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Report
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Our grocery retail analysis shows that online sales returned to real terms growth in 2024. The market is moving into a new phase, where the focus will be on convenience…
The market for online grocery retailing returned to real-terms growth in 2024 for the first time since the pandemic.The sector’s primary barrier to further growth are persistent consumer concerns related to delivery and product quality.
Online Grocery Retail Analysis — Current Landscape
High delivery fees frustrate almost 30% of non-shoppers. The ongoing cost of living crisis also means that value remains a priority for many price-sensitive shoppers.
Personalisation is taking over the UK grocery market, with a significant number of online grocery shoppers say they would use features that use their purchase history to create personalised, automated shopping lists.
One promising opportunity for online grocers lies in adding convenience over making sustainable choices, with over half of existing online grocery shoppers wanting options to sort products by their environmental impact.
Frequently Asked Questions about the UK Online Grocery Retail Market
Several key factors are driving growth in the UK online grocery retail market, including convenience, rapid delivery services, and a growing appetite for personalised digital experiences.
Tesco is the dominant operator in the UK online grocery retail market, followed by Sainsbury’s, which holds the second largest share.
This report is written by Michael Oliver, Senior Retail Analyst. Michael has more than 35 years of experience writing and researching consumer markets, including food and drink, as well as leisure and retail.
Our grocery retail analysis shows that online sales returned to real terms growth in 2024. The market is moving into a new phase, where the focus will be on convenience and flexibility.
Michael Oliver Senior Retail Analyst
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EXECUTIVE SUMMARY
Opportunities for the online grocery retailing market
Leverage tech to simplify the shopping process…
…and become more integrated in shoppers’ lives
Harness the power of localism…
…and bring shopping locally to life
Address ongoing interest in product sustainability…
…as well as delivery sustainability
Market dynamics and outlook
Market size & forecast
Market predictions
Online grocery sales forecast to hit £31.7bn by 2029
Core home delivery remains the biggest portion of the market
Graph 1: estimated distribution of online grocery sales by distribution channel, 2020-24
What consumers want and why
Online grocery shopping is maturing
Graph 2: participation in online grocery shopping, 2023-24
Standard home delivery dominates, but rapid delivery is expanding its appeal
Graph 3: types of delivery methods typically used for online grocery shopping, 2024
Convenience is the main reason for using rapid delivery services
Graph 4: reasons for choosing a rapid delivery service for online grocery shopping, by type of service used, 2024
Preference for in-store shopping is the biggest barrier to online grocery use
Graph 5: reasons for not shopping online for groceries, 2025
Shopper numbers of most leading online grocery retailers falls
Graph 6: leading online grocery retailers shopped with, 2021-25
Shoppers want options
Graph 7: interest in different types of online grocery delivery options, 2024
Personalisation is driving the future of online grocery shopping
Graph 8: attitudes towards online grocery shopping, 2024
Retailer activity
Top four account for more than two-thirds of online grocery sales
Graph 9: leading online grocery retailers’ estimated market share, 2022-24
Rapid delivery options continue to expand
MARKET DYNAMICS
Market size
Online grocery is now worth more than double its pre-pandemic level
Major grocers are the largest channel for online groceries
Graph 12: online sales of store-based grocers (including VAT), by category, 2019-24
Some seasonality in online grocery ordering, but share holds steady
Graph 13: store-based online grocery retail sales as a percentage of total grocery retail sales, 2023-24
Online penetration among major grocers edges up in 2024
Graph 14: store-based online grocery retail sales as a percentage of total grocery retail sales, by sector, 2019-24
Market forecast
Online sales forecast to hit £31.7bn by 2029
Rapid delivery set to drive growth across the market
Online grocery sector will continue to outperform wider grocery market
Graph 15: online grocery sales as a proportion of all grocery sales, 2019-29
Market segmentation
Store-based grocers hold a dominant share of sales…
…but the online-only segment is increasing its share
Graph 16: share of all online grocery retail sales, by type of retail operation, 2019-29
Store-based online grocery sales set to grow by 19%
Online-only sales forecast to rise by 25%
Channels of distribution
Rapid delivery now accounts for 7% of online grocery sales…
…but core home delivery remains the biggest demand driver
Graph 17: estimated distribution of online grocery sales by distribution channel, 2020-24
Market drivers
UK economy continues to be subdued
