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Online Grocery Shopping Industry - UK - September 2012

Questions answered about the online grocery shopping industry include:

  • What will the future of grocery retailing look like?
  • What innovations do consumers want?
  • What opportunities are there for alternative online models?
  • Can – and should – digital refuseniks be converted?

Estimated to add an additional £1 billion in sales in 2012, the online grocery sector more than doubled in size between 2007 and 2012. And Mintel forecasts sector sales to increase by a further 79% on 2012 levels by 2017.

However, relative to the total grocery market in the UK, the online sector remains small at less than 5% of all grocers’ sector sales in 2012 – a figure that is disproportionately low considering that 10% of consumers surveyed for this report claimed to do all or most of their grocery shopping online.

This report examines the sector’s growth and prospects in detail, charts the market shares of the leading operators, assesses the performance of the major online grocers and considers the important issues in the sector.

Our extensive consumer research examines who is shopping online, and asks questions such as what proportion of online groceryshoppers would like innovations such as drive-through or in-store collection for online orders, to what extent issues such as product quality and substitutions deter non-online shoppers from buying groceries online and what percentage of online shoppers switch between retailers for special offers.

The online grocery sector size is defined as the online sales of food and drink for in-home consumption, including store-based grocers’ FMCG sales online, food and drink specialist retailers’ online sales, online-based grocers’ sales and online-based food box delivery schemes.

 It excludes restaurant food delivery and home delivery of food not ordered online.

 It also excludes store-based grocers’ non-FMCG sales online, such as clothing and electrical goods.

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Table of contents

  1. Introduction

      • Definition
        • Financial definitions
          • VAT
            • Sales per store, sales per sq m
              • Other
                • Abbreviations
                • Executive Summary

                    • The market
                      • Figure 1: Online grocery sales and forecast, 2007-17
                      • Figure 2: Online grocery sales as percentage of total grocers’ sector sales, 2007-12
                    • Market factors
                      • Companies, brands, and innovation
                          • Figure 3: Leading online grocers’ shares of online grocery sales, 2010 and 2011
                        • The consumer
                          • Figure 4: Usage of online grocery shopping, July 2011 and June 2012
                          • Figure 5: Online grocery shoppers’ interest in services/features, June 2012
                          • Figure 6: Online grocery shoppers’ behaviours and attitudes, June 2012
                          • Figure 7: Non-online grocery shoppers’ reasons for not shopping for groceries online, June 2012
                          • Figure 8: What would encourage non-online grocery shoppers to buy groceries online, June 2012
                        • What we think
                        • Issues in the Market

                            • What will the future of grocery retailing look like?
                              • What innovations do consumers want?
                                • What opportunities are there for alternative online models?
                                  • Can – and should – digital refuseniks be converted?
                                  • Trend Application

                                      • Inspire trend: Cam Cam
                                        • Inspire trend: Influentials
                                          • 2015 trend: Old Gold
                                          • Economic and Demographic Context

                                            • Key points
                                              • Economic context
                                                • Figure 9: UK: Consumer confidence levels, August 2011-July 2012
                                                • Figure 10: Retail prices index and average weekly earnings: Annual % change, January 2009-June 2012
                                                • Figure 11: Consumer prices index: Annual % change, July 2011-July 2012
                                              • Demographic trends
                                                • Figure 12: England: One-person households as percentage of all households, projected from 2008 data, 2008-28
                                                • Figure 13: Great Britain: Mid-year population projections, 2011-20
                                            • Consumer Spending on Key Categories

                                              • Key points
                                                • Food and drink
                                                    • Figure 14: Breakdown of spending on food, beverages and tobacco, 2011
                                                    • Figure 15: Consumer spending on in-home food, beverages and tobacco (inc VAT), 2007-11
                                                  • Non-food FMCGs
                                                    • Figure 16: Consumer spending on personal care, household and over-the-counter pharmaceutical products, 2007-11
                                                  • Total potential market
                                                  • Sector Size and Forecast

                                                    • Key points
                                                      • The sector size
                                                        • Recent performance
                                                          • Forecast to 2017
                                                              • Figure 17: Online grocery sales and forecast, 2007-17
                                                              • Figure 18: Online grocery sales and forecast, 2007-17
                                                            • Online’s share of the grocery sector
                                                              • Figure 19: Online grocery sales as percentage of total grocers’ sector sales, 2007-12
                                                            • The Mintel forecast
                                                            • Strengths and Weaknesses

                                                              • Strengths
                                                                • Weaknesses
                                                                • Who’s Innovating?

