Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

UK Online Grocery Retailing market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Online Grocery Retailing market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

This report includes both market and consumer data around the retailing of grocery products online. Our market size for online grocery includes:

  • Major grocers’ online sales of food and drink and other grocery products
  • Online-only grocers’ sales (eg Ocado)
  • Specialist food and drink retailers’ online sales
  • Online-based food box and recipe box delivery schemes

Excluded:Foodservice delivery & Home delivery of groceries not ordered online.

Expert analysis from a specialist in the field

Written by Nick Carroll, a leading analyst in the Retail sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Online grocery is still one of the fastest-growing channels of the grocery retail sector, but growth slowed for the third consecutive year in 2018. The number of users is plateauing as retailers struggle to engage new customers onto services that are still predominantly targeting big-basket shops in a period where more frequent and fluid shopping behaviour has entered the market Nick Carroll
Associate Director - Retail

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Online growth slows in the second half of 2018….
              • Figure 1: Annual % change in the retail sales of food, by all food sales and online grocery sales, January 2017-January 2019
            • …meaning the market recorded its third successive year of slowing growth
              • Figure 2: Total online grocery market size (including VAT), 2013-23
            • Online grocery sales claim their greatest share of sales in November
              • Figure 3: Online grocery sales as a % of all food stores retail sales, January 2016-January 2019
            • UK facing an ageing population and declining household, throwing up challenges for the sector
              • Figure 4: Population projections, by age, 2013-23
            • Companies and brands
              • Tesco the dominant player
                • Figure 5: Leading online grocery retailers’ estimated market shares (excluding VAT), 2018
              • From same-day to in-home delivery, the online grocery sector continues to be a hotbed of innovation
                • Figure 6: Waitrose While You’re Away, October 2018
              • Of the grocers the Tesco brand is in good shape, but Amazon’s brand trumps all
                • Figure 7: Attitudes towards and usage of selected brands, September 2018
              • The consumer
                • Just under half do some online grocery shopping
                  • Figure 8: Use of online grocery services, December 2018
                • Overall PC/laptops still the devices of choice for compiling orders
                  • Figure 9: Devices used to shop online for groceries, December 2018
                • Nearly two thirds of users experienced an issue with an order in the past year…
                  • Figure 10: Issues experienced with online grocery orders in the past year, December 2018
                • …with the most popular way to resolve an issue being to get on the phone
                  • Figure 11: How customers resolved issues experienced with online grocery orders, December 2018
                • Tesco by far the most popular online grocery retailer
                  • Figure 12: Retailers used to shop online for groceries in the past year, December 2018
                • A quarter would not be willing to pay for same-day delivery
                  • Figure 13: Amount online grocery shoppers would be willing to pay for same-day delivery, December 2018
                • Much interest in a ‘unified’ app-based shopping experience
                  • Figure 14: Attitudes towards shopping online for groceries, December 2018
                • Hesitancy towards buying fresh online still the biggest turn-off
                  • Figure 15: Why they stopped shopping/have never shopped online for groceries, December 2018
                • What we think
                • Issues and Insights

                  • Same-day, tops-ups, sandwiches: What is the next driver of growth for the market?
                    • The facts
                      • The implications
                        • Fire, break-up and new love: Ocado’s eventful start to 2019
                          • The facts
                            • The implications
                            • The Market – What You Need to Know

                              • Online growth slows in the second half of 2018…
                                • …meaning the market recorded its third successive year of slowing growth
                                  • Online grocery sales claim their greatest share of sales in November
                                    • UK facing an ageing population and declining household, throwing up challenges for the sector
                                    • Market Drivers

                                      • Rate of online grocery sales growth slower in 2018
                                        • Figure 16: Annual % change in the retail sales of food, by all food sales and online grocery sales, January 2017-January 2019
                                      • Online grocery store sales as a percentage of all food stores retail sales in 2018 same as 2017
                                        • Figure 17: Online grocery sales as a % of all food stores retail sales, January 2016-January 2019
                                      • Average weekly retail sales highest in December
                                        • Figure 18: Average weekly retail sales of all online grocery retailers, January 2016-January 2019
                                      • Food prices down year on year in 2018
                                        • Figure 19: Annual % change in the price of food and non-alcoholic beverages and alcoholic beverages and tobacco prices, January 2017-January 2019
                                      • End-of-year increase in some food prices
                                        • Figure 20: Annual % change in the price of core food categories, January 2018-January 2019
                                      • Broadband internet connection near universal
                                        • Figure 21: Devices used to access the internet in the last three months, 2016 and 2018
                                      • Core online grocery user demographic forecast to decline
                                        • Figure 22: Population projections, by age, 2013-23
                                      • Households downsizing could shrink size and value of online basket orders
                                        • Figure 23: UK households, by size, 2013-23
                                    • Market Size and Forecast

