UK Online Grocery Retailing Market Report 2025
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There is a growing appetite for tailored digital experiences that simplify shopping and enhance convenience, particularly among younger, affluent, tech-savvy shoppers. Personalisation is emerging as a significant, yet underutilised, opportunity to build customer loyalty in a fragmented and competitive market.
Online Grocery Retail Analysis — Current Landscape
The sector’s primary barrier to further growth are persistent consumer concerns related to delivery and product quality. High delivery fees frustrate almost 30% of non-shoppers, while 24% worry about unsuitable product substitutions. The ongoing cost of living crisis also means that value remains a priority for many price-sensitive shoppers.
One promising opportunity in the online UK grocery market 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. This paves the way for further innovation through sustainable practices, such as partnering with local suppliers, deploying electric delivery vehicles, and introducing subscription services for eco-friendly products.
UK Grocery Market Statistics
- Personalisation is Taking Over the UK Grocery Market: A significant 60% of online grocery shoppers say they would use features that use their purchase history to create personalised, automated shopping lists.
- Online Grocery Market Share UK: The top 4 grocery sellers in the UK account for more than two-thirds of online grocery sales.
Online Grocery Retail Analysis — What’s Inside?
Key Topics Analysed in this Report
- The current UK online grocery market size and a five-year forecast, including spending trends.
- The current status of household finances, and how this will impact online grocery spending and shopping behaviour in the next year.
- The growing trend of personalisation when buying groceries online.
- Purchase barriers to the UK grocery market online, including high delivery fees.
- Importance of sustainability and local produce.
- The role of technology in enhancing the online grocery shopping experience.
Meet the Expert Behind the Analysis
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
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MARKET DYNAMICS
- Market size
- Online grocery is now worth more than double its pre-pandemic level
- Online grocery market returns to real-term growth
- Lower 2024 growth rates reflect strong inflation-driven 2023 comparatives
- Graph 10: year-on-year change in store-based online grocery retail sales, by month, 2023-24
- Online sales of store-based food retailers have fallen back in real terms
- Graph 11: online sales of store-based grocery retailers (including VAT)*, 2019-24
- 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
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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
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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
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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
- Market forecast prediction intervals – store-based online grocery retail sales
- Market size and forecast – online-only online grocery retail sales
- Market forecast prediction intervals – online-only online grocery retail sales
- Report scope and definitions
- Market definition
- Data sources
- Abbreviations and terms
- Consumer research methodology
- Nielsen Ad Intel coverage
- Snoop SpendMapper methodology
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