Table of Contents
Executive Summary
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- The market
- The market continues to experience double-digit growth
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- Figure 1: Online grocery sales (including VAT), 2010-20
- There is a move back to stores at Christmas…
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- Figure 2: Online food stores sales as a % of all food stores retail sales, January 2013-January 2016
- …but December remains the highest value month for online players
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- Figure 3: Average weekly retail sales of all online food retailers, January 2013-December 2015
- Companies, brands and innovations
- Tesco claims more share than its nearest three rivals combined
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- Figure 4: Leading online grocery retailers’ estimated market shares (excluding VAT), 2015
- The consumer
- Almost half have shopped online for groceries in the last year
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- Figure 5: Usage of online grocery shopping, December 2015
- A fifth own a delivery pass
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- Figure 6: Ownership and interest in delivery passes, December 2015
- Tesco captures two fifths of online grocery shoppers
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- Figure 7: Where consumers shop for the majority of their groceries, by in-store and online buying, December 2015
- Just under a third now do more of their shopping online compared to a year ago
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- Figure 8: Changes in online grocery shopping habits, December 2015
- Why they are shopping more…
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- Figure 9: Reasons for shopping online more for groceries, December 2015
- …and why they are shopping less
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- Figure 10: Reasons for shopping less for groceries online, December 2015
- A third would be happy to do a full online shop at Amazon
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- Figure 11: Attitudes towards shopping online for groceries from Amazon, December 2015
- A third still struggle to find a delivery slot that suits
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- Figure 12: Attitudes towards issues surrounding delivery of online grocery orders, December 2015
- What we think
Issues and Insights
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- Can Amazon succeed in the online grocery market?
- The facts
- The implications
- Delivery passes: A way to tap into top-up shopping?
- The facts
- The implications
- Recipe boxes: Making online grocery more convenient?
- The facts
- The implications
The Market – What You Need to Know
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- Online market continues to show double-digit growth
- Store-based players take the biggest share but growth is slowing
- Online-only sales driven by Ocado and new innovative formats
- Online sales strongest during the autumn and winter months
- Mobile device ownership and usage growing
Market Size and Forecast
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- The market continues to grow strongly
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- Figure 13: Online grocery sales (including VAT), 2010-20
- Figure 14: Online grocery sales (including VAT), at current and constant prices, 2010-20
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- Figure 15: Online grocery sales as a % of all grocery retailers’ sector sales, 2010-20
- Segments
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- Figure 16: Share of total online grocery market, 2010-20
- Store-based online grocery segment: Growth slowing
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- Figure 17: Online grocery sales by store-based grocery retailers (Including VAT), 2010-20
- Figure 18: Online grocery sales by store-based grocery retailers (Including VAT), at current and constant prices, 2010-20
- Pureplay grocery segment
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- Figure 19: Online grocery sales by online-only retailers (including VAT), 2010-20
- Figure 20: Online grocery sales by online-only retailers (including VAT), at current and constant prices, 2010-20
- Forecast methodology
Market Drivers
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- Online growing ahead of the total market
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- Figure 21: Annual % change in the retail sales of food, by all food sales and online food sales, January 2013-December 2015
- Online takes peak share during the colder months
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- Figure 22: Online food stores sales as a % of all food stores retail sales, January 2013-January 2016
- Online grocery average weekly sales
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- Figure 23: Average weekly retail sales of all online food retailers, January 2013-December 2015
- Food prices impacting value growth
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- Figure 24: Annual % change in the price of food and non-alcoholic beverages and alcoholic beverages and tobacco prices, January 2012-January 2016
- Near total internet coverage for households with children
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- Figure 25: UK household internet access, by the presence of dependent children, 2013-15
- Devices used to access the internet
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- Figure 26: Devices used to access the internet in the last three months, September 2015
The Consumer – What You Need to Know
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- Almost half have shopped online for groceries in the last year
- A fifth own a delivery pass
- Tesco captures two fifths of online grocery shoppers
- Just under a third now do more of their shopping online compared to a year ago
- A third would be happy to do a full online shop at Amazon
- A third still struggle to find a delivery slot that suits
Who Buys Online
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- Online grocery usage edges up
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- Figure 27: Usage of online grocery shopping, December 2015
- Trend in online grocery shopping
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- Figure 28: Trend in the usage of online grocery shopping, November 2012-December 2015
- Younger consumers far more likely to shop online
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- Figure 29: Usage of online grocery shopping, by age, December 2015
- Online grocery shopping appealing to parents
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- Figure 30: Usage of online grocery shopping, by presence of own children in household, December 2015
Ownership of Delivery Passes
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- Figure 31: Ownership and interest in delivery passes, December 2015
- Ownership tied to usage
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- Figure 32: Ownership and interest in delivery passes, by online grocery shopping usage, December 2015
- Tesco shoppers most likely to have a pass
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- Figure 33: Ownership and interest in delivery passes, by retailers used for the majority of online grocery shopping, December 2015
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Where They Shop
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- Figure 34: Where consumers shop for the majority of their groceries, by in-store and online buying, December 2015
- Online shopper demographics
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- Figure 35: Where consumers shop for the majority of their groceries, by socio-economic group and age, December 2015
- Tesco captures the high users
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- Figure 36: Retailer used for online grocery shopping, by online grocery shopping habits, December 2015
- Where else do they shop online?
