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Online Grocery Retailing - UK - March 2013

INTRODUCTION
Definition
Financial definitions
VAT
Sales per store, sales per sq m
Other
Abbreviations
EXECUTIVE SUMMARY
Sector size and forecast
Figure 1: Online grocery retail sales and forecast (incl. VAT), 2007-17
Market factors
Companies, brands and innovation
Market shares
Figure 2: Leading online grocers’ shares of online grocery sales, 2011 and 2012
Proportion of total sales
Figure 3: Leading multichannel grocers’ estimated percentage of total sales generated online, 2008-12
Online category allocation
Figure 4: Breakdown of online product offer, by category, leading grocers, January 2013
The consumer
Usage of online grocery
Figure 5: The consumer: Usage of online grocery shopping, November 2012
Where they shop
Figure 6: The consumer: Retailers used for most grocery shopping, online and online/in-store total, November 2012
Reasons for not shopping online
Figure 7: The consumer: Reasons for not shopping for groceries online, November 2012
Mobile, tablet and smart TV shopping
Figure 8: The consumer: New-tech shopping activities done or would consider doing, November 2012
Figure 9: The consumer: New-tech shopping activities done or would consider doing, smartphone and tablet apps, November 2012
Online services used or considered
Figure 10: The consumer: Online shopping services used or would consider using, online grocery shoppers, November 2012
Figure 11: The consumer: Online shopping services would consider using, non-online grocery shoppers, November 2012
What we think
ISSUES IN THE MARKET
How big is m-commerce in grocery?
What is the role of stores in an online future?
Should Morrisons buy Ocado?
What services do shoppers want?
Can online retailing be truly sustainable?
TREND APPLICATIONS
Inspire trend: Life Hacking
Inspire trend: Collective Intelligence
Mintel Futures: Human
BROADER MARKET ENVIRONMENT
Key points
Economic context
Figure 12: UK: Consumer confidence levels, February 2012-January 2013
Figure 13: Retail prices index and average weekly earnings: Annual % change, July 2009-December 2012
Figure 14: UK: Consumer prices index: Annual % change, January 2012-January 2013
Demographic trends
Figure 15: England: One-person households as percentage of all households (projected from 2008 data), 2008-28
Figure 16: Great Britain: Mid-year population projections, proportion of over-65s, 2012-21
CONSUMER SPENDING ON KEY CATEGORIES
Key points
Food and drink
Figure 17: UK: Breakdown of spending on food, beverages and tobacco, 2012
Figure 18: UK: Consumer spending on in-home food, beverages and tobacco (inc VAT), 2008-12
Non-food FMCGs
Figure 19: UK: Consumer spending on personal care, household and over-the-counter pharmaceutical products (inc VAT), 2008-12
Total potential market
Figure 20: UK: Estimated online grocery retail sales as proportion of spending on in-home food, beverages, tobacco and FMCGs, 2008-12
SECTOR SIZE AND FORECAST
Key points
The sector forecast
M-commerce
Figure 21: Online grocery retail sales and forecast (incl. VAT), 2007-17
Figure 22: Online grocery retail sales and forecast (incl. VAT), at current and constant prices, 2007-17
Proportion of all grocery sales
Figure 23: Online grocery sales as percentage of all grocers’ sector sales, 2007-17
The Mintel forecast
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
THE CONSUMER: WHO SHOPS ONLINE
Key points
What we asked
Usage of online shopping
Figure 24: The consumer: Usage of online grocery shopping, November 2012
Figure 25: The consumer: Proportion doing all or most of their grocery shopping online or having never shopped for groceries online, 2011-13
Figure 26: The consumer: Usage of online grocery shopping, average age/socio-economic group, November 2012
Figure 27: The consumer: Usage/non-usage of online grocery shopping, by presence of children in household, November 2012
Figure 28: The consumer: Participation in online grocery shopping, by retailers used for main grocery shop, selected retailers, November 2012
THE CONSUMER: WHERE THEY SHOP
Key points
What we asked
Where they shop
Figure 29: The consumer: Retailers used for most grocery shopping, online and online/in-store total, November 2012
By age and affluence
Figure 30: The consumer: Main retailers used for online grocery shopping, average age and socio-economic group, November 2012
By main grocery retailer used
Figure 31: The consumer: Usage of online grocery shopping, by retailer used for most grocery shopping whether online or in-store, November 2012
By main grocery retailer used online
Figure 32: The consumer: Usage of online grocery shopping, by retailer used for most grocery shopping online, November 2012
THE CONSUMER: REASONS FOR NOT SHOPPING ONLINE
Key points
What we asked
Why they don’t shop for groceries online
