Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Online grocery continues to be the fastest-growing segment of the grocery sector…
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- Figure 1: Total online grocery market size (including VAT), 2012-22
- …but is equally the smallest
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- Figure 2: Online grocery sales as a % of all grocery retail sales, 2012-22
- Online grocery sales peak in December, but take their greatest share in November
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- Figure 3: Average weekly retail sales of all online grocery retailers, January 2015-January 2018
- Companies and brands
- Tesco the dominant player
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- Figure 4: Leading online grocery retailers’ estimated market shares (excluding VAT), 2017
- The Amazon brand is strong
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- Figure 5: Attitudes towards and usage of selected brands, September 2017
- The consumer
- Just under half do some online grocery shopping
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- Figure 6: Online grocery usage, December 2017
- Young families a key audience
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- Figure 7: Online grocery usage, by parental status, December 2017
- Convenience an obvious driver
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- Figure 8: Why users shop online for groceries, December 2017
- Bulky items most popular
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- Figure 9: Types of products typically purchased when shopping online for groceries, December 2017
- Tesco the most popular retailer
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- Figure 10: Online grocery retailers used in the past 12 months, December 2017
- Voice commerce could be limited by lack of visual representation
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- Figure 11: Attitudes towards online grocery shopping, December 2017
- What we think
Issues and Insights
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- Taking time to talk: finding a place for voice in the online grocery market
- The facts
- The implications
- Food for tonight: can online grocery compete with foodservice takeaway?
- The facts
- The implications
- Online grocery shopping without the retailer: could a direct-to-consumer model work in the grocery sector?
- The facts
- The implications
The Market – What You Need to Know
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- Online grocery market grows by 13.5% in 2017
- A small but significant part of the make-up of the grocery sector
- Store-based players dominate the market
- Online grocery sales peak in December, but take their greatest share in November
- Changing household dynamics could force the industry to switch strategies
Market Drivers
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- Online growth slows down over 2017
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- Figure 12: Annual % change in the retail sales of food, by all food sales and online grocery sales, January 2015-January 2018
- Online takes its greatest share in November…
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- Figure 13: Online grocery stores as a % of all food stores retail sales, January 2015-January 2018
- …but higher average weekly spending is seen in December
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- Figure 14: Average weekly retail sales of all online grocery retailers, January 2015-January 2018
- Prices rise over 2017
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- Figure 15: Annual % change in the price of food and non-alcoholic beverages and alcoholic beverages and tobacco prices, January 2016-January 2018
- Prices rise across all food categories
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- Figure 16: Annual % change in the price of core food categories, January 2017-January 2018
- Smartphones and tablets used to access internet
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- Figure 17: Devices used to access the internet in the last three months, June 2014-September 2017
- Growing 25-34 age group will boost sales…
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- Figure 18: Population projections, by age, 2012-22
- …but smaller household sizes will prove to be a negative influence
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- Figure 19: UK households, by size, 2012-22
Market Size and Forecast
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- Online grocery continues to grow in double digits
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- Figure 20: Total online grocery market size (including VAT), 2012-22
- Figure 21: Total online grocery market size (including VAT), at current and constant prices, 2012-22
- A growing but small sector
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- Figure 22: Online grocery sales as a % of all grocery retail sales, 2012-22
- Store-based players still dominate the market
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- Figure 23: Share of total online grocery market, by type of online grocery operation, 2012-22
- Three players dominate the store-based online grocery market
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- Figure 24: Online grocery sales by store-based grocery retailers (Including VAT), 2012-22
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- Figure 25: Online grocery sales by store-based grocery retailers (including VAT), at current and constant prices, 2012-22
- Ocado the driver for the online-only segment, but smaller players are growing quickly
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- Figure 26: Online grocery sales by online-only retailers (including VAT), 2012-22
- Figure 27: Online grocery sales by online-only retailers (including VAT), at current and constant prices, 2012-22
- Forecast methodology
The Consumer – What You Need to Know
