Table of Contents
Executive Summary
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- The market
- Growth in the online grocery market slows to just 2.9%
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- Figure 1: All online grocery retail sales, (inc. VAT), 2014-24
- Store-based players account for the majority of the market
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- Figure 2: Split of all online grocery retail sales, by type of retailer, 2014-24
- Online accounts for just 7% of the wider grocery sector
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- Figure 3: Online share of all grocery retail sales (inc. VAT), 2014-24
- Online grocery takes its greatest share in the winter months, but sales peak in December
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- Figure 4: Store-based online grocery retail sales, average weekly sales, Jan 2018-Jan 2020
- Companies and brands
- Tesco is the market leader
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- Figure 5: Leading online grocery retailers’ estimated market shares (excluding VAT), 2019
- Tesco recognised as a grocer which provides a great online service
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- Figure 6: Key metrics for selected brands, October 2019
- Leading players invest significantly in advertising in 2019
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- Figure 7: UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, 2015-19
- The consumer
- Half of consumers do some online grocery shopping
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- Figure 8: Online grocery usage, December 2019
- Younger parents the key online grocery users
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- Figure 9: Online grocery usage, by parental status and age of children, December 2019
- Significant growth in smartphone shopping
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- Figure 10: Devices used to shop online for groceries, 2018 and 2019
- Ambient products continue to overindex online
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- Figure 11: Types of products purchased through online grocery services, December 2019
- Online key to new brand discovery
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- Figure 12: Attitudes towards shopping for groceries online, December 2019
- What we think
Issues and Insights
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- The impact (and legacy) of COVID-19 on the online grocery sector
- The facts
- The implications
- D2C: Death by 1,000 cuts?
- The facts
- The implications
The Market – What You Need to Know
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- Growth in the online grocery market slows to just 2.9%
- Store-based players account for the majority of the market
- Online accounts for just 7% of the wider grocery sector
- Online grocery takes its greatest share in the winter months, but sales peak in December
Market Drivers
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- Online growth comes into line with the wider market
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- Figure 13: Annual % change in all grocery retail sales and store-based online grocery retail sales, Jan 2018-Jan 2020
- The outperformance of online-only players is not confined to the grocery sector
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- Figure 14: Share of all retail sales, by type of retail operation, 2015-19
- Online grocery takes its greatest share in the winter months…
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- Figure 15: Share of all grocery retail sales accounted for by store-based online grocery retail sales, Jan 2018-Jan 2020
- …but average weekly sales hit the peak in December
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- Figure 16: Store-based online grocery retail sales, average weekly sales, Jan 2018-Jan 2020
- Food prices edge up in 2019
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- Figure 17: Inflation, year-on-year change in food and non-alcoholic beverage and alcoholic beverages and tobacco prices, Jan 2018-Jan 2020
- Mobile devices moving to be the dominant device for online shopping
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- Figure 18: Other digital activity in the last three months, April 2017 and September 2019
- Growth in older consumers and smaller households presents challenges and opportunities for retailers
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- Figure 19: Population size and age structure, 2014-24
Market Size and Forecast
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- Market growth slows to just 2.9% in 2019
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- Figure 20: All online grocery retail sales, (inc. VAT), 2014-24
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- Figure 21: Total online grocery retail sales (including VAT), 2014-24
- Online continues to grow its share of all retail sales
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- Figure 22: Online share of all grocery retail sales (inc. VAT), 2014-24
- Online-only players gaining influence in the market
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- Figure 23: Split of all online grocery retail sales, by type of retailer, 2014-24
- Store-based sales decline in 2019
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- Figure 24: Online grocery sales by store-based grocery retailers (inc. VAT), 2014-24
- Figure 25: Online grocery sales by store-based grocery retailers (including VAT), at current and constant prices, 2014-24
- Online-only players slowing but outperforming store-based retailers
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- Figure 26: Online grocery sales by online-only retailers (including VAT), 2014-24
- Figure 27: Online grocery sales by online-only retailers (including VAT), at current and constant prices, 2014-24
- Forecast methodology
The Consumer – What You Need to Know
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- Half of consumers do some online grocery shopping
- Younger parents the key online grocery users
- Significant growth in smartphone shopping
- Ambient products continue to overindex online
- Online key to new brand discovery
Online Grocery Usage
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- Half of consumers do some online grocery shopping
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- Figure 28: Online grocery usage, December 2019
- Growth in the number doing most of their shopping online
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- Figure 29: Online grocery usage, December 2017-19
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- Figure 30: Changes in online grocery use, December 2019
Demographics of Online Grocery Shoppers
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- Key demographics summary
- 25-34s most likely to shop online for groceries
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- Figure 31: Online grocery usage, by age, December 2019
- Usage peaks among those with young children
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- Figure 32: Online grocery usage, by parental status and age of children, December 2019
- Those in full-time work more likely to shop for groceries online
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- Figure 33: Online grocery usage, by working status, December 2019
- Online use still peaks among higher earners
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- Figure 34: Online grocery usage, by household income, December 2019
- Cities a hotbed of online grocery use
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- Figure 35: Online grocery usage, by location, December 2019
Retailers Shopped With
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- Tesco the dominant player online
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- Figure 36: Retailers used to shop for groceries online, December 2019
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- Figure 37: Repertoire of retailers used to shop online for groceries, by retailers shopped with, December 2019
- Partnership with Amazon proving fruitful in attracting younger shoppers for Morrisons
