In today’s InternetRetailing newsletter the recurring theme is one of grocery services – and the extent to which they have shifted online over the last year. Over the last year, many more people have ordered groceries online. At first they went online in a rush during Covid-19 lockdowns, and many grocers expanded their capacity quickly in order to respond. But the question that now remains is to what extent shoppers will continue to order online as pandemic restrictions and social distancing ease.
Today Sainsbury’s first quarter figures illustrate the extent of that shift online. They show that the supermarket’s online grocery sales grew by 29% this spring and early summer, compared to the same time last year. But they also show ecommerce grocery sales were 142% up on the same in pre-pandemic 2019, a figure that shows the real extent of the change that’s taken place. The retailer seems to be seeing a longer-term shift, since it’s continued to have high levels of demand even as social distancing restrictions eased. The figures how it has been able to expand its service by adding on fast delivery from companies including Uber Eats and Deliveroo.
The growth potential of Ocado’s online grocer business was somewhat constrained during lockdowns because the amount that it could deliver to customers was limited by the capacity of its fulfilment centres. In half-year figures today Ocado shows how it’s adding on new fulfilment centres to grow that capacity fast. It’s also seen customer numbers grow by 22%, partly as a result of that expansion and partly as the demand from each customer eases as hospitality venues open once more.
The fast-growing demand for online groceries that the UK has seen in the last year has helped make its grocers more attractive as acquisition targets. Morrisons, which uses Ocado technology to underpin its own ecommerce website and fulfilment, has now accepted an offer that values it at £6.3bn, while further offers may well be forthcoming. Bidder Fortress Investment Group sees the potential of its online operations, allied to its ability to serve customers through stores that are themselves often used as online fulfilment hubs.
Today we also report as Loop prepares to close down online as it opens up in branches of Tesco. The refillable groceries service is now unusual in trading online rather than in-store, as practiced by competitors including Waitrose and M&S.
Today we also report as luxury leather goods business Mulberry shuts up shop in Paris until international tourism returns, and today’s guest comment comes from Liam Chennells of detected who asks whether marketplaces are oversaturated.