                                      • Growth slows for the third consecutive year
                                        • Figure 24: Total online grocery market size (including VAT), 2013-23
                                        • Figure 25: Total online grocery market size (including VAT), at current and constant prices, 2013-23
                                      • A small channel, but one that is gaining share
                                        • Figure 26: Online grocery sales as a % of all grocery retail sales, 2013-23
                                      • Store-based players dominate the market…
                                        • Figure 27: Share of total online grocery market, by type of online grocery operation, 2013-18
                                      • …but store-based sales are slowing
                                        • Figure 28: Online grocery sales by store-based grocery retailers (including VAT), 2013-23
                                        • Figure 29: Online grocery sales by store-based grocery retailers (including VAT), at current and constant prices, 2013-23
                                      • Ocado continues to be the driver for the pureplay market
                                        • Figure 30: Online grocery sales by online-only retailers (including VAT), 2013-23
                                        • Figure 31: Online grocery sales by online-only retailers (including VAT), at current and constant prices, 2013-23
                                      • Forecast methodology
                                      • The Consumer – What You Need to Know

                                        • Just under half do some online grocery shopping
                                          • Those aged 25-34 are key users
                                            • Overall laptop/desktops still the devices of choice for compiling orders
                                              • Nearly two thirds of users experienced an issue with an order in the past year
                                                • Tesco by far the most popular online grocery retailer
                                                  • A quarter would not be willing to pay for same-day delivery
                                                    • Much interest in a ‘unified’ app-based shopping experience
                                                      • Hesitancy towards buying fresh online still the biggest turn-off
                                                      • Online Grocery Use and Delivery Pass Ownership

                                                        • Just under half are online grocery shoppers…
                                                          • Figure 32: Use of online grocery services, December 2018
                                                        • …although less than one in 10 do all of their grocery shopping online
                                                          • Figure 33: Online grocery usage, 2015-18
                                                        • A quarter (24%) have a delivery pass
                                                            • Figure 34: Ownership of online grocery passes, December 2018
                                                        • Demographics of Online Grocery Shoppers

                                                          • Those aged 25-34 most likely to shop online
                                                            • Figure 35: Online grocery use, by age, December 2018
                                                          • Usage peaks among younger consumers of both sexes
                                                            • Figure 36: Use and interest in online grocery of non-users, by age and gender, December 2018
                                                          • Those with children in the household more likely to shop online for groceries
                                                            • Figure 37: Online grocery usage, by parental status, December 2018
                                                          • Convenience comes at a price
                                                            • Figure 38: Online grocery usage, by socio-economic group, December 2018
                                                          • Online grocery usage peaks in urban areas
                                                              • Figure 39: Online grocery usage, by type of location lived in and area lived in, December 2018
                                                          • Devices Used to Shop Online for Groceries

                                                            • Most use a laptop/desktop to complete online grocery orders
                                                              • Figure 40: Devices used to shop online for groceries, December 2018
                                                            • Younger online grocery shoppers more likely to shop via mobile
                                                              • Figure 41: Devices used to shop online for groceries, by age, December 2018
                                                            • Device users more likely to use the mobile site
                                                                • Figure 42: How smartphone/tablet users shop for groceries online, by age, December 2018
                                                            • Issues Experienced with Online Grocery Orders

                                                              • Nearly two thirds (63%) have experienced an issue with an online grocery order
                                                                • Figure 43: Issues experienced with online grocery orders in the past year, December 2018
                                                              • Just under a quarter (22%) have experienced more than three problems
                                                                • Figure 44: Repertoire of issues experienced in the past 12 months when ordering groceries online, December 2018
                                                              • Frequent users experience more issues
                                                                  • Figure 45: Issues experienced with online grocery orders in the past year, by level of online grocery usage, December 2018
                                                                • Most call to resolve issues
                                                                    • Figure 46: How customers resolved issues experienced with online grocery orders, December 2018
                                                                  • Younger consumers more likely to complain via modern means
                                                                    • Figure 47: How customers resolved issues experienced with online grocery orders, by age, December 2018
                                                                • Retailers Shopped With