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- Figure 38: Retailers used to shop for groceries online, by age and socio-economic group, December 2019
- Tesco winning the battle for parents, but there is significant use of food-box services among this group
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- Figure 39: Retailers used to shop for groceries online, by parental status and age of children, December 2019
Delivery Pass Ownership
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- Over a quarter have a delivery pass
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- Figure 40: Delivery pass ownership, December 2019
- Ocado converting more of its shoppers to delivery pass owners
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- Figure 41: Delivery pass ownership, July 2019
Devices Used to Shop Online for Groceries
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- Significant growth in the number shopping via smartphone
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- Figure 42: Devices used to shop online for groceries, 2018 and 2019
- Younger online grocery shoppers more likely to shop via mobile than PC/laptop
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- Figure 43: Devices used to shop online for groceries, by age, December 2019
- Over half shop on mobile via apps
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- Figure 44: Method used to shop via mobile device, December 2019
What They Buy Online
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- Ambient products continue to overindex online
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- Figure 45: Types of products purchased through online grocery services, December 2019
- Most online grocery shoppers are full-basket shoppers
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- Figure 46: Repertoire of types of products purchased through online grocery services, December 2019
Factors Impacting Online Grocery Usage
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- Convenience still the major driver for online grocery
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- Figure 47: Reasons why more grocery shopping has been done online, December 2019
- Discounters still drawing customers away from online
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- Figure 48: Reasons why less grocery shopping has been done online, December 2019
Attitudes towards Shopping Online for Groceries
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- Discovery of new brands a key part of the online grocery experience
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- Figure 49: Behaviours of online grocery shoppers, December 2019
- There are concerns around the environmental impact of shopping online
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- Figure 50: Behaviours of online grocery shoppers, December 2019
- Foodservice courier firms could provide the solution to tap into top-ups
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- Figure 51: Behaviours of online grocery shoppers, December 2019
Leading Retailers – What You Need to Know
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- Tesco is the market leader
- Ocado grows strongly despite warehouse fire
- Tesco recognised as a grocer which provides a great online service
- Leading players invest significantly in advertising in 2019
Leading Retailers and Market Share
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- Tesco the market leader
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- Figure 52: Leading online grocery retailers’ estimated market shares (excluding VAT), 2019
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- Figure 53: Leading online grocery retailers’ estimated market shares (excluding VAT), 2017-19
- Leading players: revenues
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- Figure 54: Leading retailers’ net online grocery revenues, 2017-19
- Leading players: revenue breakdown
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- Figure 55: Leading online grocery retailers’ estimated total online revenues, by grocery and non-grocery, 2017-19
- Smaller players: revenues
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- Figure 56: Smaller online grocery players’ turnover, 2017-19
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- Figure 57: Smaller online grocery players’ turnover, 2017-19
Brand Research
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- What you need to know
- Brand map
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- Figure 58: Attitudes towards and usage of selected brands, October 2019
- Key brand metrics
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- Figure 59: Key metrics for selected brands, October 2019
- Brand attitudes: Waitrose seen as a brand that is worth paying more for
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- Figure 60: Attitudes, by brand, October 2019
- Brand personality: The big four have accessibility on their side
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- Figure 61: Brand personality – macro image, October 2019
- Tesco size boosts it sense of reliability
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- Figure 62: Brand personality – micro image, October 2019
- Brand analysis
- Amazon’s brand excels on most metrics
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- Figure 63: User profile of Amazon, October 2019
- Tesco: A highly ubiquitous but trust brand
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- Figure 64: User profile of Tesco, October 2019
- Sainsbury’s: still carries a higher price perception compared to nearest rivals
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- Figure 65: User profile of Sainsbury’s, October 2019
- Asda: strong price credentials, but this leads to some negative connotations
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- Figure 66: User profile of Asda, October 2019
- Morrisons: online credentials still in doubt from non-users
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- Figure 67: User profile of Morrisons, October 2019
- Waitrose: a premium brand image
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- Figure 68: User profile of Waitrose, October 2019
- Ocado: lower usage, but high service levels
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- Figure 69: User profile of Ocado, October 2019
- Iceland: reliable but also most likely to be seen as basic
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- Figure 70: User profile of Iceland, October 2019
Launch Activity and Innovation
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- Faster and more convenient grocery shopping services
- Targeting office lunchtime delivery market
- Click-and-collect robotic grocery parcel system that saves time queuing in stores
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- Figure 71: Cleveron 501 Grocery pick-up
- ‘Grab and go’ digital grocery shop
- Grocery voice ordering service
- 'Referrals' discount for online grocery purchases
- Last-mile delivery solutions
- AI-driven online grocery solution
Advertising and Marketing Activity
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- Total sector advertising spend up 61.9% year-on-year in 2019
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- Figure 72: UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, 2015-19
- Ocado remains the sector’s highest advertising spender
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- Figure 73: Leading UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, 2015-19
- Door drops account for the biggest percentage share of advertising spend
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- Figure 74: UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, by media type, 2015-19
- Leading advertisers prefer door drops over other media types
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- Figure 75: Leading UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, by media type, 2019
- Nielsen Ad Intel coverage
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Financial definitions
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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