                                                                  • Apprentice finalist to launch online food shopping service
                                                                    • Recipe ingredients delivered to your door
                                                                      • Cloud-based grocery shopping
                                                                        • Cash-based online shopping
                                                                          • Charities benefit from innovative new online drinks shopping service
                                                                            • Slingshot to revolutionise online grocery shopping
                                                                              • Subscription schemes offering unlimited home deliveries
                                                                                • ‘Click and collect’ combines online convenience with in-store experience
                                                                                  • Ocado’s own-label shop-in-shop to boost its own-brands
                                                                                    • Amazon Lockers service
                                                                                      • Commuter grocery shopping taps into m-commerce trend
                                                                                      • Leading Retailers and Market Shares

                                                                                        • Key points
                                                                                          • Gainers and trailers
                                                                                              • Figure 20: Leading online grocers’ shares of online grocery sales, 2010 and 2011
                                                                                            • Leading retailers’ revenues
                                                                                              • Figure 21: Leading online grocers’ estimated revenues (excl VAT), 2007-11
                                                                                              • Figure 22: Major grocers’ online grocery revenues as percentage of their total UK revenues, 2011
                                                                                            • The holdouts: Morrisons, Iceland, Co-operative
                                                                                              • The question of profitability
                                                                                                • The food specialists
                                                                                                  • Market shares: in detail
                                                                                                    • Figure 23: Leading online grocers’ market shares, 2007-11
                                                                                                  • Visitor numbers
                                                                                                    • Figure 24: Leading food retail websites, by total unique visitors, three-month average to July 2012
                                                                                                • Retailer Profiles

                                                                                                    • Figure 25: Leading online food retailers’ comparison data, 2012
                                                                                                  • Amazon
                                                                                                      • Figure 26: Amazon.co.uk (total – not just grocery): Composition of unique visitors to website, three-month average to July 2012
                                                                                                    • Asda
                                                                                                        • Figure 27: Asda.co.uk: Composition of unique visitors to website, three-month average to July 2012
                                                                                                        • Figure 28: Asda’s online grocery product mix, based on count of available product lines on the grocery site in July 2012
                                                                                                      • Ocado
                                                                                                          • Figure 29: Ocado.com: Composition of unique visitors to website, three-month average to July 2012
                                                                                                          • Figure 30: Ocado’s online grocery product mix, based on count of available product lines on the grocery site in July 2012
                                                                                                        • J. Sainsbury
                                                                                                            • Figure 31: Sainsburys.co.uk: Composition of unique visitors to website, three-month average to July 2012
                                                                                                          • Tesco
                                                                                                              • Figure 32: Tesco.com: Composition of unique visitors to website, three-month average to July 2012
                                                                                                              • Figure 33: Tesco’s online grocery product mix, based on count of available product lines on the grocery site in July 2012
                                                                                                            • Waitrose
                                                                                                                • Figure 34: Waitrose.co.uk: Composition of unique visitors to website, three-month average to July 2012
                                                                                                                • Figure 35: Waitrose online grocery product mix, based on count of available product lines on the grocery site in July 2012
                                                                                                            • Advertising and Promotion

                                                                                                              • Key points
                                                                                                                • Adspend down in 2011
                                                                                                                  • Figure 36: Total main media adspend in the UK online grocery retailing sector, 2009-12
                                                                                                                • Ocado’s share of adspend slumps
                                                                                                                  • Figure 37: Share of main media adspend in the UK online grocery retailing sector, by company, 2009-11
                                                                                                                • Tesco is the biggest spender in the UK online grocery retailing sector
                                                                                                                  • Figure 38: Leading advertisers in the UK online grocery retailing sector, 2009-11
                                                                                                              • The Consumer: Online Shopping in Context

                                                                                                                • Key points
                                                                                                                  • About the data
                                                                                                                    • Shopping behaviour
                                                                                                                        • Figure 39: Trends in frequency of making a purchase online, 2008-12
                                                                                                                        • Figure 40: Trends in frequency of buying food, drink and household products, 2008-12
                                                                                                                        • Figure 41: Deciding factors when shopping for food, drink and household products, 2008-12
                                                                                                                      • Accessing the internet
                                                                                                                        • Figure 42: Trends in type of connection at home, 2008-12
                                                                                                                        • Figure 43: Trends in ways of accessing internet, 2008-12
                                                                                                                    • The Consumer: Who is Shopping Online for Groceries?

                                                                                                                      • Key points
                                                                                                                        • Numbers shopping online
                                                                                                                            • Figure 44: Usage of online grocery shopping, July 2011 and June 2012
                                                                                                                          • By demographics
                                                                                                                              • Figure 45: Usage of online grocery shopping, by age/affluence, June 2012
                                                                                                                              • Figure 46: Regular usage of online grocery shopping: penetration levels, by selected demographics, June 2012
                                                                                                                              • Figure 47: Non-usage of online grocery shopping: penetration levels, by selected demographics, June 2012
                                                                                                                            • By main grocery shop retailer
                                                                                                                                • Figure 48: Usage of online grocery shopping: penetration levels, by main shop grocery retailer, June 2012
                                                                                                                                • Figure 49: Usage of online shopping among customers of grocers not offering online shopping, June 2012
                                                                                                                            • The Consumer: What do Online Shoppers Want?