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- Just under half do some online grocery shopping
- Young families a key audience
- Convenience an obvious driver
- Bulky items most popular
- Tesco the most popular retailer
- Satisfaction levels generally high but work could be done on recommendations
- Voice commerce could be limited by lack of visual representation
Online Grocery Use and Delivery Pass Ownership
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- Just under half do some online grocery shopping
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- Figure 28: Online grocery usage, December 2017
- Trends in online grocery use
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- Figure 29: Online grocery usage, 2014-17
- Nearly a quarter have a delivery pass
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- Figure 30: Delivery pass ownership levels, December 2017
Demographics of Online Grocery Use
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- 25-34s most likely to shop online for groceries
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- Figure 31: Online grocery usage, by age, December 2017
- Gender plays a role in use amongst younger shoppers
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- Figure 32: Use and interest in online grocery of non-users, by age and gender, December 2017
- Online peaks amongst those with young families
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- Figure 33: Online grocery usage, by parental status, December 2017
- Price premium means usage peaks amongst more affluent consumers
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- Figure 34: Online grocery usage, by socio-economic group, December 2017
- Online grocery usage peaks in the capital
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- Figure 35: Online grocery usage, by type of location lived in and area lived in, December 2017
How They Shop Online for Groceries
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- Desktop/laptops the most used device for online grocery shopping
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- Figure 36: Devices used to purchase groceries online, December 2017
- Younger consumers more likely to shop via smartphone
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- Figure 37: Devices used to purchase groceries online, by age, December 2017
- 25-34s most likely to use multiple devices
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- Figure 38: Repertoire of devices used to purchase groceries online, by age, December 2017
Why They Shop Online for Groceries
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- Convenience a clear driver for online grocery
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- Figure 39: Why users shop online for groceries, December 2017
- Stocking up on bulky items more common with older online grocery shoppers
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- Figure 40: Leading reasons why users shop online for groceries, by age, December 2017
- Higher socio-economic groups more convenience-focused
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- Figure 41: Reasons why users shop online for groceries, by socio-economic group, December 2017
- Store experience an issue for those who do the majority of their shopping online
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- Figure 42: Reasons why users shop online for groceries, by how much grocery shopping is done online, December 2017
Types of Groceries Purchased Online
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- Bulky goods most popular
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- Figure 43: Types of products typically purchased when shopping online for groceries, December 2017
- 25-44s more likely to buy fresh
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- Figure 44: Types of products typically purchased when shopping online for groceries, by age, December 2017
- 16-24s more likely to buy from a single category
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- Figure 45: Repertoire of products typically purchased when shopping online for groceries, December 2017
Online Grocery Retailers Used
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- Tesco the dominant player online
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- Figure 46: Online grocery retailers used in the past 12 months, December 2017
- Recipe boxes are targeting younger, more affluent consumers
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- Figure 47: Online grocery retailers used in the past 12 months, by age and socio-economic group, December 2017
- Over half used two or more online grocery retailers in the past year
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- Figure 48: Repertoire of online grocery retailers used in the past 12 months, December 2017
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- Figure 49: Online grocery retailers used in the past 12 months, December 2017
- Strong crossover between store and online
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- Figure 50: Retailers shopped with in-store in the last 12 months, December 2017
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- Figure 51: Online grocery retailers used in the past 12 months, December 2017
Satisfaction with the Buying Process Online
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- General high levels of satisfaction from online grocery shoppers
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- Figure 52: Satisfaction with factors relating to online grocery process online, December 2017
- Key Driver Analysis: Recommendations an area to monitor
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- Figure 53: Key drivers of overall satisfaction with online grocery retailers, December 2017
- Figure 54: Overall satisfaction with online grocery retailers – key driver output, December 2017
- Shopping aisles or mission-based categorisation?
