The online share of food shopping in the UK was 5.4% in February 2020 according to the ONS. By February 2021, this had risen to 14.7%. However, once restrictions were eased and vaccines were rolled out more widely, online growth declined as grocery shopping habits shifted back to brick-and-mortar.
This stats roundup includes figures that help to illustrate the quick growth in online grocery in the UK and US over the course of the pandemic, the subsequent dip in 2021, and the lasting changes that are being seen in the sector.
For more stats, see the following articles:
13.4% of US grocery shopping was digital in December, with mobile edging out over desktop
A December 2021 survey of 3,300 US consumers, conducted by PYMNTS, found that grocery shopping over the holiday period was still overwhelmingly carried out in-store, with 86.6% of consumers buying groceries in physical stores compared with 13.4% buying them online. By contrast, US consumers were 2.5 times as likely to make other types of retail purchases (excluding automobiles and petrol) online, with 33.1% of US consumers making other retail purchases online in December, and 66.9% buying them in-store.
When online sales were split up by device, a higher percentage of grocery sales were revealed to have been made on a mobile device than on a laptop or desktop – by a very small margin: 6.7% of grocery sales were made online on a mobile device, compared with 5.9% on a laptop or desktop computer. By contrast, overall retail sales were still weighted towards desktop, with 13.4% of sales being made online through a mobile device, and 18.5% being made online using a laptop or desktop computer.
Costco ecommerce sales climb 14.3% in Q1 2022 trading update
US wholesale retailer Costco has reported healthy sales for the first fiscal quarter of 2022, with overall comparable sales rising 15% year-over-year, and ecommerce sales climbing 14.3%. Top-performing departments in ecommerce reportedly included jewellery, tyres and home furnishings.
Additionally, Costco Logistics, Costco’s bulk-size product online sales arm, saw a 50% jump in deliveries during the same quarter, and now represents 70% of all Costco US ecommerce big- and bulk-product shipments. The retailer has also expanded its Costco Next ecommerce programme, which allows members to buy items at “Costco value” directly from a curated selection of vendors. The programme has been in place since 2017, but was recently expanded to encompass 34 brands in total.
Chief Financial Officer Richard Galanti told analysts in a conference call that Costco was continuing to develop its online experience. “We continue to improve our ecomm mobile app with additional features,” he said. “We’ve redesigned the app header and footer. We’ve updated and improved the menu layout. Our members now have the ability to view warehouse receipts online via both the app and desktop. Our co-branded Citi Visa card can now be linked to the Digital Membership Card and used for payment.”
In addition, “Members are now able to much more easily reschedule ecomm deliveries in the U.S. and Canada. The same goes for rescheduling returns, with returns pickups.”
Costco is also improving the ecommerce amenities in its warehouses with the rollout of new ecommerce kiosks that offer “easy touchscreen ordering”, and is also rolling out ecommerce lockers. Galanti told analysts that the retailer plans to more than double its 112 locker locations across the US during the calendar year 2022.
91% of UK city-dwellers have yet to use a rapid grocery delivery app
‘Q-commerce’, the name given to the burgeoning suite of retail businesses – typically grocery retail businesses – promising delivery in a matter of minutes has enjoyed a considerable amount of marketing buzz and industry discussion over the past year. Yet a survey of 1,000 UK city-dwellers carried out by InMobi found that a relatively small percentage of consumers report using them so far: just 9%.
The report, which surveyed consumers living in three of the UK’s major cities – London, Manchester and Birmingham – where rapid grocery delivery apps are widespread, found that awareness of the apps was high among consumers, with 68% reporting that they had heard of them, and 32% reporting that they had not. Recognition of specific brands appears low, however: when quizzed on their awareness of a range of rapid grocery apps, 59% of consumers said that they had not heard of any of them; Getir enjoyed the highest level of awareness at 10%, while 9% of consumers were aware of Jiffy.
The group of consumers actually using rapid grocery apps was a relatively small sample size, but some demographic trends could be identified: InMobi found that (somewhat unsurprisingly) usage was highest among the 18-24 age group, with 16% saying they were users of rapid grocery apps; next came the 25-34 age group at 14%. Interestingly, usage was more prevalent among the 45-54 age group (10%) than among the 35-44 age group (7%).
When asked what type of shopping trip the apps might supplant, 35% of app users said they could see it replacing their “quick trip to corner shops”, while 29% could imagine it replacing the weekly trip to a larger supermarket. A further 20% believed it would replace their online grocery shop at a major retail brand such as Ocado, Amazon, or Tesco.
