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Fred Searle

BY FRED SEARLE

Online sales rise but users plateau

Sales growth continues at slower pace as retailers struggle to attract new online customers

Online sales rise but users plateau

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Online grocery sales are continuing to grow, but the number of new users is plateauing as retailers struggle to entice new customers to the channel.

That’s the news from market researcher Mintel, which reported that the online grocery sector is still adding to its share of total grocery retail sales, up from 6.1 per cent in 2016 to seven per cent in 2018. 

Last year sales of online groceries in the UK hit £12.3 billion, up nine per cent from 2017, and online sales are set to continue to grow, with sales expected to reach £13.6bn this year and £19.8 million by 2023.

But while 45 per cent of Brits like to shop electronically, away from the hustle of the store, it seems retailers are struggling to entice new shoppers to the channel – the percentage of customers shopping online for groceries dropped from 48 per cent in 2015 and to 45 per cent in 2018.

The main demographic for grocery deliveries is the 25-34 age bracket, with 61 per cent of shoppers in this group doing some online grocery shopping and over a quarter (27 per cent) saying they do all or most of their grocery shopping online.

However, it seems that middle-aged and older shoppers are more reluctant to join the online shopping revolution, and their reluctance is growing. 

While 35 per cent of over-45s report buying some groceries online, the number of Brits in this group who have “never bought groceries online and have no interest in doing so” has grown from 34 per cent in 2015 to 42 per cent in 2018.

Nick Carroll, associate director of retail research at Mintel, said: “Online grocery is, alongside the food discounters, one of the fastest-growing segments within the wider grocery sector. However, growth is slowing, and the number of users is plateauing as retailers struggle to encourage new customers to try their services.

“Many consumers remain reluctant to buy fresh products online, concerns around substitutions persist and delivery charges are still off-putting, particularly in a market where value is key. However, most importantly, online services are still best suited to the traditional big-basket weekly shop, at a time when consumers are increasingly shopping on a top-up or when-needed basis. 

For this reason, he said, more retailers are launching trial services designed to tap into the potential market for same-day or small-basket online grocery delivery.

“The difficulty is that such services, at present, are costly to both the customer and the retailer, limiting their appeal and potential geographic rollout,” he said.

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