UK online grocery grows to 4%

IGD article by Vanessa Henry reproduced and edited by the Author.

27% of British grocery shoppers claim to have bought some of their food and groceries online in June. This is the highest level to date, and compared to 22% who said the same three years ago. We’ve also seen an increase in the number of shoppers who claim to buy most of their grocery shopping online – 10% compared to 7% in 2010. This also means that over a third of claimed online grocery shoppers are using the channel for the majority of their shopping.

(Source: IGD ShopperVista)

This trends looks set to continue – nearly half (47%) of all main grocery shoppers say they would like to use the online channel for their grocery shopping in the next two to three years. This represents a significant opportunity for growth.

IGD’s brand new UK grocery market forecasts show that the online channel will more than double in value to £17bn, and will be worth 8% of the market, in 2019. Compared with this, I would estimate the Canadian online grcoery market is at 0.5% of a roughly $100 Billion grocery industry. Much of the channel’s recent growth in UK has been boosted by some significant developments in the market in 2014. For example, at the start of the year Morrisons launched its new internet service. The retailer has a couple of distinctive features in its service including expert reviews on its fresh produce and a particularly tailored approach its online butchery. At the same time, other retailers have enhanced their websites.

Morrisons tailored online butchery service


Click & Collect has also become a real buzz theme in the channel, and is helping to boost significant interest. Asda and Tesco were the first to introduce a grocery Click & Collect service a couple of years ago, mainly located in their store car parks. Both retailers have subsequently broadened their collection points to other locations such as business parks and Tube stations in London. Sainsbury’s has also just announced they are to launch a similar service at certain Tube stations in London. What I think is really interesting about the Click & Collect service is it allows retailers to target particular shopper groups not already in their catchment area. It also appeals to those shoppers who may have been put off by the traditional home delivery model as it might not have been convenient for them to wait at home to receive orders.

(Source: IGD, Retail Analysis)

People are now more willing to shop around at different types of grocery formats. They have more options available to them than ever before. With such a significant investment in new and existing services, the online channel is particularly well placed to grow even further in the future. The rationale for suppliers to play in this channel is a no-brainer, and by developing capability, there is the opportunity to gain above fair share growth for your brands, delivering real incremental growth for your business




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