In hopeful news for supermarket incumbents, however, the survey found that the majority (75%) of rapid grocery app users would opt for established supermarket brands over newer delivery apps – if they offered guaranteed 10-minute grocery deliveries. This might be a tall order for supermarkets not enjoying large influxes of investment funding to offset the losses of last-mile grocery delivery, but some are willing to trial the prospect: Tesco recently partnered with Gorillas to trial 10-minute rapid delivery from its supermarkets, in the first partnership of its kind.
US online grocery sales in November 2021 up 6% compared with a year prior
According to a survey fielded by Brick Meets Click and Mercatus in November 2021, the US online grocery market generated $8.6 billion in sales during November, including $7 billion from pickup and delivery and $1.6 billion from ship-to-home (grocery items – typically dry goods – shipped through parcel couriers like FedEx, UPS, and USPS). This represented a 6% sales gain over the $8.1 billion in online grocery sales reported in November 2020.
The number of households buying online groceries also jumped 15% between November 2020 and November 2021, with nearly 69 million US households buying some amount of groceries online.
In particular, the Pickup segment of online grocery has grown considerably when compared with November 2020, growing dollar sales 29% versus the previous year, compared with just 6% growth for Delivery over the same period. Ship-to-Home sales, meanwhile, dropped 27% over this 12-month period, reflecting the changes in US consumers’ grocery buying habits.
David Bishop, Partner at Brick Meets Click, said that, “Even as total online grocery sales increase, some conventional and regional grocers have reported softer sales performance during November, which is why looking at the broader eGrocery market is so important for identifying specific opportunities for improvement. For example, not offering pickup is likely to weigh on sales growth.”
Pageviews across big UK supermarket websites have dropped by an average of 21.5% since March 2021 peak
Pageviews across UK supermarkets’ websites have dropped by an average 21.5% since they peaked in March 2021, reflecting an increased move by consumers to in-store shopping during the approach to Christmas. Of all the large supermarket chains in the UK, Aldi has experienced the largest drop-off in traffic, declining 35% in this eight-month period. Meanwhile, Morrisons saw pageviews fall by 30%, and Sainsbury’s by almost one-quarter, according to data from Similarweb.
Big names Tesco and Asda, however, appear to be retaining customers on its online platforms more effectively, with each seeing an 18% decline in traffic by comparison. They also ranked highest for the proportion of return visitors to their websites in November – 70% of Tesco’s pageviews originated from those who had visited or shopped there before, while they made up 65% of views on Asda.com. Sainsbury’s came third in this metric at 64%, and Morrison’s fourth at 58%.
Whilst pageviews are down on their pandemic peak, they are still around 35% higher than pre-pandemic levels.
Nearly 1 in 4 US online grocery shoppers plan to make more frequent purchases in 2022
An October 2021 survey by Acosta has found nearly 1 in 4 (23%) of US online grocery shoppers plan to make more frequent purchases via this method in the coming year. This figure rises to 31% of those who say they shop online all or most of the time, and to 27% of those who regularly shop online but make the majority of purchases in in-store environments.
Convenience, a stress-free experience and speed are the most important characteristics of online grocery shopping according to American consumers. However, 80% say they still like to pop in-store for specific items that they prefer to pick out themselves.
Data shows ecommerce will now account for 20% of the US grocery market within the next five years to 2026, compared to just 14.5% had the pandemic not occurred. This demonstrates that Covid-19 online shopping behaviours have become habit-forming and will permanently and steadily grow in the wake of the pandemic to reach $1.29 billion in revenue. Current share of online grocery sits at around 9.5% in the region.
Total UK online grocery sales fall 8.6% year-on-year in October 2021 ahead of Christmas period
Total UK online grocery sales fell 8.6% year-on-year in October 2021 as consumers opt to shop in-store ahead of Christmas. Visits to brick and mortar supermarkets increased by 6.5% in the four weeks to November 6th, equating to an additional 28 million more visits than the same time the year before. This is according to new NielsenIQ data reported by The Grocer.
While this represents quite a significant decline for the online grocery market, online share of sales only dipped slightly. It now accounts for 12.2% of all grocery sales, down from 12.6% in September. Nielsen puts this down to smaller basket sizes among shoppers as the need to stock up on food products has reduced. Threats of an imminent winter lockdown are also less prominent.
