Table of Contents
Overview
-
- What you need to know
- Products covered in this Report
Executive Summary
-
- The market
- Online growth slows in the second half of 2018….
-
- Figure 1: Annual % change in the retail sales of food, by all food sales and online grocery sales, January 2017-January 2019
- …meaning the market recorded its third successive year of slowing growth
-
- Figure 2: Total online grocery market size (including VAT), 2013-23
- Online grocery sales claim their greatest share of sales in November
-
- Figure 3: Online grocery sales as a % of all food stores retail sales, January 2016-January 2019
- UK facing an ageing population and declining household, throwing up challenges for the sector
-
- Figure 4: Population projections, by age, 2013-23
- Companies and brands
- Tesco the dominant player
-
- Figure 5: Leading online grocery retailers’ estimated market shares (excluding VAT), 2018
- From same-day to in-home delivery, the online grocery sector continues to be a hotbed of innovation
-
- Figure 6: Waitrose While You’re Away, October 2018
- Of the grocers the Tesco brand is in good shape, but Amazon’s brand trumps all
-
- Figure 7: Attitudes towards and usage of selected brands, September 2018
- The consumer
- Just under half do some online grocery shopping
-
- Figure 8: Use of online grocery services, December 2018
- Overall PC/laptops still the devices of choice for compiling orders
-
- Figure 9: Devices used to shop online for groceries, December 2018
- Nearly two thirds of users experienced an issue with an order in the past year…
-
- Figure 10: Issues experienced with online grocery orders in the past year, December 2018
- …with the most popular way to resolve an issue being to get on the phone
-
- Figure 11: How customers resolved issues experienced with online grocery orders, December 2018
- Tesco by far the most popular online grocery retailer
-
- Figure 12: Retailers used to shop online for groceries in the past year, December 2018
- A quarter would not be willing to pay for same-day delivery
-
- Figure 13: Amount online grocery shoppers would be willing to pay for same-day delivery, December 2018
- Much interest in a ‘unified’ app-based shopping experience
-
- Figure 14: Attitudes towards shopping online for groceries, December 2018
- Hesitancy towards buying fresh online still the biggest turn-off
-
- Figure 15: Why they stopped shopping/have never shopped online for groceries, December 2018
- What we think
Issues and Insights
-
- Same-day, tops-ups, sandwiches: What is the next driver of growth for the market?
- The facts
- The implications
- Fire, break-up and new love: Ocado’s eventful start to 2019
- The facts
- The implications
The Market – What You Need to Know
-
- Online growth slows in the second half of 2018…
- …meaning the market recorded its third successive year of slowing growth
- Online grocery sales claim their greatest share of sales in November
- UK facing an ageing population and declining household, throwing up challenges for the sector
Market Drivers
-
- Rate of online grocery sales growth slower in 2018
-
- Figure 16: Annual % change in the retail sales of food, by all food sales and online grocery sales, January 2017-January 2019
- Online grocery store sales as a percentage of all food stores retail sales in 2018 same as 2017
-
- Figure 17: Online grocery sales as a % of all food stores retail sales, January 2016-January 2019
- Average weekly retail sales highest in December
-
- Figure 18: Average weekly retail sales of all online grocery retailers, January 2016-January 2019
- Food prices down year on year in 2018
-
- Figure 19: Annual % change in the price of food and non-alcoholic beverages and alcoholic beverages and tobacco prices, January 2017-January 2019
- End-of-year increase in some food prices
-
- Figure 20: Annual % change in the price of core food categories, January 2018-January 2019
- Broadband internet connection near universal
-
- Figure 21: Devices used to access the internet in the last three months, 2016 and 2018
- Core online grocery user demographic forecast to decline
-
- Figure 22: Population projections, by age, 2013-23
- Households downsizing could shrink size and value of online basket orders
-
- Figure 23: UK households, by size, 2013-23
Market Size and Forecast
-
- Growth slows for the third consecutive year
-
- Figure 24: Total online grocery market size (including VAT), 2013-23
-
- Figure 25: Total online grocery market size (including VAT), at current and constant prices, 2013-23
- A small channel, but one that is gaining share
-
- Figure 26: Online grocery sales as a % of all grocery retail sales, 2013-23
- Store-based players dominate the market…
-
- Figure 27: Share of total online grocery market, by type of online grocery operation, 2013-18
- …but store-based sales are slowing
-
- Figure 28: Online grocery sales by store-based grocery retailers (including VAT), 2013-23
- Figure 29: Online grocery sales by store-based grocery retailers (including VAT), at current and constant prices, 2013-23
- Ocado continues to be the driver for the pureplay market
