‘Seismic’ shift to push online grocery market up 33%

RetailThe Covid-19 pandemic is set to bring boom times to the online grocery market after four consecutive years of snail-like growth, with 2020 seeing the sector soar by 33% to reach an estimated value of £16.8bn, up from £12.7bn last year.

So says a new report from Mintel, which claims the lockdown surge is likely to be sustained for years to come as it has converted many doubters to the joys of grocery deliveries.

It goes on to predict that the market will be worth £17.9bn by 2024, growing by 41% over the five year period.

In the early days of the coronavirus in the UK, before social distancing measures were introduced, just over one in 20 (7%) Brits increased the total amount of online shopping (both food and non-food). But in fewer than two months, the market has seen a dramatic boost, with the number of consumers who say they have increased their online shopping rising to over one in three (36%).

Meanwhile, half (50%) of Brits have tried to limit the time they spend in-store, while a further 9% have used click-and-collect more.

The current guidelines, which ask those aged 70 and over to remain at home, mean that older shoppers are more heavily reliant on having groceries and other goods delivered.

While some older Brits are experienced in ordering online, they are by far the minority. Less than three in 10 (28%) UK Internet users aged 65-plus were online grocery shoppers prior to the Covid outbreak. However, Mintel’s research shows 37% of over 65s have increased the amount of online shopping they have done since the outbreak began.

Even so, many are still relying on friends and family, with a quarter (24%) of consumers aged under 44 saying they have been helping friends and family or neighbours with their shopping.

Mintel associate director of retail research Nick Carroll claimed that Covid-19 has had a “seismic impact” on Britain’s grocery sector.

He added: “The pandemic is giving a significant short-term boost to online grocery services, as shoppers look to avoid stores and limit their contact with the outside world. However, the impact will last beyond the crisis.

“Shopper numbers in the online grocery market have plateaued in recent years as retailers struggled to get new customers to try these services. The outbreak is bringing a new audience to online grocery, and this should boost the market long term with strong growth forecast through to 2024.”

However, he said that with a significant number of consumers in the older age groups having no experience shopping online for groceries and/or are not digitally native, there is a real need to ensure access to online grocery deliveries for older consumers.

Carroll concluded: “We’re seeing some retailers already thinking of easier ways to order goods, including phone orders for next-day delivery.”

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