There remains plenty of uptake in online grocery delivery methods, with the number of households shopping this way at least once a month declining just 3% year-on-year. However, many have also been tempted back in-store as evidenced by greater footfall and only a slight decline in till sales (2%) as data laps periods of very high demand in 2020. As a result, it is likely we will see consumers continue to adopt this hybrid approach to regular food shopping now that old and new habits align.
September 2021 UK online grocery sales at lowest since May 2020, while average basket size falls
UK online grocery sales fell to 12.2% of the total grocery market in September 2021, compared to 13% in the four weeks before, according to a report from The Guardian on recent research by Kantar. This marks online share at its lowest since May 2020 as even more consumers start travelling to brick-and-mortar stores to buy food.
The average household now spends £78.28 when checking out online, which is almost £17 less than what was recorded at the peak of the pandemic, reflecting a move to smaller, more frequent in-store grocery visits, mixed with eating out, rather than big weekly or fortnightly deliveries.
Supermarket prices increased in September, while the number of promotions online and offline plummeted, analysis indicates. In the four weeks to mid-September, just 27.5% of money spent on groceries were applicable for deals and discounts, which according to Kantar is the ‘lowest level recorded in 15 years’.
Consequently, total grocery sales fell by 1.9% year-on-year during the 12 weeks to mid-September, but remain much higher than before the pandemic began(+8.7%). However, footfall is rising, with supermarkets seeing the highest number of in-store customers all year (outside of Easter) during the first week of September.
Walmart’s US ecommerce sales rose 37% year-on-year in Q1 2021
US ecommerce sales for retail giant Walmart rose 37% year-on-year in Q1 2021, and 49% across its international markets, according to a financial statement.
The sharp increase in the retailer’s international ecommerce earnings was perhaps the most surprising figure of all, given its recent divestments of Asda in the UK and Seiyu in Japan. Meanwhile, consistent growth in its US online revenue for the quarter has meant Walmart’s ecommerce sales in the region have more than doubled in the last two years.
One of its brands, Sam’s Club, a membership-only retailer, saw a particularly strong increase in ecommerce sales over the period, jumping 47%. Overall Sam’s Club membership ‘reached an all-time high’, and income (across all channels) grew 12.7%, according to the statement. Consequently, as with other membership-based retailers, Sam’s Club appears to have bucked the recent trend of consumers abandoning brand loyalty in favour of price or convenience.
Doug McMillan, CEO of Walmart says he expects many consumers to resume shopping in person, which could impact the spike in ecommerce growth moving forward: “In the U.S., customers clearly want to get out and shop… We anticipate continued pent up demand throughout 2021.”
59% of UK grocery shoppers are more price sensitive than they were before the start of the pandemic
A March 2021 survey conducted by Pricer found that 59% of UK grocery shopper respondents are more price sensitive than they were before the start of the pandemic, thanks to continued financial uncertainty among consumers. In contrast, just 15% said their price sensitivity had not been impacted by the coronavirus.
Nearly one half (49%) claim to have switched to cheaper own-brand products since the onset of coronavirus, while just over one in five (22%) continued to shop their preferred branded products. However, 60% of those surveyed now say they are more conscious of, and likely to take advantage of, promotional offers in order to make the most of their budgets.
A substantial 43% plan to continue their online booking of delivery slots and click and collect once the pandemic is over, suggesting a permanent shift in shopping habits for some customers.
But convenience is not the only new habit that grocery shoppers have picked up since March 2020. A further 55% of respondents said that they have become increasingly more mindful of purchasing locally sourced produce as they endeavour to make more sustainable choices.
Online share of UK grocery shopping reached record 14% in January 2021
Analysis of data from Kantar by the Retail Gazette found that online share of grocery shopping in the UK reached a record 14% in January 2021, thanks to increased spending by older demographics.
Retired households increased their online grocery spend by 229% between January 2020 and January 2021, the findings suggest, proving that older generations are becoming more comfortable with using supermarkets’ online booking and delivery. They now account for 28% of the 6.4 million customers using these services so far in January. Meanwhile, parents have increased their grocery spend by £50 a month year-on-year, thanks to ongoing school closures and home working.
Across online and offline channels, shoppers spent £1 billion more with supermarket brands than they did during the same period last year, with a 23% rise in vegan products purchased as families took part in Veganuary.