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- Figure 37: Other retailers used for online grocery shopping, December 2015
- Some crossover between the major players
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- Figure 38: Where they shop for the majority of groceries online, by where else they shop online for groceries, December 2105
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Changes in Online Grocery Usage
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- Around a third shopping more
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- Figure 39: Changes in online grocery shopping habits, December 2015
- Who is shopping more?
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- Figure 40: Changes in online grocery shopping habits, by age, December 2015
- Why they are shopping more…
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- Figure 41: Reasons for shopping online more for groceries, December 2015
- Why they are shopping online less for groceries…
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- Figure 42: Reasons for shopping less for groceries online, December 2015
- Lack of control turning some away
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- Figure 43: Change in online grocery habits, by users who are shopping less or have stopped shopping online for groceries, December 2015
Satisfaction with Online Grocery Shopping
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- Figure 44: Satisfaction with factors relating to the purchase of groceries online, December 2015
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- Figure 45: Key drivers of overall satisfaction with online grocery retailer, December 2015
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- Figure 46: Overall satisfaction with online grocery retailer – Key driver output, December 2015
- Overall satisfaction with retailers
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- Figure 47: Overall satisfaction when shopping online for groceries, by retailer used for the majority of online grocery shopping, December 2015
- Range, pricing and quality
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- Figure 48: Satisfaction with select factors when shopping online for groceries, by retailer used for the majority of online grocery shopping, December 2015
- Delivery and service
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- Figure 49: Satisfaction with select factors when shopping online for groceries, by retailer used for the majority of online grocery shopping, December 2015
- Website factors
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- Figure 50: Satisfaction with select factors when shopping online for groceries, by retailer used for the majority of online grocery shopping, December 2015
- Methodology
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Attitudes towards Online Grocery Shopping
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- A third would be happy to do a full shop at Amazon
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- Figure 51: Attitudes towards shopping online for groceries from Amazon, December 2015
- Younger consumers most interested in a full online grocery offer
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- Figure 52: Agreement with statements surrounding shopping online for groceries at Amazon, by age, December 2015
- Asda has potential to lose the most from Amazon
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- Figure 53: Agreement with the statement ‘I would be happy to purchase a full weekly shop online from Amazon’, by retailer where the majority of groceries are bought online, December 2015
- Attitudes towards product recommendations
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- Figure 54: Attitudes towards product recommendations by online grocery retailers, December 2015
- Younger consumers more likely to be influenced by recommendations
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- Figure 55: Agreement with statements surrounding product recommendations by online grocery retailers, by age and gender, December 2015
- Delivery
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- Figure 56: Attitudes towards issues surrounding delivery of online grocery orders, December 2015
- Those in urban locations struggling to find a time that suits
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- Figure 57: Agreement with statements surrounding delivery of online grocery, by location lived in, December 2015
Key Players – What You Need to Know
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- Tesco the dominant player
- Wine specialists performing well online
- Delivery fulfilment
- Ocado excels in giving a good experience but struggles with brand awareness
- Innovations: New ways to shop and new players to shop from
Leading Players and Market Shares
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- Tesco the dominant player
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- Figure 58: Leading online grocery retailers’ estimated market shares (excluding VAT), 2015
- Figure 59: Leading online grocer retailers’ estimated market shares (excluding VAT), 2013-15
- Online revenues
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- Figure 60: Leading online grocery retailers’ net internet revenues, 2013-15
- Breakdown of online revenues
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- Figure 61: Leading online grocery retailers’ estimated total online revenues, by grocery and non-grocery, 2013-15
