Online grocery sales in the UK are set to double by 2018, driven by mobile useage, technology advances and more convenient delivery options from retailers, according to new research. The research, from consumer goods research group IGD, interviewed with more than 1,000 shoppers showing that online sales are expected to show the biggest percentage growth […]
Online grocery sales in the UK are set to double by 2018, driven by mobile useage, technology advances and more convenient delivery options from retailers, according to new research.
The research, from consumer goods research group IGD, interviewed with more than 1,000 shoppers showing that online sales are expected to show the biggest percentage growth in the grocery sector.
The findings indicate that by 2018, the internet market will be worth £8.1 billion, up 123.7 per cent.
Although superstores will still generate the largest proportion of sales, they are set to grow at a much slower rate than other ‘hot three’ formats; online, discount and convenience shopping.
IGD found that that in five years time those three sales channels will account for more than £3 out of every £4 of growth in UK grocery.
By comparison to the web’s £8.1bn, the two other key drivers in the UK grocery sector ‘discounters’ and ‘convenience stores’ will be worth £18.6 billion and £46.2 billion in 2018 respectively.
‘Time and a place that suits consumers’
Joanne Denney-Finch, chief executive of IGD, said: said online and convenience retailing were “reaping the rewards of our changing lifestyles.
“With more of us owning smartphones and tablets, online grocery shopping is becoming more popular. Retailers are also introducing more convenient and flexible services, such as temperature controlled ‘click & collect’ lockers for shoppers to pick up their groceries at a time and place that suits them,” Denney-Finch added.
The rise of ‘little and often’ shopping trips
The value of the UK food and grocery market is to soar by a fifth to a record £206bn by 2018, the IGD found. UK food sales are currently worth almost £170bn, up 3.7 per cent on 2012.
Large supermarkets or superstores and hypermarkets now account for sales of £74.1bn and are set to grow by a sluggish 8.2% to £80.1bn by 2018. The IGD forecasts underline why Tesco is scaling back its plans to open big new stores.
Commenting on the rise of convenience stores, which will bring the biggest cash growth to the sector, Denney-Finch added: “Convenience stores are also benefiting from a cultural shift towards shopping ‘little and often’. They are increasingly providing products tailored to specific locations rather than a ‘one size fits all’ approach.”
Although big supermarket chains such as Asda have warned recently that consumers are still feeling the financial pinch, IGD’s forecast takes into account a gradually-improving economy in which shoppers will feel comfortable in “trading up” to more expensive brands, thus pushing up their overall spend.
However, discount chains such as Aldi and Lidl are still expected to thrive in this improving environment. IGD says many shoppers who have used these chains throughout the recession have grown to like them, and will see no reason to stop using them.
“They have improved shopper perceptions by effectively communicating the quality and value for money of their products, while also expanding the range of items they sell to help shoppers complete more of their weekly shop there,” Denney-Finch said.
Nearly a third of shoppers – 32 per cent – said they would use food discounters more in the year ahead, compared to just 24 per cent in September 2010.
Source: http://www.igd.com/
