Waitrose and Marks & Spencer are ramping up their efforts to attract more online grocery sales in the run-up to the Ocado switch-over, as new figures reveal the market soared by 107% over the past month alone, bringing in hundreds of millions of pounds.
M&S, which today announced a swathe of job cuts, is set to replace Waitrose on Ocado’s platform at the end of the month, having signed a deal in August last year.
M&S paid an upfront fee of £562.5m, with a further £187.5m conditional on performance over five years, for a 50% stake in Ocado.
The retailer is pinning its hopes on the “Remarksable” value range, which is being launched through an ad campaign, created by Grey London. M&S claims the 6,000 products that will replace Waitrose’s 4,000 products on Ocado from September 1 will be the same price or cheaper than their equivalent.
M&S Food managing director Stuart Machin said: “We have spent the past 18 months continuously upgrading our quality and at the same time investing in price, and now customers can see the result as 240 key staple items are the most competitively priced in recent history.”
Meanwhile, Waitrose has unleashed a major marketing campaign by Adam & Eve/DDB to “bring home Ocado shoppers to Waitrose.com”, featuring press, PR, CRM and social media.
The company, which will now handle all online grocery orders from its main website, has developed 5,000 new or reformulated products to boost its own brand range. It insists that until now own brands have represented a quarter of Ocado’s online sales.
Waitrose customer director Martin George said: “Waitrose own label products have historically made up a quarter of Ocado’s grocery sales, so we know a lot of people who use the service love our products, are loyal to our brand and are keen to avoid any disruption.
“With that in mind, we have focused on retaining and reformulating our customers’ favourite products as well as developing thousands of new ones – all of which are sure to entice them to Waitrose.com.”
According to the latest data from Nielsen, online grocery sales rose by 117% in the four weeks to August 8, achieving a record market share of 14%.
UK shoppers spent £678m more on FMCG products during the month, with online sales accounting for 97% of this growth, equating to £658m.
Nielsen head of retailer and business insight Mike Watkins said: “It is evident that some new shopping habits that developed as a result of the pandemic – such as opting to shop online – continue. UK shoppers are now establishing a new, regular shopping routine and we can expect the current levels of growth to continue for the rest of the summer.
“Shoppers are still shopping less often than they did prior to the pandemic, visits to stores are down 15% on the same period last year, but up from the 22% decrease registered in May, so there are signs of a willingness to return.
“The shift to online grocery shopping, which looks set to stay, is the most dramatic change of shopping behaviour we’ve ever seen. Though it has clearly been a positive game-changer for shoppers and some retailers, it has come at the expense of stores – something that we have already seen in non-food retailing.”
Yesterday, it was revealed that market leader Tesco was planning to add free delivery for online orders for members of its Clubcard Plus premium loyalty scheme, which was launched last November.
The move is in response to Amazon’s planned expansion of the Amazon Fresh service. And, even Aldi is preparing an ecommerce operation, too.
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