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- Figure 62: Leading online grocery retailers’ online sales as % of their total UK sales, 2013-15
- Smaller players and non-specialists: Market shares
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- Figure 63: Smaller online grocery retailers’ estimated market shares, 2013-15
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- Figure 64: Smaller online grocery retailers’ net revenues, 2013-15
Competitive Strategies – Key Metrics
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- Coverage and fulfilment
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- Figure 65: Selected leading online grocers’ coverage and fulfilment centres, 2016
- Home delivery metrics
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- Figure 66: Selected leading online grocers’ delivery metrics, 2016
- Delivery passes
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- Figure 67: Selected leading online grocers’ delivery pass details, 2016
- Click-and-collect metrics
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- Figure 68: Major grocery retailers offering grocery click-and-collect services, 2016
- Online range
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- Figure 69: Selected leading online grocery retailers, categories as a % of total SKUs, March 2016
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- Figure 70: Total SKU counts of the select leading online grocery players, by category, March 2016
Advertising and Marketing Activity
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- Ocado leads the pack
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- Figure 71: Product category recorded above-the-line, online display and direct mail total advertising expenditure by leading UK online supermarket/grocer/food retailers, 2011-15
- 75.5% of spend channelled through the press and TV
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- Figure 72: Leading UK online supermarket/grocer/food retailers’ product category recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2015
- Nielsen Media Research coverage
Innovation and Launch Activity
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- Grocery shopping app integrated into a refrigerator
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- Figure 73: Samsung Family Hub refrigerator
- Wrist-mounted digital grocery shopping
- Amazon’s online fresh food delivery service
- Google launches fresh grocery delivery service
- Intuitive online grocery shopping experience for Portuguese shoppers
- New food packaging solution for temperature-controlled goods
- Online grocery retailer championing home-grown local food producers
- Online grocery service with emphasis on speed of delivery
- Pick up essentials in-store and have the rest home-delivered
- FoodKick serves up meal solutions for time-starved consumers
Brand Research
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- What you need to know
- Brand map
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- Figure 74: Attitudes towards and usage of selected retail brands, August and December 2015 and January 2016
- Key brand metrics
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- Figure 75: Key metrics for selected retail brands, August and December 2015 and January 2016
- Brand attitudes: Ocado stands out for its innovations whilst Waitrose is worth paying more for
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- Figure 76: Attitudes, by retail brand, August and December 2015 and January 2016
- Brand personality: Amazon fun, Tesco not so much
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- Figure 77: Brand personality – Macro image, August and December 2015 and January 2016
- Tesco’s profit scandal still impacting the brand’s image
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- Figure 78: Brand personality – Micro image, August and December 2015 and January 2016
- Brand analysis
- Amazon: A broad appeal
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- Figure 79: User profile of Amazon, December 2015
- Ocado: Capturing the high earners
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- Figure 80: User profile of Ocado, January 2016
- Asda: Scores high on fun, but most likely to be described as basic
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- Figure 81: User profile of Asda, August 2015
- Sainsbury’s: Expensive but reliable
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- Figure 82: User profile of Sainsbury’s, August 2015
- Tesco: Brand image still suffering from recent affairs
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- Figure 83: User profile of Tesco, August 2015
- Morrisons: Less likely to be recommended than its main rivals
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- Figure 84: User profile of Morrisons, August 2015
- Waitrose: Excelling on experience
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- Figure 85: User profile of Waitrose, August 2015
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Market size and forecast
- Mintel’s market size
- Forecast methodology
- Consumer research methodology
- Key driver analysis methodology
- Interpretation of results
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- Figure 86: Overall satisfaction with online grocery retailer – key driver output, December 2015
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- Figure 87: Satisfaction with online grocery retailer, December 2015
- Financial definitions
- VAT
- Abbreviations
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