Online grocery remains a “very small part” of the UK grocery market and its market share is growing at a pedestrian rate, according to new Nielsen analysis.
Nielsen’s latest retail data reveals that online grocery sales increased by a healthy 4.6% in 2017 to £6.6bn, a third faster than in-store sales growth of 3.4%. However, online’s share of the grocery market only increased from 6.3% to 6.4%.
Aylin Ceylan, Nielsen’s analytics business partner, said online grocery shopping was more of a complementary option to stores, unlike in many other sectors.
She attributed the sluggish growth in market share to frequency rather than popularity or basket size. “Two-thirds of people who buy groceries do so online and the average online basket is around four times bigger than an in-store one,” Ceylan said. In contrast, on average people buy groceries online less than once a month (11 ‘trips’ a year) compared to nearly 21 a month in-store (247 per year).
Online shopping is dominated by the big shop and weekly trips which account for twice the share of online trips (82%) than they do for in-store trips (44%). “In other words, the regular smaller ‘top-up’ shops account for just 18% of online trips compared to 57% for in-store,” she added.
Furthermore, only one in four shoppers say delivery costs are a barrier to buying groceries online.
“Despite the hype and attention given to online and its ability to change the way people shop, the reality seems rather different,” Ceylan said.
“Although online spend increased by around £300m last year, a 0.1% rise in market share is a rather pedestrian rate. Many will be surprised it’s not faster but online shopping in grocery, unlike many other sectors, is much more a complementary option to stores not an ‘instead of’ option.”
However, 2018 may be a seismic year for online grocery shopping. “The rise of voice assistants from Google and Apple, the Dash button from Amazon, the extension of click & collect to more supermarkets all [make] it easier for shoppers, as well as online meal-kit and ‘box’ subscriptions such as Hello Fresh and Graze offering new purchasing opportunities,” she concluded.