                                                                                                                              • Key points
                                                                                                                                • What online shoppers want
                                                                                                                                    • Figure 50: Online grocery shoppers’ interest in services/features, June 2012
                                                                                                                                    • Figure 51: Online grocery shoppers’ interest in services/features, by frequency of shopping online, June 2012
                                                                                                                                    • Figure 52: Online grocery shoppers’ interest in services/features, by main shop grocery retailer, June 2012
                                                                                                                                • The Consumer: Online Shoppers’ Behaviour

                                                                                                                                  • Key points
                                                                                                                                    • Online shoppers’ attitudes and behaviour
                                                                                                                                        • Figure 53: Online grocery shoppers’ behaviours and attitudes, June 2012
                                                                                                                                        • Figure 54: Online grocery shoppers’ behaviours and attitudes, by age/affluence, June 2012
                                                                                                                                        • Figure 55: Online grocery shoppers’ behaviours and attitudes, by main shop grocery retailer, June 2012
                                                                                                                                    • The Consumer: Reasons for Not Shopping Online

                                                                                                                                      • Key points
                                                                                                                                        • Reasons for not shopping online
                                                                                                                                            • Figure 56: Non-online grocery shoppers’ reasons for not shopping for groceries online, June 2012
                                                                                                                                            • Figure 57: Non-online grocery shoppers’ reasons for not shopping for groceries online, by age/affluence, June 2012
                                                                                                                                            • Figure 58: Non-online grocery shoppers’ reasons for not shopping for groceries online, by attitude towards online shopping, June 2012
                                                                                                                                        • The Consumer: What Could Encourage Consumers to Shop Online?

                                                                                                                                          • Key points
                                                                                                                                            • What non-online shoppers would like
                                                                                                                                                • Figure 59: What would encourage non-online grocery shoppers to buy groceries online, June 2012
                                                                                                                                                • Figure 60: Interest expressed in services/features, by online grocery shoppers/non-online grocery shoppers, June 2012
                                                                                                                                                • Figure 61: What would encourage non-online grocery shoppers to buy groceries online, by main shop grocery shop retailer, June 2012
                                                                                                                                            • The Consumer: Target Groups

                                                                                                                                                  • Figure 62: Target groups, by reasons for not shopping for groceries online, June 2012
                                                                                                                                                  • Figure 63: Target groups profiled, by age/affluence, June 2012
                                                                                                                                                  • Figure 64: Target group responses: why they do not shop for groceries online, June 2012
                                                                                                                                              • Appendix – The Consumer: Who is Shopping Online for Groceries?

                                                                                                                                                  • Figure 65: Usage of online shopping, June 2012
                                                                                                                                                  • Figure 66: Most popular usage of online shopping, by demographics, June 2012
                                                                                                                                                  • Figure 67: Next most popular usage of online shopping, by demographics, June 2012
                                                                                                                                              • Appendix – The Consumer: What do Online Shoppers Want?

                                                                                                                                                  • Figure 68: Online grocery shoppers' interest in features and services, June 2012
                                                                                                                                                  • Figure 69: Online grocery shoppers' interest in features and services, by usage of online shopping, June 2012
                                                                                                                                                  • Figure 70: Most popular online grocery shoppers' interest in features and services, by demographics, June 2012
                                                                                                                                                  • Figure 71: Next most popular online grocery shoppers' interest in features and services, by demographics, June 2012
                                                                                                                                              • Appendix – The Consumer: Online Shoppers’ Behaviour

                                                                                                                                                  • Figure 72: Online grocery shoppers' behaviour, June 2012
                                                                                                                                                  • Figure 73: Online grocery shoppers' behaviour, by demographics, June 2012
                                                                                                                                              • Appendix – The Consumer: Reasons for Not Shopping Online

                                                                                                                                                  • Figure 74: Reasons for not shopping for groceries online, June 2012
                                                                                                                                                  • Figure 75: Reasons for not shopping for groceries online, by usage of online shopping, June 2012
                                                                                                                                                  • Figure 76: Most popular reasons for not shopping for groceries online, by demographics, June 2012
                                                                                                                                                  • Figure 77: Next most popular reasons for not shopping for groceries online, by demographics, June 2012
                                                                                                                                              • Appendix – The Consumer: What Could Encourage Consumers to Shop Online?

                                                                                                                                                  • Figure 78: What would encourage non-users to shop for groceries online, June 2012
                                                                                                                                                  • Figure 79: What would encourage non-users to shop for groceries online, by demographics, June 2012
                                                                                                                                              • Appendix – The Consumer: Target Groups

                                                                                                                                                  • Figure 80: Reasons for not shopping for groceries online, by target groups, June 2012
                                                                                                                                                  • Figure 81: Target groups, by demographics, June 2012

                                                                                                                                              Companies Covered

                                                                                                                                              • Amazon.co.uk
                                                                                                                                              • Asda Group Ltd
                                                                                                                                              • Carrefour
                                                                                                                                              • Facebook, Inc.
                                                                                                                                              • J. Sainsbury
                                                                                                                                              • John Lewis Plc (department store)
                                                                                                                                              • Ocado
                                                                                                                                              • Tesco Plc
                                                                                                                                              • Waitrose
                                                                                                                                              • Wal-Mart Stores, Inc
                                                                                                                                              • Wm Morrison Supermarkets
                                                                                                                                              • YouTube, Inc.

                                                                                                                                              Online Grocery Shopping Industry - UK - September 2012

                                                                                                                                              £1,995.00 (Excl.Tax)