UK online grocery penetration at 6.9%
Online grocery market penetration in the UK is the third highest globally, behind only South Korea and Japan. The latest statistics from Kantar Worldpanel show the strength of UK grocery eCommerce.
Published: 10:08:00 on the 1st Oct 2016Author: Ben SillitoeSome 6.9% of all grocery shopping in the UK is conducted online, according to the latest research from Kantar Worldpanel, making the nation's eCommerce grocery market penetration the third highest globally.
Only South Korea and Japan – at 16.6% and 7.2% respectively – have more online traction in the grocery space, the report reveals.
Kantar Worldpanel's study, dubbed The Future of E-Commerce in FMCG, found that online growth is not equal around the world and is not explained by connectivity. While digitally developed South Korea is the world's largest online FMCG market by value share, in the US only 1.4% of groceries are bought online.
In addition, China is the market which saw the biggest growth in the last 12 months, 47% – to a value share of 4.2%. Europe has a relatively low adoption of eCommerce in all countries except the UK, although France has 5.3% of grocery sales online and is notable for the popularity of its Drive model which sees internet shopping collected from carparks outside the store.
Overall, eCommerce now accounts for 4.4% of all FMCG sales, but while the online channel is growing, the FMCG market as a whole is flat, increasing by1.6% during the same period.
Stéphane Roger, global shopper & retail director at Kantar Worldpanel, remaked: "FMCG growth is slowing, but our data shows that people are looking for more convenience, which can be met by shopping online.
"Grocery eCommerce, although currently small, with only one in four people shopping online, is growing fast. We forecast it will grow to 9% of the market and be worth $150 billion by 2025. With new entrants such as Amazon expanding rapidly, the industry is facing a shake-up."
Sales of groceries through eCommerce platforms reached $48 billion globally in the 12 months to June 2016, according to Kantar, which also noted that once shoppers have begun shopping online they are more likely to continue doing so.
UK grocer Sainsbury's reported its second quarter trading figures last week, which showed that like-for-like sales were down 1.1% and total sales dropped 0.8%. Convenience and online were significant growth areas for the business, which actually sold more items during the period compared to one year before with the top line clearly being impacted by price deflation and improvement in performance at Tesco and Morrisons.
Last week's figures were the first to be reported since the acquisition of Argos was completed, and John Ibbotson, director of the retail consultancy Retail Vision, had a word of warning for the supermarket chain.
"Argos should boost Sainsbury's bottom line in the short-term as well as improve its internet offer and logistics capability," he said.
"But integrating the two firms will be time-consuming and distracting, and in the current environment Sainsbury's cannot afford to take its eye off its core grocery business, even for a second."
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