What you need to know

The online grocery market experienced growth of just 2.3% in 2019, a significant slowing of the 9.2% growth recorded in 2018, and accounted for 7% of the wider grocery sector. In part this is explained by the continued impact of the closure of Tesco Direct on the market size, but even accounting for this, growth within the market slowed for the fourth consecutive year. Looking ahead the COVID-19 outbreak will see growth bounce back significantly in 2020 and longer term the outbreak may serve to introduce a host of new customers to the channel.

Whilst in the early part of the last decade growth was being driven by encouraging new shoppers to try online for the first time, the number shopping online has plateaued in recent years. Some 50% of consumers now do some online grocery shopping, although just one in 10 (11%) say they do all of their grocery shopping online. With new shopper numbers plateauing growth is being driven by encouraging existing shoppers to do more of their grocery shopping online, with 35% of current online grocery shoppers saying they had increased their use of online services in the past year.

There are still some major barriers to online grocery shopping, with lack of control when choosing fresh products (23%), cost (19%) and too many substitutions (13%) some of the key reasons users have lessened their use of online grocery services in the past year. However, despite these issues there are still significant growth opportunities within the market, with in-home delivery having the potential to break down barriers for retailers and something 30%, rising to 39% of 16-34s, say they would be happy to use.

Products covered in this Report

This Report includes both market and consumer data around the retailing of grocery products online.

Our market size for online grocery includes:

  • Major grocers’ online sales of food and drink and other grocery products

  • Online-only grocers’ sales (eg Ocado)

  • Specialist food and drink retailers’ online sales

  • Online-based food box and recipe box delivery schemes.

It excludes:

  • Foodservice delivery (eg restaurant or fast food takeaways ordered online)

  • Home delivery of groceries not ordered online.

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