July 2021 saw year-on-year UK sales growth for online groceries falling for the first time ever
Kantar research shows 81,000 fewer people bought groceries online in July in the UK, compared to the same four weeks in 2020. Digital baskets shrunk by 8% to £80 and YoY sales growth consequently fell by 2.6%, the first dip on record. Online currently accounts for 13.3% of the market.
The online drop-off comes amid a 5.1% fall in take-home grocery sales for the 12 weeks to 11 July 2021. However, despite this YoY decrease, shoppers still spent £3 billion more compared to the same period in 2019.
Find out more from Kantar.
Data reveals click and collect and online grocery shopping among online shopping habits here to stay
Research from Mood Media, published in June 2021, surveyed more than 8,000 consumers from the US, UK, France and China and revealed new online shopping habits that are most likely to continue post-pandemic, and those that are not.
Ordering online to collect in-store is proving to be a very popular option which consumers are hoping to continue taking advantage of once restrictions lift. In fact, one-third of US respondents cited curbside pick-up as a future preference – more than double the worldwide average of 14%.
Globally, 25% of consumers have said they would prefer to continue shopping online for groceries rather than venturing in-store, with the UK and US leading this trend, while 23% said the same when it comes to buying technology and electronics.
Not all shopping behaviours developed during the Covid-19 pandemic are here to stay, however. The report indicated 3 in 5 (60%) said they expect to return to their old shopping habits by the end of 2021, rising to 74% in the US, which could be welcome news for bricks-and-mortar retailers. In contrast, the number of consumers who predict their shopping behaviours never to return to pre-pandemic levels is higher in the UK (14%) than the global average (9%), suggesting retail trends may differ in this market in the mid to long term.
So far, just 21% of all respondents said they have returned to their pre-pandemic shopping behaviours.
Ocado group saw 22% increase in customers served in half-year 2021 results
In June, Ocado released its half-year results for the 26 weeks ending 30th May 2021. It revealed a 22% year-on-year increase in the number of active consumers it was serving, despite the loosening of coronavirus restrictions in Spring 2021 and tough comparison to results from the first peak of the pandemic in H1 2020. Total customers served in H1 2021 reached 777,000 compared to 639,000 the year before, due in part to a decline in basket size as demand for produce slightly reduced amid the reopening of the hospitality sector.
Average orders per week have grown by 19.7% to 356,000 in the six-month period thanks to Ocado’s recently elevated fulfilment capacity brought on by the original wave of the pandemic. Meanwhile, retail revenue rose by nearly 20% to £1.2 billion, with ‘strong new customer and order growth as Covid-19 restrictions ease’ the statement said. According to further data from the Group, weekly ordering habits, which were more widely spread throughout lockdowns, are beginning to return to pre-Covid patterns.
Ocado says it has doubled the number of customers with pre-booked delivery slots in H1 2021, and with plans to open two additional fulfilment centres in the second half of this year, the company says it looks forward to serving even more existing and new customers in the near future.
Health, beauty and personal care product sales to grow 3x faster online than in-store
Having experienced huge acceleration over the past 18 months, the health, beauty and personal care product category is expected to see even more rapid growth over the course of the next five years, WARC reports. Its sister company, Edge by Ascential, has revealed that sales of such products are expected to grow three times faster in online settings than they are in in-store settings by 2026.
Ecommerce sales of this product category are predicted to reach $358.4bn by this time, at a compound annual growth rate of 12.1% versus just 3.3% for store-based sales. The anticipated market value for health, beauty and personal care at the end of 2021 is $202.3bn.
This growing gap between physical and online sales within the beauty sector demonstrates an increased need, as first identified during the pandemic, for accurate and seamless virtual try-on experiences for consumers. While some retailers have recently made steps in this area, more innovation and investment is required to allow customers to feel confident in making purchases of products that typically need to be sampled in real life.
If the predicted 12.1% compound annual growth rate is achieved, it would mean that ecommerce could account for 26.8% of total retail sales for the vertical. For comparison, ecommerce is expected to account for 19.5% of health, beauty and personal care sales by the end of this year as Covid-19 maintains an influence on shopping habits.
Tesco saw H1 2021 online grocery sales grow a further 2.3% above busy 2020 levels
Tesco maintained its momentum in online grocery sales, which grew a further 2.3% (like-for-like) in the six months to August 2021, against a then record-breaking H1 2020. When pitted against pre-pandemic results two years ago, this growth rises to an impressive 74.1%.