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- Figure 55: Attitudes towards online grocery websites, December 2017
- Key Driver Analysis – Methodology
Attitudes towards Voice and Same-day Delivery
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- Voice commerce has potential but first wave of devices don’t lend themselves to grocery ordering
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- Figure 56: Attitudes towards online grocery shopping, December 2017
- Voice commerce has the potential to tap into new areas
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- Figure 57: Agreement with the statement “The ability to order groceries through voice command whilst on the move appeals to me”, by working status, December 2017
- The cost of quick delivery services is off-putting for some
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- Figure 58: Attitudes towards same-day delivery services, December 2017
- Younger consumers more put off by quick delivery charges
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- Figure 59: Agreement with attitudes towards same-day delivery services, by age, December 2017
Leading Retailers – What You Need to Know
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- Tesco the dominant player…
- …but others are growing quickly
- Voice, recipe boxes and foodservice all areas of innovation in 2017
- Amazon scores best on brand metrics
Leading Retailers and Market Shares
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- Market shares: Tesco accounts for a third of the market
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- Figure 60: Leading online grocery retailers’ estimated market shares (excluding VAT), 2017
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- Figure 61: Leading online grocery retailers’ estimated market shares (excluding VAT), 2015-17
- Leading players: revenues
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- Figure 62: Leading online grocery retailers’ net internet revenues, 2015-17
- Leading players: revenue breakdown
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- Figure 63: Leading online grocery retailers’ estimated total online revenues, by grocery and non-grocery, 2015-17
- Smaller players
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- Figure 64: Smaller online players, estimated market shares, 2015-17
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- Figure 65: Smaller online grocery players’ turnover, 2015-17
Competitive Strategies – Key Metrics
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- Coverage and fulfilment
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- Figure 66: Selected leading online grocers’ coverage and fulfilment centres, 2017
- Home delivery metrics
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- Figure 67: Selected leading online grocers’ delivery metrics, March 2018
- Delivery passes
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- Figure 68: Selected leading online grocers’ delivery pass details, March 2018
- Click-and-collect
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- Figure 69: Selected leading online grocers’ click-and-collect details, March 2017
Advertising and Marketing Activity
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- Total sector advertising spend down 26.9% year on year in 2017
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- Figure 70: UK online supermarket/grocer/food total recorded above-the-line, online display and direct mail advertising expenditure, 2013-17
- Leading online supermarket/grocer/food retailers advertising spenders
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- Figure 71: Leading UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, 2013-17
- Door drops attract the biggest percentage of total sector advertising spend
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- Figure 72: UK online supermarket/grocer/food total recorded above-the-line, online display and direct mail advertising expenditure, by media type, 2017
- Nielsen Ad Intel coverage
Innovations and Launch Activity
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- Voice-enabled shopping
- Ocado is the first to join Alexa’s party…
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- Figure 73: Ocado/Amazon Alexa marketing image
- … swiftly followed by Gousto and Morrisons
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- Figure 74: Morrisons/Amazon Alexa marketing image, December 2017
- Tesco launches on Google Home
- New delivery methods
- Ocado trials self-driving grocery truck
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- Figure 75: Oxbotica autonomous van, June 2017
- Grocery delivery service for tourists
- Carrefour lets customers deliver groceries
- Sainsbury’s trials 30-minute click-and-collect
- Bringmeister launches in-home delivery…
- … as does Amazon
- Recipe boxes and foodservice
- Sainsbury’s trials pizza delivery service
- HelloFresh
- … launches in Sainsbury’s stores…
- …opens pop-up store in London…
- …launches Christmas dinner recipes
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- Figure 76: HelloFresh Christmas dinner recipe box, November 2017
- Waitrose launches recipe box subscription
- Same-day gathers pace
- Sainsbury’s expands one-hour delivery
- Convibo becomes Home Run
- Amazon expands its food offering in Europe
- Aldi to begin offering online groceries in the US
- Co-op trials online deliveries with Deliveroo
- Marks & Spencer launches online groceries with one-hour delivery trial…
- …and joins Dropit to allow for home delivery of goods from stores
- Robinsons trials home delivery service
Brand Research
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- What you need to know
- Brand map
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- Figure 77: Attitudes towards and usage of selected brands, September 2017
- Key brand metrics
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- Figure 78: Key metrics for selected brands, September 2017
- Brand attitudes: Online-only retailers perceived as more innovative
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- Figure 79: Attitudes, by brand, September 2017
- Brand personality: The big four supermarkets perceived as the most accessible
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- Figure 80: Brand personality – macro image, September 2017
- Amazon considered trendsetting and cutting edge
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- Figure 81: Brand personality – micro image, September 2017
- Brand analysis
- Amazon innovative and cutting edge
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- Figure 82: User profile of Amazon, September 2017
- Tesco trustworthy and accessible
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- Figure 83: User profile of Tesco, September 2017
- Sainsbury’s reliable, good customer service but perceived as fairly expensive
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- Figure 84: User profile of Sainsbury’s, September 2017
- Morrisons lacks differentiation and uniqueness but value for money
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- Figure 85: User profile of Morrisons, September 2017
- Asda trusty, reliable but lacks vigour
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- Figure 86: User profile of Asda, September 2017
- Waitrose exclusiveness and worth paying more for
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- Figure 87: User profile of Waitrose, September 2017
- Iceland good value, but largely unappealing and disappointing
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- Figure 88: User profile of Iceland, September 2017
- Ocado innovative and stylish, but suffers low brand awareness
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- Figure 89: User profile of Ocado, September 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Financial definitions
- VAT
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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