Online Grocery Retailing - UK - March 2015
Introduction
 
Some 17% of adults did all or most of their grocery shopping online in 2014 – confirming the UK’s leadership in online grocery retailing. But the market is maturing and indeed levels for those doing all or most of their grocery shopping online fell last year from 20% to 17%. 

Moreover just 5.1% of the total food retailers’ sector sales are generated online. So online shoppers are actually under-indexing in value sales. 

Our consumer research this year explored people’s attitudes towards possible innovations and improvement for online grocery shopping. The overarching themes of our findings were control and clarity. Customers want more say in how they like their goods, how and when they are delivered and a better two-way dialogue with retailers regarding their order. 

Our other consumer questions this year asked: 

●	How much of their grocery shopping do they do online?
●	Which retailers do they use for the majority of their grocery shopping, online or in-store?
●	Where else do they do their grocery shopping, online or in-store? 
●	What are the advantages of shopping online for groceries? 
●	What are the disadvantages of shopping online for groceries? 

Definitions
The online grocery sector size is defined as the online sales of grocery products (largely food and drink but also grocers’ other FMCG – Fast-Moving Consumer Goods – sales online).

It includes: 

●	Major grocers’ online sales of food and drink and other grocery products
●	Online-only grocers’ sales (ie Ocado)
●	Specialist food and drink retailers’ online sales
●	Online-based food box delivery schemes.

It excludes: 

●	Online general merchandise sales by major grocers (eg electricals or furniture ordered from direct.tesco.com or clothing ordered from asda.com)
●	Foodservice delivery (ie restaurant/takeaways ordered online)
●	Home delivery of groceries not ordered online.

We also include a segment size and forecast for major grocers only – stripping out smaller, more niche retailers such as food specialists. 

Market size and market shares
We have recalculated some aspects of the market size and market shares since the 2013 report, primarily because of new data released by Sainsbury’s and Asda. 

Financial definitions
Sales: turnover as reported by the company, excluding VAT.

Operating profits: profits after depreciation, but before interest and tax and excluding non-trading income such as the sale of fixed assets and any exceptional items, including provisions.

Pre-tax profits: operating profit less net interest payable and exceptional charges, but before tax, dividends and other appropriations.

Operating margin: operating profits as a percentage of sales.

VAT
In general, all company sales data is quoted excluding VAT.

Consumer spending data is quoted including VAT unless specifically stated otherwise.

VAT-inclusive sales are used for the market size and forecast.

VAT-exclusive sales are used to calculate market shares.

The UK reduced the standard rate of VAT from 17.5% to 15% on 1 December 2008, before increasing it to 17.5% on 1 January 2010 and 20% on 4 January 2011.

Other 
Value figures throughout this report are at retail selling prices (rsp) unless otherwise stated. Market sizes at constant 2014 prices have been calculated using Mintel’s food deflator.

Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland.

Abbreviations
B2B	Business-to-Business	
CFC	Central Fulfilment Centre	
CPI	Consumer Prices Index	
DB	Defined Benefit	
DC	Distribution Centre	
EDLP	Every Day Low Pricing	
FCA	Financial Conduct Authority	
FMCG	Fast-Moving Consumer Goods	
GDP	Gross Domestic Product	
GMI	Global Market Insite Inc.	
M&S	Marks & Spencer	
na	Not Available or Not Applicable	
Nielsen Media Research	For further information please contact nmr.communication@nielsenmedia.co.uk	
ONS	Office for National Statistics	
SKU	Stock Keeping Units	
VAT	Value Added Tax