According to an interim statement, the supermarket chain has 6.6 million customers using its online grocery app, while over 20 million households are signed up to its Clubcard loyalty programme to date.
These results are in spite of an increasing number of shoppers opting to shop in-store following the lifting of most coronavirus restrictions in the early summer. Consequently, Tesco is investing even more into its online fulfilment capability, particularly in the run-up to the festive season.
‘Our annual online sales have already exceeded £6bn, boosted by increased demand as a result of the Covid-19 pandemic,’ the statement revealed, ‘We plan to continue this growth whilst constantly innovating to improve efficiency, for example through the roll-out of urban fulfilment centres (UFCs) and continued improvements in our existing manual picking and delivery operations.’
A combination of increased in-store spend and a buoyant online grocery business has resulted in Tesco revising its full-year revenue outlook upwards to £2.5-2.6 billion.
This news came as rival Morrisons announced a reduction to its online grocery delivery service, removing the pick and pack service from 50 of its stores across the country after seeing online orders subside post-lockdown.
Ocado reported 35% revenue growth in 2020
Online-only grocery retailer Ocado reported a 35% year-on-year revenue growth in 2020 in a financial statement, a result that it claimed reflects ‘strong demand for online grocery in the UK’ amid the coronavirus crisis. Total revenue reached £2.19 billion across the year.
Ocado attributes its success to a number of different aspects of its business operation. An additional 500 staff members were recruited in 2020 at the height of demand. Forty percent of these recent hires have been designated roles in advanced technology, such as the operation of robotic picking systems.
Furthermore, despite the disruptive effects of the pandemic and resulting uncertainty for customers, the company also stated that it had received ‘leading customer service metrics’ in its joint venture with M&S foods. Q3 2020 analysis from Sobeys, as cited in the results, revealed on-time delivery rates of 98.6%, a 99.6% basket accuracy upon delivery and an overall Net Promoter Score of 87%.
Ocado named 2020’s fastest-growing UK brand
BrandZ named grocery chain Ocado as the UK’s fastest growing brand in 2020 in its annual Top 75 Most Valuable Brands report.
The company jumped 16 places in the Top 75 list for 2020, following a 63.3% growth in brand value change since 2019, settling at number 18. Its online-only formula, unlike other brands in the sector which also have brick-and-mortar stores, places it in an excellent position for growth through digital innovation. According to the report, demand for its services during the peak of the pandemic was at 10 times it usual level for the time of year.
Others that have seen particularly fast growth also fall within the food category – Deliveroo, growing by 40% in brand value change in 2020, made number 29 on the list, while Just Eat grew by 19%, placing it just below Ocado at number 20.
Vodafone came out on top in the top 75 most valuable brands list, followed by HSBC, Shell, BP and BT, despite all of these brands measuring double-digit declines in brand value since 2019. In fact, just 10 brands out of all 75 experienced growth overall, highlighting the massive impact Covid-19 has had on the majority of verticals. The rest saw declines or flat growth or were new to the list in 2020.
Online share of UK grocery sales doubled in December 2020
The Grocer reported Nielsen figures, published in January 2021, which indicate the online share of UK grocery sales doubled in December 2020 to 12.5%, making last December the biggest on record for the sector.
In fact, supermarkets saw record December sales across all channels, with total sales growing 8.4% in the four weeks ending Boxing Day. Overall, customers spent £12 billion during this period, of which some £1.3 billion went through online channels. Further data shows that 8.5 million UK households, equating to a little over 30% of total households, shopped online for groceries over the festive season – 5.7 million more than in the same month of 2019.
Unsurprisingly, brick-and-mortar store visits fell 10%, amid concerns for safety during the second wave of the coronavirus, but consumers spent on average £20 more than usual across both online and offline settings.
Lidl experienced the greatest year-on-year growth for the 12 weeks to Boxing Day at a staggering 20.9%. This was followed by Morrisons, which saw 9.2% growth, while Tesco and Sainsbury’s saw increases of 8.6% and 8.1% respectively.
These figures are despite of last-minute restrictions placed on holiday gatherings in large areas of the UK. This appeared to have caused some consumers to hold back on their spending over the last two weeks leading up to Christmas, buying less traditionally festive foods such as steak, which saw sales up 57% during that fortnight, perhaps as a last-ditch alternative to Christmas dinner. Meanwhile, sales of confectionary rose just 2%, reflecting fewer occasions for socialising and gifting this year than in previous years.