Figure 33: The consumer: Reasons for not shopping for groceries online, November 2012
By age and affluence
Figure 34: The consumer: Reasons for not shopping for groceries online, average age and affluence, November 2012
By interest in online shopping
Figure 35: The consumer: Reasons for not shopping for groceries online, by usage/interest in usage of online shopping, November 2012
By grocery retailer used
Figure 36: The consumer: Reasons for not shopping for groceries online, by retailer used for most grocery shopping in-store, November 2012
THE CONSUMER: MOBILE, TABLET AND SMART TV SHOPPING
Key points
What we asked
Activities online shoppers use or would consider
Figure 37: The consumer: New-tech shopping activities done or would consider doing, November 2012
Figure 38: The consumer: New-tech shopping activities done or would consider doing, smartphone and tablet apps, November 2012
Demographics: ‘Have done’
Figure 39: The consumer: New-tech shopping activities done, average age/socio-economic group, November 2012
Demographics: ‘Would consider’
Figure 40: The consumer: New-tech shopping activities would consider doing, average age/socio-economic group, November 2012
M-commerce and t-commerce activities, by frequency of online shop
Figure 41: The consumer: M-commerce and t-commerce activities done, by frequency of online grocery shopping, November 2012
THE CONSUMER: ONLINE SERVICES USED OR CONSIDERED
Key points
What we asked
The appeal of services to online and offline shoppers
Figure 42: The consumer: Online shopping services used or would consider using, online grocery shoppers, November 2012
Figure 43: The consumer: Online shopping services would consider using, non-online grocery shoppers, November 2012
Usage of services by frequency of shop
Figure 44: The consumer: Online shopping services used, by usage of online shopping, November 2012
Demographics: online shoppers
Figure 45: The consumer: Online shopping services used, average age and socio-economic group, November 2012
Figure 46: The consumer: Online shopping services would consider using, average age and socio-economic group, November 2012
THE CONSUMER: PROFILING ONLINE SHOPPERS
Key points
Charting consumer breakdowns
Demographic composition
Figure 47: The consumer: Breakdown, by gender, November 2012
Figure 48: The consumer: Breakdown, by age, November 2012
Figure 49: The consumer: Breakdown, by socio-economic group, November 2012
Figure 50: The consumer: Breakdown, by urban/rural, November 2012
WHO’S INNOVATING?
Key points
Morrisons ventures into the online market
Flexible delivery and pick-up options for busy on-the-go consumers
More ‘Dark Stores’ see the light
Independent operators tap into trend for specialist produce
Department stores target market for high end groceries and foodie gifts
LEADING RETAILERS AND MARKET SHARES
Key points
Market shares in brief
Figure 51: Leading online grocers’ shares of online grocery sales, 2011 and 2012
Leading retailers
Figure 52: Leading online grocers’ estimated revenues (excl. VAT), 2008-12
Figure 53: Leading multichannel grocers’ estimated percentage of total sales generated online, 2008-12
Market shares in detail
Figure 54: Leading online grocers’ shares of online grocery sales, 2008-12
Average orders
Figure 55: Average online order value, Ocado and J. Sainsbury, 2011/12
Mobile capability
Other food and drink retailers
Figure 56: Major home shopping food specialists, total turnover (excl. VAT, incl. non-online sales), 2008-11
End-to-end fulfilment
Distribution developments
Figure 57: Leading online grocers’ store/fulfilment centre numbers, March 2013
Collection innovations
COMPANY PROFILES
Retailers’ propositions
Figure 58: Leading online food retailers’ comparison data, 2013
Profiling retailers’ shoppers
Figure 59: Leading grocers: Index of participation in online shopping, by gender relative to overall index of participation in online shopping, November 2012
Figure 60: Leading grocers: Index of participation in online shopping, by age relative to overall index of participation in online shopping, November 2012
Figure 61: Leading grocers: Index of participation in online shopping, by socio-economic group relative to overall index of participation in online shopping, November 2012
Amazon.com Inc
Asda
Figure 62: Asda’s online grocery product mix, based on count of available product lines on website, January 2013
Ocado
Figure 63: Ocado’s online grocery product mix, based on count of available product lines on website, January 2013
J. Sainsbury
Tesco
Figure 64: Tesco’s online grocery product mix, based on count of available product lines on website, January 2013
Waitrose
Figure 65: Waitrose’s online grocery product mix, based on count of available product lines on the website, January 2013
BRAND COMMUNICATION AND PROMOTION
Key points
Adspend back on the rise in 2012
