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Impact of COVID-19 on Food & Grocery(Australia)

Microsoft Advertising. Intelligent connections.

Summary of findingsAustralia introduced closure of non-essential business due to Covid19 pandemics. As a result the food & grocery industry in Australia is undergoing a huge transition with many providers starting to drive key online ordering and delivery capabilities to capture consumer demand.

Market WatchCovid-19 is driving online sales growth in developing FMCG e-commerce markets*

Source: Neilsen

User Behaviourcoronavirus pandemic is likely to have a long-lasting impact on consumer shopping patterns

Source: afr.com

Search TrendsSearch across Food and Grocery categories has skyrocketed in past couple of months

https://www.afr.com/companies/retail/supermarkets-to-enjoy-9b-sales-boost-as-shoppers-eat-more-at-home-20200406-p54hf7

Supermarkets to enjoy $9b sales boost as shoppers eat more at home– afr.com

https://www.afr.com/companies/retail/supermarkets-to-enjoy-9b-sales-boost-as-shoppers-eat-more-at-home-20200406-p54hf7

MarketWatch

Covid-19 is driving online sales growth in developing FMCG e-commerce markets

Source: https://www.nielsen.com/au/en/insights/article/2020/covid-19-the-unexpected-catalyst-for-tech-adoption/

1. “Household spending patterns have been radically reshaped during the crisis”

2. “There has been a surge in online retail and subscription services (+61 per cent), food delivery (+63 per cent), alcohol and tobacco (+33 per cent) and pet care (+28 per cent).”

3. “Stores with a reputation for affordable prices did especially well including Costco, Kmart and BigW. Food outlets McDonald's and Domino's performed strongly as did meal delivery services UberEats and Hello Fresh.”

https://www.theage.com.au/business/the-economy/stimulus-payments-arrest-spending-slump-real-time-data-shows-20200408-p54ida.html

First week of April

Category consumption comparisonsshow some are impacted a lot more than others

https://www.afr.com/companies/retail/supermarkets-to-enjoy-9b-sales-boost-as-shoppers-eat-more-at-home-20200406-p54hf7

User Behaviour

Cautious consumers are likely to cook more at home, order more online and keep their pantries better stocked – afr.com

Staying home means more home cooking

Source: Microsoft Advertising Internal Data. All devices. Jan – Mar 2020

TOP 20 QUERIES

Kids at homebanana bread recipeeasy pancake recipepancake recipebanana cake recipeanzac biscuits recipescone recipechocolate cake recipecake recipebrownie recipecookie recipecarrot cake recipe

Family favouritesbread recipethermomix recipe communityfried rice recipepumpkin soup recipespaghetti bolognese recipezucchini slice recipepasta recipespizza dough recipedamper recipe

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Daily trendline for recipe related searches

A high percentage of people are cooking at home as a result of the lock-down’s implemented across multiple countries.

Current market trends indicate that this trend will continue in coming months ahead as markets adapt to social distancing and regulations

GWI Coronavirus Research | March 16-20 | across 13 countries | For AU, n = 1,004

Search Trends

Food & Grocery on the Microsoft Search network has seen consumer demand increase by

in March compared to January

+120%

Microsoft internal data | Food & Grocery | Jan vs Mar 2020

Strong search uplift following stricter COVID-19 precautionary measures

Microsoft internal data | Food & Grocery | Jan - Mar 2020 compared to 2019

Mar 11:Declared covid-19 as a pandemic.

Mar 23: Non-essential business shut down

Mar 17: Companies introduced work from home

guideline

week ending date

16%14%

18%

30%19% 19% 16% 15%

24% 24%

40%

55%

81%

0

0.5

1

1.5

2

2.5

0%10%20%30%40%50%60%70%80%90%

4-Jan 11-Jan 18-Jan 25-Jan 1-Feb 8-Feb 15-Feb 22-Feb 29-Feb 7-Mar 14-Mar 21-Mar 28-Mar

Food & grocery search trendsSearch Vol. YoY Search Vol.(indexed)

Grocery delivery and household supplies saw sharp uplift even before precautionary measures were enforced…indicating the panic buying

Online grocery delivery queries skyrocketed in March (compared to Jan)

Queries with highest uplift (compared to Jan)

Coles online +153%

Coles online shopping +419

Woolworths online +221%

Woolworths online shopping +493%

Aldi +28%

New search terms that didn’t exist in Jan

Woolworths home delivery

Coles home delivery

Microsoft internal data | Food & Grocery | Jan - Mar 2020

4-Jan 18-Jan 1-Feb 15-Feb 29-Feb 14-Mar 28-Mar

Supermarket & Online Grocery Delivery Beverages Food Household supplies

Weekly Search Trend

Microsoft internal data | Food & Grocery | Jan - Mar 2020

35%

67%

86%

134%

707%

Meal kits

Beverages

Food

Supermarket & online grocerydelivery

Household supply

Sub-category search growth compared to Jan

Strong spike across Food & Grocery categories indicate people are keeping their pantries stocked

Driven by toilet paper

Beverages, 10%

Food, 17%

Household supply, 6%

Meal kits, 4%

Supermarket & online grocery delivery, 64%

Sub-category split (March Search Volume)

Microsoft internal data | Food & Grocery | Jan - Mar 2020 compared to 2019

lite n easy

hello fresh

youfoodz

Marley spoon

light n easy

dinnerly

Meal Kits

Coles

woolies

Aldi

IGA

Harris Farm

foodland

foodworks

Supermarkets & online grocery delivery

+156% uplift

+133% uplift Dan Murphy

BWS

Liquorland

first choice liquor

boozebud

IGA liquor

Beverages

+44% uplift

+76% uplift

+45% uplift

+79% uplift

We have seen a strong growth across consumer demand for brands across a few key categories

+11% uplift

+28% uplift

Microsoft internal data | Food & Grocery | Jan - Mar 2020 compared to 2019

1/01/2020 15/01/2020 29/01/2020 12/02/2020 26/02/2020 11/03/2020 25/03/2020

Queries containing "online" search trend

Search Volume Linear (Search Volume)

Coles was the most searched query with “online” intent

Microsoft internal data | see appendix for more terms

MoM 46%uplift

All searches containing “online” | March 2020 | search volume

1/01/2020 15/01/2020 29/01/2020 12/02/2020 26/02/2020 11/03/2020 25/03/2020

Queries containing "online" search trend

Search Volume Linear (Search Volume)

Woolies was the 2nd most searched query with “online” intent

MoM 46%uplift

Microsoft internal data | see appendix for more terms

All searches containing “online” | March 2020 | search volume

What was Microsoft audience searching to get “delivered”

/01/2020 15/01/2020 29/01/2020 12/02/2020 26/02/2020 11/03/2020 25/03/2020

Queries containing “delivery” search trends

Search Volume Linear (Search Volume)

All searches containing “delivery” | March 2020 | search volume

Microsoft internal data | see appendix for more terms

MoM 1000+%uplift

Key Takeaways1. As consumers shift towards online, business have a huge opportunity to connect their

customers with the right product and provide a great customer experience.

2. User behaviour shifts from out-of-home dining to food delivery and home cooking seems to be a more permanent shift in habit.

3. Defend your Brand entity and be a part of user journey as they find ways to adjust to this new world.

4. Take advantage of your search campaigns to understand your customers better and plan your next steps.

5. Connect your customers to products on first click.

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