle restriction have driven slower lockdown growth in SA versus other countries.

Informal food (hawking) and liquor traders are also closed

South Africa Italy UK USA Australia

Alcohol sales allowed

during lockdown

Cigarette sales allowed

during lockdown

Restaurants takeaways &

food delivery allowed

Category restrictions in

store

Item limits per product

Limited number of people

per store

Initially

were

open


0

10

20

30

40

50

08/03/2020 15/03/2020 22/03/2020 29/03/2020 05/04/2020

Total Edible & Non-Edible Grocery Essentials (excl. Liquor & Tobacco)

% Change in Value sales vs. Year Ago

Panic Buying

Mar 5

First South African

tests positive for

Corona Virus

Mar 15

Ramaphosa

declares a National

State of Disaster

Mar 23

21-day lockdown

announced starting

Thursday midnight

Sunday Wk

ending date

Sample of formal retail

1st full week

on lockdown

Pay-day

shopping

occurred a week

earlier this year

before lockdown

A steep decline in essentials growth during the first full lockdown week. Pay day uplifts restricted to one

week as opposed to two weeks


Mar 15

National State of

Disaster declared

Mar 23

21-day lockdown

announcement

Mar 25

Pay-day

Total Essentials

% Value Growth vs. YA

WE = Week Ending

LSM 1-6 continues stockpiling during Sassa grant week and Edible Groceries gain importance over Fresh/Frozen/Perishables.

LSM 7-10 remained in lockdown during the first week and were more likely to purchase Fresh/Frozen/Perishables for meal

maintenance

WE 03/15/2020 WE 03/22/2020 WE 03/29/2020 WE 04/05/2020

LSM 1-6 LSM 7-10

First full

week on

Lockdown 49 52 50 51 53 49

40 37 38 39 37 41

11 11 11 10 10 10

WE03/22/2020

WE03/29/2020

WE04/05/2020

WE03/22/2020

WE03/29/2020

WE04/05/2020

Edible Groceries Fresh/Frozen/Perishables Non Edible Grocery

Value Share to Essentials

LSM 1-6 LSM 7-10

Sassa

grants

shopping


Products to make working from home and cooking easier, topped the growth list vs year ago

across all LSM groups

Cell Phone Hardware & Accessories Cell Phone Hardware & Accessories

Citrus Fruit Games & Puzzles

Spices & Seasonings Citrus Fruit

Games & Puzzles Kitchen Gadgets

Home Audio Home Audio

Frozen Fish Spices & Seasonings

Wheat Wheat

Small Cooking Appliances Small Cooking Appliances

Baking Ingredients Baking Ingredients

Kitchen Gadgets Frozen Fish

Vinegar Potatoes

Onions Onions

Cereals Cereals

Potatoes Braai Acessories

Airtime Medicinal

Phone Data Phone Data

Soft Fruit Creamers

Medicinal Extension cords

LSM 1-6

Top Value Growth Categories % YA - w/e 05 April

LSM 7-10


After stockpiling and pay day, growth has started slowing across Personal Care, but consumers are

still looking for preventative products during the crisis

Wipes, Hand Soap & Sanitizer and Vitamins continue to be in high demand

>100 71-100 51-70 31-50 11 to

300 - 10 -10 to 0

-11 to

-30

-31 to

-50< -50

Value Growth Scale:

Full

Lockdown

Lockdown

announced,

pay day

National State

of Disaster

announced

% Value Growth vs. Year Ago

Mar 15th Mar 22nd Mar 29th Mar 29th

Wipes

Hand Soaps & Sanitiser

Vitamins

Medicinal

Household Cleaning

Oral Care

Personal Care

Toilet Paper

Pet

April 5th


Although 21 of the 26 Grocery & Beverage categories are still growing vs. YA, all have seen a slow

down vs. previous week

Pantry essentials for ‘make-it-yourself’ cooking remains important to consumers


Baking Ingredients

Wheat Flour

Spices & Seasoning

Oil

Rice

Sugars & Sweetners

Yoghurt

Snacks

Soup & Stock

Spreads

Maize

Biscuits

Frozen Meat & Fish

Dry Pasta

Cereals

Milk

Coffee & Tea

Juice

CSD's and Water


Dry Pasta

Cereals

Fresh Meat

Condiments & Sauces

Canned Food

Frozen Veg/Potato

Bread

Confectionery

Cheese

>100 71-100 51-70 31-50 11 to

300 - 10 -10 to 0

-11 to

-30

-31 to

-50< -50

Value Growth Scale:

Full

Lockdown

Lockdown

announced,

pay day

National State

of Disaster

announced

% Value Growth vs. Year Ago

April 5thApril 5th


Retailers continue initiatives to help SA during lockdown

Dis-Chem introduces drive-through Covid-19

testing sites in shopping centre parking lots at

a competitive price of R850

Pick n Pay donates R5 million

to Feed the Nation and asks

the public to contribute

through Smart Shopper points

or direct donation at till

Mr D Food teams up with Checkers to deliver

prescriptions and medication to MediRite pharmacy

customers

Shoprite Group launches daily temperature checks and

plastic face shields for staff

Speedy checkout and priority entry for healthcare

workers, law enforcement personnel and elderly


Local and global Manufacturer initiatives vary from repurposing production capabilities for medical

supplies, safeguarding employees, supporting communities with donations and raising morale with

positive conversations

Tiger Brands has

distributed 6,000 food

hampers in communities

where it’s beneficiary

schools are located

https://www.bizcommunity.com/Article/196/700/202524.html

Supporting research &

production of candidate Covid-

19 vaccines

Donated $10mil to Solidarity

Response fund created by UN

Foundation & WHO

Reckitt Benckiser has

launched a public health

information campaign to

correct misinformation and

debunk common myths

www.covid-19facts.com


Despite Liquor sales being prohibited during lockdown, alcohol suppliers are donating funds and

manufacturing hand sanitiser


Out of stocks are improving with only half of the categories experiencing more OOS than last week

MaizeDry Pasta Convenience

Soup

Total Canned FoodMedicinalBath Soaps Household Cleaning

Frozen Veg Frozen Protein

Substitutes

Wheat

Have out of stock instances increased or decreased vs. last week?

April 7th vs. April 1st

Stock Out Instance = When a product has 0

stock quantity in a store in which it is ranged


Consumers are expanding their bread recipe searches and tuna has replaced hake as consumers

are looking for inspiration

Homemade remedies and bread without yeast recipes continue to top the search related queries list

during lockdown

0

20

40

60

80

100

120

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20

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6

Search Terms – Interest over TimeSouth Africa

Baking Recipes Bread Lockdown extension

Bread Related Query Search

1. Bread without yeast

2. White bread recipe

3. Naan bread recipe quick

4. Bread recipe without yeast

5. No knead bread

Recipe Related Query Search

1. Hand sanitizer recipes

2. Bread recipes

3. Easy bread recipes

4. Tuna recipes

5. Biscuit recipes

Global data up to 22 March 2020

Lessons from Italy


The global demand evolution of consumer spending during Covid-19

What can we expect?

Pre COVID-19 COVID-19 &

LOckdown

Panic Buying

Lockdown

with

Limited OOH

Stock-Pile

Draw-Down

+ New Normal

Average Annual YTD Pre-March March April-July 2020 Post-July

• Baseline scenario dependent on long-term consumption and

Shopping trends

• Lockdown duration-based scenarios essential as regulations

will continue to evolve across various parts of the country

• Different categories will take different paths through the

COVID-19 crisis, depending on

‒ Role in addressing health concerns

‒ Role in at-home consumption

• Economic uncertainty will drive need for Value, and higher

focus on Essentials vs. Indulgence

• Increased unemployment will skew preference for certain

channels and assortments

• Consumer confidence and unease will change omnichannel

dynamics

SCENARIOS OF DEMAND EVOLUTION


In Italy, they had 4 weeks of stockpiling vs SA’s two weeks. Italy is

also experiencing a slow down in growth


During Week 1 of Italy’s lockdown, people’s concerns immediately

focused on the economy and personal health


Italian shoppers reduced their shopping trips, filled their baskets and

bought essentials that would last


Private Label has become more important over time

Consumers seeking value already


What does the new normal look like?

South Africa can expect the same new normal


South African trends are aligned with global trends, but we are also unique

• South African consumption patterns differ slightly from other countries due to:

– Faster reaction from the SA government meant a shorter timeframe for panic

and stockpiling

– Pay day and Sassa grants payouts impacted on weekly trends

– Stricter rules around what is essential and non-essential vs other countries

– Wholesale and independents who are reliant on informal retail will be hard hit by

the restrictions

– [Alcohol sales increased during lockdown in other countries]

• However, similar consumption patterns are also observed

– Primary health and prevention remains a concern

– Make-it-yourself baking and cooking and inspiration from the web

– Ensuing supply of pantry essentials

– In-home entertainment (across all LSM groups)

– A slow down in sales during lockdown


Recession-like behaviours are likely in the coming weeks as COVID-19 impacts the

economy

Trading DownWhere added-value is not

perceived or deemed less

necessary, purchasing

switches to economy, basics

and less frills segments.

Increased prices can also

drive this

Private LabelPeople will be looking for

more affordable solutions,

especially for pantry staples.

Increased prices can also

drive this

Smaller packsThe shift to smaller, low-

priced packs both from

demand from lower income

consumers and

manufacturers downsizing to

improve margins

ConvenienceCloser to home as well as

adding the most value will

become even more important

for consumers as transport

costs are likely to increase

IndulgencesDuring times of hardship, little

indulgences are still an

important part of life and

therefore an important part of

assortment

On-lineDeliveries and click-and-

collect likely to continue

growing as consumers seek

convenience and still aware

of health and hygiene matter


More information about COVID-19 across the IRI world

Visit our website and join our webinars to keep your finger on the pulse around the world

Contact your client representative for more information


THANKYOU!

For More Information, Contact Us…

IRI South Africa

1st Floor, Block D, Aintree Park, Doncaster Road, Kenilworth 7708

+ 27 21 700 7420

Follow us on Twitter: @IRI_INTL

Documents

COVID-19: LOCKDOWN WEEK 1-2 SOUTH AFRICA · Panic Buying Mar 5 First South African tests positive for Corona Virus Mar 15 Ramaphosa declares a National State of Disaster Mar 23 21-day