Figure 66: Total main media adspend in the UK online grocery retailing sector, 2009-12
Tesco dominates advertising landscape
Figure 67: Leading advertisers in the UK online grocery retailing sector, 2009-12
Figure 68: Share of main media adspend in the UK online grocery retailing sector, by company, 2012
Internet increasingly popular as advertising channel
Figure 69: Adspend in the UK online grocery retailing sector, by media type, 2011 and 2012
APPENDIX – THE CONSUMER: WHO SHOPS ONLINE
Figure 70: Usage of online shopping, November 2012
Figure 71: Most popular usage of online shopping, by demographics, November 2012
Figure 72: Next most popular usage of online shopping, by demographics, November 2012
APPENDIX – THE CONSUMER: WHERE THEY SHOP
Figure 73: Retailers used for grocery shopping, November 2012
Figure 74: Usage of online shopping, by retailers used for grocery shopping, in-store and online, November 2012
Figure 75: Usage of online shopping, by retailers used for grocery shopping, in-store, November 2012
Figure 76: Usage of online shopping, by retailers used for grocery shopping, online, November 2012
Figure 77: Any retailers used for grocery shopping, by demographics, November 2012
Figure 78: In-store retailers used for grocery shopping, by demographics, November 2012
Figure 79: Retailers used for grocery shopping, by demographics, November 2012
APPENDIX – THE CONSUMER: REASONS FOR NOT SHOPPING ONLINE
Figure 80: Reasons for not shopping for groceries online, November 2012
Figure 81: Usage of online shopping, by most popular reasons for not shopping for groceries online, November 2012
Figure 82: Usage of online shopping, by next most popular reasons for not shopping for groceries online, November 2012
Figure 83: Retailers used for grocery shopping, by most popular reasons for not shopping for groceries online, November 2012
Figure 84: Retailers used for grocery shopping, by next most popular reasons for not shopping for groceries online, November 2012
Figure 85: Retailers used for grocery shopping, by most popular reasons for not shopping for groceries online, November 2012
Figure 86: Retailers used for grocery shopping, by next most popular reasons for not shopping for groceries online, November 2012
Figure 87: Most popular reasons for not shopping for groceries online, by demographics, November 2012
Figure 88: Next most popular reasons for not shopping for groceries online, by demographics, November 2012
APPENDIX – THE CONSUMER: MOBILE, TABLET AND SMART TV SHOPPING
Figure 89: Online shopping methods used or would consider using, November 2012
Figure 90: Usage of online shopping, by online shopping methods to download a grocery shopping app on a smartphone and download a grocery shopping app on a tablet computer, November 2012
Figure 91: Usage of online shopping, by online shopping methods used to add items to my online basket using a web browser on a smartphone and used to add items to my online basket using a web browser on a tablet, November 2012
Figure 92: Usage of online shopping, by online shopping methods to complete an online grocery purchase using a web browser on a smartphone and online shopping methods to complete an online grocery purchase using a web browser on a tablet, November 2012
Figure 93: Usage of online shopping, by online shopping to add items to my online basket by scanning items on a ‘shopping wall’ (picturing goods available to purchase with barcodes) using a smartphone and online shopping to shop for groceries online through an internet-enabled television, November 2012
Figure 94: Online shopping methods used to download a grocery shopping app on a smartphone and online shopping methods used to download a grocery shopping app on a tablet computer, by demographics, November 2012
Figure 95: Online shopping methods used to add items to my online basket using a web browser on a smartphone and using a web browser on a tablet computer, by demographics, November 2012
Figure 96: Online shopping methods used to complete an online grocery purchase using a web browser on a smartphone and a web browser on a tablet computer, by demographics, November 2012
Figure 97: Online shopping methods used to add items to my online basket by scanning items on a ‘shopping wall’ using a smartphone and an internet-enabled television, by demographics, November 2012
APPENDIX – THE CONSUMER: ONLINE SERVICES USED OR CONSIDERED
Figure 98: Online shopping services used or would consider using, online grocery shoppers, November 2012
Figure 99: Usage of online shopping, by online shopping services used to collect online grocery orders from a drive-thru collection point and online shopping services used to collect online grocery orders from an in-store collection point, November 2012