-
- Figure 30: Online grocery sales by online-only retailers (including VAT), 2013-23
- Figure 31: Online grocery sales by online-only retailers (including VAT), at current and constant prices, 2013-23
- Forecast methodology
The Consumer – What You Need to Know
-
- Just under half do some online grocery shopping
- Those aged 25-34 are key users
- Overall laptop/desktops still the devices of choice for compiling orders
- Nearly two thirds of users experienced an issue with an order in the past year
- Tesco by far the most popular online grocery retailer
- A quarter would not be willing to pay for same-day delivery
- Much interest in a ‘unified’ app-based shopping experience
- Hesitancy towards buying fresh online still the biggest turn-off
Online Grocery Use and Delivery Pass Ownership
-
- Just under half are online grocery shoppers…
-
- Figure 32: Use of online grocery services, December 2018
- …although less than one in 10 do all of their grocery shopping online
-
- Figure 33: Online grocery usage, 2015-18
- A quarter (24%) have a delivery pass
-
- Figure 34: Ownership of online grocery passes, December 2018
Demographics of Online Grocery Shoppers
-
- Those aged 25-34 most likely to shop online
-
- Figure 35: Online grocery use, by age, December 2018
- Usage peaks among younger consumers of both sexes
-
- Figure 36: Use and interest in online grocery of non-users, by age and gender, December 2018
- Those with children in the household more likely to shop online for groceries
-
- Figure 37: Online grocery usage, by parental status, December 2018
- Convenience comes at a price
-
- Figure 38: Online grocery usage, by socio-economic group, December 2018
- Online grocery usage peaks in urban areas
-
- Figure 39: Online grocery usage, by type of location lived in and area lived in, December 2018
Devices Used to Shop Online for Groceries
-
- Most use a laptop/desktop to complete online grocery orders
-
- Figure 40: Devices used to shop online for groceries, December 2018
- Younger online grocery shoppers more likely to shop via mobile
-
- Figure 41: Devices used to shop online for groceries, by age, December 2018
- Device users more likely to use the mobile site
-
- Figure 42: How smartphone/tablet users shop for groceries online, by age, December 2018
Issues Experienced with Online Grocery Orders
-
- Nearly two thirds (63%) have experienced an issue with an online grocery order
-
- Figure 43: Issues experienced with online grocery orders in the past year, December 2018
- Just under a quarter (22%) have experienced more than three problems
-
- Figure 44: Repertoire of issues experienced in the past 12 months when ordering groceries online, December 2018
- Frequent users experience more issues
-
- Figure 45: Issues experienced with online grocery orders in the past year, by level of online grocery usage, December 2018
- Most call to resolve issues
-
- Figure 46: How customers resolved issues experienced with online grocery orders, December 2018
- Younger consumers more likely to complain via modern means
-
- Figure 47: How customers resolved issues experienced with online grocery orders, by age, December 2018
Retailers Shopped With
-
- Tesco the most popular retailer to shop with online
-
- Figure 48: Retailers used to shop online for groceries in the past year, December 2018
- Asda appealing to the younger and less affluent
-
- Figure 49: Online grocery retailers used in the past 12 months, by age and socio-economic group, December 2018
- Most shopped with at least two retailers online in the past year
-
- Figure 50: Repertoire of online grocery retailers shopped with in the past 12 months, December 2018
- Tesco also the most popular grocery retailer overall
-
- Figure 51: Retailers used to shop in-store for groceries in the past 12 months, December 2018
-
- Figure 52: Retailers used to shop in-store for groceries in the past 12 months, by where online grocery shoppers shop for groceries online, December 2018
Same-Day Delivery
-
- The market edges towards same-day delivery
-
- Figure 53: Select metrics of same-day delivery services within the UK, February 2019
- Most would only be willing to pay £1-£4.99 for same-day delivery
-
- Figure 54: Amount online grocery shoppers would be willing to pay for same-day delivery, December 2018
- Younger customers far more willing to pay for same-day delivery
-
- Figure 55: Amount online grocery shoppers would be willing to pay for same-day delivery, by age, December 2018
-
- Figure 56: Amount online grocery shoppers would be willing to pay for same-day delivery, by parental status, December 2018
- Most plan, but most also think getting fresh as quickly as possible is important
-
- Figure 57: Attitudes towards planning and delivery of fresh products, December 2018
Attitudes towards Mobile Apps and Voice
-
- Demand is there for a one-stop app
-
- Figure 58: Attitudes towards online grocery shopping, December 2018
- Younger consumers far more in favour of app integration
-
- Figure 59: Agreement with attitudes towards online grocery shopping, by age, December 2018