Graph 18: GDP, 2021-24
Food inflation returns to outstripping headline inflation
Graph 19: CPI inflation rates, 2024-25
Wage growth has outstripped inflation for the past 18 months…
Graph 20: CPI inflation rate and total pay growth rate, 2021-25
…but most consumers perceive the cost-of-living crisis as not getting any better
Graph 21: agreement with the statement ‘The UK cost of living crisis is…’
Polarisation in financial position becomes more entrenched
Graph 22: consumers’ financial situation compared to a year ago, by household income, 2025
Current financial wellbeing stabilises
Graph 23: the financial wellbeing index, 2019-25
Social media presence is crucial to build connections and engage younger shoppers
Tougher restrictions on advertising of HFSS food and drink loom in 2025
Online grocery at the forefront of AI disruption
WHAT CONSUMERS WANT AND WHY
Use of online grocery services
Over half shop online for groceries
Number shopping for groceries online is maturing
Graph 24: participation in online grocery shopping, 2024
Online grocery use is heavily influenced by household income
Graph 25: any use of online grocery services, by household income bracket, 2024
Engagement in the online grocery market tapers off with age
Graph 26: participation in online grocery shopping by age and parental status, 2024
Time-poor parents are the heaviest online shoppers
Delivery methods used
Direct from the retailer is the most frequent delivery type
Blended use of delivery options means retailers should focus on varying consumer needs
Rapid delivery is expanding its appeal…
Graph 27: types of delivery methods typically used for online grocery shopping, 2024
…and recruiting new shoppers to the sector…
Graph 28: usage of delivery methods among those who had started shopping online in the past year, 2024
…through an increasing array of choice
Younger men most likely to use rapid delivery
Standard home delivery remains the norm, but older shoppers over-index
Graph 29: method of delivery of online grocery orders, by age, 2024
Emphasise multi-mission aspects of in-store collection
Motivations for using rapid delivery services
Convenience is king in rapid delivery
Tap into “meal for tonight” scenarios
Squeeze value from premium delivery subscriptions
Motivations vary between retailer-led and third party rapid delivery
Graph 30: reasons for choosing a rapid delivery service for online grocery shopping, by type of service used, 2024
Cross-selling a significant driver and opportunity
An integrated loyalty scheme across formats can increase connection
Barriers to online grocery shopping
Preference for in-store shopping is the biggest barrier to shopping online for groceries
Graph 31: reasons for not shopping online for groceries, 2025
Try to win over doubters through free trials and incentives
Graph 32: reasons for not shopping online for groceries, by use of online shopping, 2025
Nudge delivery charge objectors towards click-and-collect options
Address perceptions among younger shoppers that online prices are higher
Graph 33: agreement with statement “The price of products is higher online”, by age, 2025
Provide more options when it comes to delivery slots
Leading retailers shopped with
Tesco is the most popular online grocery retailer
Graph 34: online grocery retailers typically shopped with, 2025
Penetration of most leading online grocery retailers falls
Graph 35: leading online grocery retailers typically shopped with, 2021-24
Morrisons sees growth from Gen Zs and Millennials
Graph 36: online grocery shoppers using Morrisons, by generation, 2024
Online grocery retailing is becoming increasingly differentiated
Co-op has the youngest shoppers after Aldi withdrawal
Graph 37: leading online grocers, customer profile by age and household income, 2025
Online grocery shoppers use a range of brands
More than half shop with two or more online grocery retailers
Graph 38: repertoire of online grocery retailers typically used, 2022-25
Three brands over-index among rapid delivery shoppers
Graph 39: where people shop for online groceries, by how they receive their order, 2024
Alternative retailers used
A fifth use foodbox services
HelloFresh powers ahead
Graph 40: food/recipe/subscription services used in the last 12 months, 2022-24
Presence of children is a major driver for meal kits/subscription boxes…
Graph 41: leading meal kit brands bought in the last 12 months, by presence of children in the household, 2025
…while affluence is also significant
Graph 42: leading meal kit brands bought in the last 12 months, by annual household income, 2025
Online alcoholic drinks specialists continue to grow their appeal
Graph 43: alcoholic drink specialists shopped with online in the last 12 months, 2022-25
Younger Gen Zs and Millennials top purchasers from online alcohol specialists
Graph 44: purchasing from leading online alcoholic drinks specialists in the last 12 months, by generation, 2025
Uber Eats achieves high penetration for third party rapid delivery services
Graph 45: third party rapid/ultrafast delivery providers used for grocery shopping in the last 12 months, 2025
Tesco leads retailer rapid grocery delivery
Graph 46: retailer rapid/ultrafast delivery providers used for grocery shopping in the last 12 months, 2025