                                                                  • Tesco the most popular retailer to shop with online
                                                                    • Figure 48: Retailers used to shop online for groceries in the past year, December 2018
                                                                  • Asda appealing to the younger and less affluent
                                                                      • Figure 49: Online grocery retailers used in the past 12 months, by age and socio-economic group, December 2018
                                                                    • Most shopped with at least two retailers online in the past year
                                                                      • Figure 50: Repertoire of online grocery retailers shopped with in the past 12 months, December 2018
                                                                    • Tesco also the most popular grocery retailer overall
                                                                      • Figure 51: Retailers used to shop in-store for groceries in the past 12 months, December 2018
                                                                      • Figure 52: Retailers used to shop in-store for groceries in the past 12 months, by where online grocery shoppers shop for groceries online, December 2018
                                                                  • Same-Day Delivery

                                                                    • The market edges towards same-day delivery
                                                                        • Figure 53: Select metrics of same-day delivery services within the UK, February 2019
                                                                      • Most would only be willing to pay £1-£4.99 for same-day delivery
                                                                        • Figure 54: Amount online grocery shoppers would be willing to pay for same-day delivery, December 2018
                                                                      • Younger customers far more willing to pay for same-day delivery
                                                                        • Figure 55: Amount online grocery shoppers would be willing to pay for same-day delivery, by age, December 2018
                                                                        • Figure 56: Amount online grocery shoppers would be willing to pay for same-day delivery, by parental status, December 2018
                                                                      • Most plan, but most also think getting fresh as quickly as possible is important
                                                                          • Figure 57: Attitudes towards planning and delivery of fresh products, December 2018
                                                                      • Attitudes towards Mobile Apps and Voice

                                                                        • Demand is there for a one-stop app
                                                                            • Figure 58: Attitudes towards online grocery shopping, December 2018
                                                                          • Younger consumers far more in favour of app integration
                                                                            • Figure 59: Agreement with attitudes towards online grocery shopping, by age, December 2018
                                                                          • More interest around using voice for assistance than for ordering
                                                                              • Figure 60: Attitudes towards voice and online grocery, December 2018
                                                                          • Why They Don’t Shop Online for Groceries

                                                                            • Fresh still the main concern from those who don’t shop online for groceries
                                                                                • Figure 61: Why they stopped shopping/have never shopped online for groceries, December 2018
                                                                              • Younger consumers less put off by ordering fresh online
                                                                                • Figure 62: Why they stopped shopping/have never shopped online for groceries, by age, December 2018
                                                                              • Fresh is a key concern for those who have never shopped online for groceries
                                                                                • Figure 63: Reasons for not shopping online for groceries, by previous experience of or interest in using online groceries services, December 2018
                                                                            • Leading Retailers – What You Need to Know

                                                                              • Tesco the dominant player
                                                                                • From same-day to in-home delivery, the online grocery sector continues to be a hotbed of innovation
                                                                                  • Ocado the biggest spender in 2018
                                                                                    • Of the grocers the Tesco brand is in good shape, but Amazon’s brand trumps all
                                                                                    • Leading Retailers and Market Share

                                                                                      • Market shares: Tesco still dominant, but has lost share
                                                                                        • Figure 64: Leading online grocery retailers’ estimated market shares (excluding VAT), 2018
                                                                                        • Figure 65: Leading online grocery retailers’ estimated market shares (excluding VAT), 2016-18
                                                                                      • Leading players: revenues
                                                                                          • Figure 66: Leading retailers’ net online grocery revenues, 2016-18
                                                                                        • Leading players: revenue breakdown
                                                                                          • Figure 67: Leading online grocery retailers’ estimated total online revenues, by grocery and non-grocery, 2016-18
                                                                                        • Smaller players
                                                                                          • Figure 68: Smaller players, estimated market shares, 2016-18
                                                                                          • Figure 69: Smaller online grocery players’ turnover, 2016-18
                                                                                      • Competitive Strategies – Key Metrics

