UK Online Grocery Retailing Market Report 2023

Our Report Delivers Key Insights On

• The impact of the cost of living crisis on use and reliance on the online grocery channel.
• Number of consumers shopping online, including demographic breakdown, and how this has shifted over the past three years.
• Products typically purchased as part of an online grocery shop, reasons for shopping online for groceries from users, and barriers to shopping online for groceries from non-users.
• Attitudes to savvy shopping (eg flexible payment terms, loyalty schemes), sustainability and hygiene when shopping online for groceries.
• Use of and attitudes towards alternative online food and drink retailers, such as rapid delivery retailers (eg Getir), food box retailers (HelloFresh) and alcohol specialists (eg Naked Wines).

Current UK Online Grocery Market Landscape

As expected, the market has declined following the extraordinary growth driven by the COVID-19 pandemic and enforced lockdowns. However, even with this decline, the online channel remains far larger than it had been pre-pandemic. The number of consumers moving entirely away from online grocery retail was small, falling from 58% to 55%, highlighting that the sector can be resilient during the cost-of-living crisis.

• Online grocery market share UK: Tesco accounts for a quarter of the market, and almost a third of online grocery shoppers use Tesco most often.
• Online grocery market trends: One in 10 consumers who no longer shop for groceries online said this was because they now shop with a retailer that doesn’t offer an online service, primarily discounters like Aldi or Lidl.

UK Online Grocery Shopping Trends and Opportunities

Convenience the main driver

The leading reasons as to why consumers use online grocery shopping are all convenience-driven, 40% of consumers use it to avoid shopping in-store, and a third find it easily fits into their schedule. Looking longer term, there is a clear opportunity for online grocery retailers to tap into subscription, particularly within frequent but less aspirational product categories such as household cleaning. With convenience a key driver of online grocery use, the ability to ‘automate’ elements of online grocery demand is a clear opportunity particularly when this is tied to value.

Spending tracking underpins value credentials

In the current climate the perception of online grocery as being less value-focused is a major barrier to attracting new consumers. Around a third of consumers believe that they can find better prices or promotions in-store. Nevertheless, a fifth of consumers use online shopping to keep better track of spending, so retailers should draw attention to spending tracking to demonstrate the value of shopping for groceries online.

Leading Brands Covered in this Report

This report covers major grocers’ online sales, online-only grocers’ sales, specialist food and drink retailers’ online sales, and online-based food box and recipe box delivery schemes. The leading players in the sector covered in this report include Tesco, Sainsbury’s, Asda, Ocado, Amazon Fresh, Iceland, Deliveroo, Uber Eats, Just Eat, and HelloFresh.

Additional Features Included with Your Purchase

• Interactive Data Book: This gives you unlimited access to a consumer confidence tracker that is segmented into 25 different demographic categories.
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To learn how to connect with your audience, purchase our full UK Online Grocery Retailing Market Report 2023. Discover lucrative innovation opportunities to help your business grow during times of financial uncertainty.

Expert Insights from a Retail Specialist

This report, written by Nick Carroll, a leading analyst in the retail sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.