- More interest around using voice for assistance than for ordering
-
- Figure 60: Attitudes towards voice and online grocery, December 2018
Why They Don’t Shop Online for Groceries
-
- Fresh still the main concern from those who don’t shop online for groceries
-
- Figure 61: Why they stopped shopping/have never shopped online for groceries, December 2018
- Younger consumers less put off by ordering fresh online
-
- Figure 62: Why they stopped shopping/have never shopped online for groceries, by age, December 2018
- Fresh is a key concern for those who have never shopped online for groceries
-
- Figure 63: Reasons for not shopping online for groceries, by previous experience of or interest in using online groceries services, December 2018
Leading Retailers – What You Need to Know
-
- Tesco the dominant player
- From same-day to in-home delivery, the online grocery sector continues to be a hotbed of innovation
- Ocado the biggest spender in 2018
- Of the grocers the Tesco brand is in good shape, but Amazon’s brand trumps all
Leading Retailers and Market Share
-
- Market shares: Tesco still dominant, but has lost share
-
- Figure 64: Leading online grocery retailers’ estimated market shares (excluding VAT), 2018
-
- Figure 65: Leading online grocery retailers’ estimated market shares (excluding VAT), 2016-18
- Leading players: revenues
-
- Figure 66: Leading retailers’ net online grocery revenues, 2016-18
- Leading players: revenue breakdown
-
- Figure 67: Leading online grocery retailers’ estimated total online revenues, by grocery and non-grocery, 2016-18
- Smaller players
-
- Figure 68: Smaller players, estimated market shares, 2016-18
-
- Figure 69: Smaller online grocery players’ turnover, 2016-18
Competitive Strategies – Key Metrics
-
- Coverage and fulfilment
-
- Figure 70: Selected leading online grocers’ coverage and fulfilment centres, 2018
- Home delivery metrics
-
- Figure 71: Selected leading online grocers’ delivery metrics, March 2019
- Delivery passes
-
- Figure 72: Selected leading online grocers’ delivery pass details, March 2019
- Click-and-collect
-
- Figure 73: Selected leading online grocers’ click-and-collect details, March 2019
Advertising and Marketing Activity
-
- Total sector advertising spend up 11.7% year on year in 2018
-
- Figure 74: UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, 2014-18
- Ocado is the sector’s highest advertising spender
-
- Figure 75: Leading UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, 2014-18
- Majority of advertising spend channelled through door drops
-
- Figure 76: UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, by media type, 2014-18
- Only half of the leading advertisers favour door drops
-
- Figure 77: UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, by media type, 2018
- Nielsen Ad Intel coverage
Launch Activity and Innovation
-
- I want it now: grocers across Europe embrace same-day delivery
-
- Figure 78: Supermercato24, March 2019
- Figure 79: Buymie Ireland and Lidl, March 2019
- Alexa, clean up in aisle four: retailers increasingly embrace voice commerce
- Mini-supermarkets on wheels
-
- Figure 80: Stop & Shop driverless vehicle, January 2019
- Unattended in-home grocery delivery services
-
- Figure 81: Waitrose While You’re Away, October 2018
- Expanded pick-up points
- Amazon France launches La boutique des Producteurs
- Developing foodservice offering
- Bol.com takes another leap into grocery deliveries
Brand Research
-
- What you need to know
- Brand map
-
- Figure 82: Attitudes towards and usage of selected brands, September 2018
- Key brand metrics
-
- Figure 83: Key metrics for selected brands, September 2018
- Brand attitudes: Amazon provides the best online service
-
- Figure 84: Attitudes, by brand, September 2018
- Brand personality: Store-based retailers generally perceived as the most accessible
-
- Figure 85: Brand personality – macro image, September 2018
- Tesco seen as reliable
-
- Figure 86: Brand personality – micro image, September 2018
- Brand analysis
- Amazon innovative, trusted and highly recommended by those who use it
-
- Figure 87: User profile of Amazon, September 2018
- Tesco reliable and accessible
-
- Figure 88: User profile of Tesco, September 2018
- Sainsbury’s trustworthy and ethical, but lacks cutting edge
-
- Figure 89: User profile of Sainsbury’s, September 2018
- Asda offers good value
-
- Figure 90: User profile of Asda, September 2018
- Morrisons lacks innovativeness and authoritativeness
-
- Figure 91: User profile of Morrisons, September 2018
- Iceland basic, but offers good value for money
-
- Figure 92: User profile of Iceland, September 2018
- Waitrose expensive and exclusive
-
- Figure 93: User profile of Waitrose, September 2018
- Ocado lowest brand awareness, lowest lifetime usage and lowest brand recommendation
-
- Figure 94: User profile of Ocado, September 2018
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Data sources
- Financial definitions
- VAT
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
-
- Forecast methodology
Back to top