                                                                                        • Coverage and fulfilment
                                                                                          • Figure 70: Selected leading online grocers’ coverage and fulfilment centres, 2018
                                                                                        • Home delivery metrics
                                                                                          • Figure 71: Selected leading online grocers’ delivery metrics, March 2019
                                                                                        • Delivery passes
                                                                                          • Figure 72: Selected leading online grocers’ delivery pass details, March 2019
                                                                                        • Click-and-collect
                                                                                          • Figure 73: Selected leading online grocers’ click-and-collect details, March 2019
                                                                                      • Advertising and Marketing Activity

                                                                                        • Total sector advertising spend up 11.7% year on year in 2018
                                                                                          • Figure 74: UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, 2014-18
                                                                                        • Ocado is the sector’s highest advertising spender
                                                                                          • Figure 75: Leading UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, 2014-18
                                                                                        • Majority of advertising spend channelled through door drops
                                                                                          • Figure 76: UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, by media type, 2014-18
                                                                                        • Only half of the leading advertisers favour door drops
                                                                                          • Figure 77: UK online supermarket/grocer/food retailers’ total recorded above-the-line, online display and direct mail advertising expenditure, by media type, 2018
                                                                                        • Nielsen Ad Intel coverage
                                                                                        • Launch Activity and Innovation

                                                                                          • I want it now: grocers across Europe embrace same-day delivery
                                                                                            • Figure 78: Supermercato24, March 2019
                                                                                            • Figure 79: Buymie Ireland and Lidl, March 2019
                                                                                          • Alexa, clean up in aisle four: retailers increasingly embrace voice commerce
                                                                                            • Mini-supermarkets on wheels
                                                                                              • Figure 80: Stop & Shop driverless vehicle, January 2019
                                                                                            • Unattended in-home grocery delivery services
                                                                                              • Figure 81: Waitrose While You’re Away, October 2018
                                                                                            • Expanded pick-up points
                                                                                              • Amazon France launches La boutique des Producteurs
                                                                                                • Developing foodservice offering
                                                                                                  • Bol.com takes another leap into grocery deliveries
                                                                                                  • Brand Research

                                                                                                      • What you need to know
                                                                                                        • Brand map
                                                                                                          • Figure 82: Attitudes towards and usage of selected brands, September 2018
                                                                                                        • Key brand metrics
                                                                                                          • Figure 83: Key metrics for selected brands, September 2018
                                                                                                        • Brand attitudes: Amazon provides the best online service
                                                                                                          • Figure 84: Attitudes, by brand, September 2018
                                                                                                        • Brand personality: Store-based retailers generally perceived as the most accessible
                                                                                                          • Figure 85: Brand personality – macro image, September 2018
                                                                                                        • Tesco seen as reliable
                                                                                                          • Figure 86: Brand personality – micro image, September 2018
                                                                                                        • Brand analysis
                                                                                                          • Amazon innovative, trusted and highly recommended by those who use it
                                                                                                            • Figure 87: User profile of Amazon, September 2018
                                                                                                          • Tesco reliable and accessible
                                                                                                            • Figure 88: User profile of Tesco, September 2018
                                                                                                          • Sainsbury’s trustworthy and ethical, but lacks cutting edge
                                                                                                            • Figure 89: User profile of Sainsbury’s, September 2018
                                                                                                          • Asda offers good value
                                                                                                            • Figure 90: User profile of Asda, September 2018
                                                                                                          • Morrisons lacks innovativeness and authoritativeness
                                                                                                            • Figure 91: User profile of Morrisons, September 2018
                                                                                                          • Iceland basic, but offers good value for money
                                                                                                            • Figure 92: User profile of Iceland, September 2018
                                                                                                          • Waitrose expensive and exclusive
                                                                                                            • Figure 93: User profile of Waitrose, September 2018
                                                                                                          • Ocado lowest brand awareness, lowest lifetime usage and lowest brand recommendation
                                                                                                            • Figure 94: User profile of Ocado, September 2018
                                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                          • Data sources
                                                                                                            • Financial definitions
                                                                                                              • VAT
                                                                                                                • Abbreviations
                                                                                                                  • Consumer research methodology
                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                    • Forecast methodology