Interest in delivery options
Shoppers want options in how they receive orders
Graph 47: interest in different types of online grocery delivery options, 2024
Move on from speed to flexibility
Autonomous delivery could revolutionise last-mile logistics
Smart lockers at home could appeal to tech-savvy shoppers and families
Lockers in high traffic areas could appeal to busy, urban consumers
Attitudes towards online grocery shopping
Personalisation will drive the future of online grocery shopping
Graph 48: agreement to “I would like to use a feature that uses my purchase history to automatically add favourite groceries to my basket”, by generation and household income, 2024
Go beyond “favourites” and “suggested shops”
Agentic AI could fundamentally change the online grocery shopping experience
Integrate with smart home appliances
Attract future shoppers through social media integration
Seamlessly connect with shoppable content
Graph 49: agreement to “I would use a feature that could add groceries from recipes on social media to my online shopping basket”, by age, 2024
Sustainability issues returning to the fore for more wealthy shoppers
Graph 50: attitudes to sustainability related issues when shopping online for groceries, 2024
AI can enable sustainable choices
Cut through the noise to make eco-shopping easy
Target busy professionals and families with subscriptions
Emphasise the convenience of automated deliveries
Graph 51: agreement to “I would like supermarkets to offer subscriptions for individual products”, by age of children within the household, 2024
Digitally integrated lives can simplify grocery shopping
Graph 52: attitudes to “I would like to use an online delivery calendar sync feature that made personalised recommendations according to my diary”, by age and household income, 2024
A demand for local produce
Local produce can attract younger, wealthier shoppers
Graph 53: agreement to “A wider range of products from local suppliers would make me shop online for groceries more often”, by age, 2024
Technology can help connect shoppers and local suppliers, but communication is key
RETAILER ACTIVITY
Key metrics and market share
Leading retailers: a note on revenue
Tesco consolidates its leadership of online grocery
Top four account for more than two-thirds of online grocery sales
Graph 54: leading online grocery retailers’ estimated market share, 2022-24
Tesco sees strong online grocery growth
Sainsbury’s growth ahead of market but slower than Tesco
Asda slips to third position
Ocado is the fastest-growing online grocery player
Leading retailers: revenue
Deliveroo sees strong growth from grocery
Just Eat and Uber Eats are providing stiff competition for Deliveroo
Other rapid delivery operators seek to fill the void left by Getir’s departure
Zoom by Ocado is the outlier in rapid delivery market
Graph 55: selected rapid delivery online grocery retailers, growth in spend and customer numbers in past 12 months within Snoop SpendMapper cohort, 2025
HelloFresh growth continues as it refocuses
Other smaller players dig in, hopeful of an upturn
Alcohol specialists see return to growth
Specialists online food and drink retailers: revenues
Launch activity and innovation
Co-op’s Peckish seeks to help smaller independents and co-operatives
Rapid delivery providers broaden their ranges
Gopuff introduces group ordering feature
Retailers continue to forge partnerships with rapid food delivery services
24/7 online grocery delivery expands across the UK
Lidl ventures into social commerce
Crowdsourced grocery marketplace launches
Ocado trials online reusable packaging scheme
Deliveroo partners with Sainsburys with “Decanteroo” for Valentine’s Day
Advertising and marketing activity
Marketing spend still significantly ahead of pre-pandemic levels
Grocers ramp up promotion of online services
Graph 56: online supermarket/grocery/food retailers and delivery partners’ total above-the line, online display, direct mail and social media advertising expenditure, 2020-24
Deliveroo invests in promotion
Graph 57: selected leading online supermarket/grocery/food retailers and delivery partners’ total recorded above-the line, online display, direct mail and social media advertising expenditure, 2023-24
Social media takes largest share of adspend
Graph 58: online supermarket/grocery/food retailers and delivery partners’ total recorded above-the-line, online display, direct mail and social media advertising expenditure, by media type, 2023-24
Tesco Whoosh ad focus on consumers who have more exciting things to do than their grocery shopping
Tesco outdoor advertising also focuses on Whoosh
Ocado promotes Zoom and continues recruitment drive
“Value Worth Talking About”
Asda highlights coverage and affordability
APPENDIX
Supplementary data – advertising and marketing activity
Deliveroo has consistently been the biggest spender on advertising
Market forecast data and methodology
Forecast methodology
Market size and forecast – total online grocery retail sales
Market forecast prediction intervals – total online grocery retail sales
Market size and forecast – store-based online grocery retail sales
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