Major growth predicted for online grocery

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Michael Barker

BY MICHAEL BARKER

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Major growth predicted for online grocery

IGD says online will be fastest-rising grocery channel over the next five years with over 50 per cent growth

Major growth predicted for online grocery

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Online is expected to be the fastest-growing UK grocery channel in the next five years, new research suggests.

According to IGD figures, online grocery is expected to grow by 53.8 per cent between 2017 and 2022 to £16 billion. It currently represents £10.4bn of the £184.5bn UK food and grocery market. 

Two in five (42 per cent) of UK grocery shoppers now use online as part of their grocery shops every month, while three in five (60 per cent) plan to shop online for groceries and have them delivered to their home in the next two to three years.

Those who already shop online are also doing so more frequently, the research indicates. Some 28 per cent of online shoppers claim to shop once a week or more online, compared with 20 per cent in 2013. Online delivery saver passes are helping to lock in shopper loyalty and increase frequency of shops, with 29 per cent of online shoppers claiming to be subscribed to this type of scheme.

Speaking at this week's IGD Online & Digital Summit, the organisations's shopper insight manager Vanessa Henry said: “More shoppers are engaging with online grocery shopping than ever before. What’s really interesting though is that, on the whole, online is not being used in isolation.

“What we call ‘omnichannel shoppers’ are having a big impact on the grocery market, with over half (54 per cent) of shoppers claiming that they use five or more different channels every month, as well as buying from 12 different store brands on average. Retailers should therefore consider how they are driving loyalty so that they become the brand of choice, for example with online delivery saver passes or special promotions.”

IGD research also suggests that the most popular combinations for online shoppers are using online and larger stores, and online and convenience stores. A significant 40 per cent of shoppers said they have used either a blend of online and supermarkets or hypermarkets and convenience stores in the last month for their food and grocery shopping. But there is still huge potential to grow the online opportunity in the future, IGD added.

IGD senior innovations and trends analyst Toby Pickard said: “The online segment is a great area to invest in and we have seen plenty of innovative examples around the world from retailers and suppliers looking to tap into the online and digital market further. By creating new products and services which offer personalisation, efficiency and speed, businesses are more likely to meet the dynamic and changing expectations of shoppers, and ultimately benefit from the growth opportunities the world of online grocery has to offer.”

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