Figure 100: Usage of online shopping, by online shopping services used to purchase a delivery pass, which, for a one-off fee, covers the cost of online grocery deliveries for a fixed period of time and online shopping services used to try a different online grocer for a single shop because of an introductory offer, November 2012
Figure 101: Usage of online shopping, by online shopping services used to return substituted products where the product I have ordered is not available and online shopping services used to return products where I think the shelf life is too short, November 2012
Figure 102: Usage of online shopping, by online shopping services used to pay a higher delivery charge for same-day delivery, November 2012
Figure 103: Retailers used for grocery shopping, by online shopping services used to collect online grocery orders from a drive-thru collection point and online shopping services used to collect online grocery orders from an in-store collection point, November 2012
Figure 104: Retailers used for grocery shopping, by online shopping services used to purchase a delivery pass, which, for a one-off fee, covers the cost of online grocery deliveries for a fixed period of time and online shopping services used to try a different online grocer for a single shop because of an introductory offer, November 2012
Figure 105: Retailers used for grocery shopping, by online shopping services used to return substituted products where the product I have ordered is not available and online shopping services used to return products where I think the shelf life is too short, November 2012
Figure 106: Retailers used for grocery shopping, by online shopping services used to pay a higher delivery charge for same-day delivery, November 2012
Figure 107: Retailers used for grocery shopping, by online shopping services used to collect online grocery orders from a drive-thru collection point and online shopping services used to collect online grocery orders from an in-store collection point, November 2012
Figure 108: Retailers used for grocery shopping, by online shopping services used to purchase a delivery pass, which, for a one-off fee, covers the cost of online grocery deliveries for a fixed period of time and online shopping services used to try a different online grocer for a single shop because of an introductory offer, November 2012
Figure 109: Retailers used for grocery shopping, by online shopping services used to return substituted products where the product I have ordered is not available and online shopping services used to return products where I think the shelf life is too short, November 2012
Figure 110: Retailers used for grocery shopping, by online shopping services used to pay a higher delivery charge for same-day delivery, November 2012
Figure 111: Retailers used for grocery shopping, by online shopping services used to collect online grocery orders from a drive-thru collection point and online shopping services used to collect online grocery orders from an in-store collection point, November 2012
Figure 112: Retailers used for grocery shopping, by online shopping services used to purchase a delivery pass, which, for a one-off fee, covers the cost of online grocery deliveries for a fixed period of time and online shopping services used to try a different online grocer for a single shop because of an introductory offer, November 2012
Figure 113: Retailers used for grocery shopping, by online shopping services used to return substituted products where the product I have ordered is not available and online shopping services used to return products where I think the shelf life is too short, November 2012
Figure 114: Retailers used for grocery shopping, by online shopping services used to pay a higher delivery charge for same-day delivery, November 2012
Figure 115: Online shopping services used to collect online grocery orders from a drive-thru collection point and online shopping services used to collect online grocery orders from an in-store collection point, by demographics, November 2012
Figure 116: Online shopping services used to purchase a delivery pass, which, for a one-off fee, covers the cost of online grocery deliveries for a fixed period of time and online shopping services used to try a different online grocer for a single shop because of an introductory offer, by demographics, November 2012
Figure 117: Online shopping services used to return substituted products where the product I have ordered is not available and online shopping services used to return products where I think the shelf life is too short, by demographics, November 2012
Figure 118: Online shopping services used to pay a higher delivery charge for same-day delivery, by demographics, November 2012
APPENDIX – THE CONSUMER: ONLINE SERVICES USED OR CONSIDERED BY NON-ONLINE SHOPPERS
Figure 119: Online shopping services would consider using, non-online grocery shoppers, November 2012

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