While global retail is struggling under a new regime of consumer behaviour, online grocery shopping is booming with the sector set to grow 33% in 2020 to reach an estimated value of £16.8 billion, up from £12.7 billion in 2019.
This rise follows four consecutive years of slowing growth: in 2019 growth fell to a historic low of just 2.9%. The market is set to be worth £17.9 billion by 2024, growing by 41% over the five-year period.
The latest research from Mintel, reveals a dramatic change in online shopping habits over the COVID-19 lockdown period, habits that Mintel believes could prove lasting.
In the very early days of the spread of the coronavirus in the UK, before social distancing measures were announced, 7% of Brits increased the total amount of online shopping – both food and non-food. In the space of fewer than two months, online shopping has seen a dramatic boost with the number of consumers who say they’ve increased their online shopping rising to 36%.
Meanwhile, 50% of UK consumers have tried to limit the time they spend in-store, while a further 9% have increased their use of click-and-collect.
Nick Carroll, Associate Director of Retail Research at Mintel, explains: “Over the course of just a few months, COVID-19 has had a seismic impact on Britain’s grocery sector. The pandemic is giving a significant short-term boost to online grocery services, as shoppers look to avoid stores and limit their contact with the outside world.”
Carroll continues: “However, the impact will last beyond the crisis. Shopper numbers in the online grocery market have plateaued in recent years as retailers struggled to get new customers to try these services. The outbreak is bringing a new audience to online grocery, and this should boost the market long term with strong growth forecast through to 2024. While there is currently a significant disruption to the online grocery market, with some retailers not accepting new customers, this will ease in the short-term as more capacity is brought online.”
Over 65s still face challenges shopping online
The current guidelines, which ask those aged 70 and over to remain at home, mean that older shoppers are more heavily reliant on having groceries and other goods delivered. However, while some older shoppers are experienced in ordering online, they are by far the minority. Fewer than three in 10 (28%) UK internet users aged 65+ were online grocery shoppers prior to the COVID outbreak.
However, Mintel’s latest research shows that 37% of over 65s have increased the amount of online shopping they’ve done since the outbreak began.
While some consumers are going online for their grocery requirements, however, many are relying on the kindness of friends and family – with a quarter (24%) of consumers aged under 44 say they have been helping friends/family and/or neighbours with their shopping.
Carroll adds: “Older generations that had previously shied away from online grocery have, effectively, been forced to change their habits in the face of social distancing measures. While there has been a rise in online grocery shopping among the over 65s, the reality is a significant number of consumers in the older age groups have no experience shopping online for groceries and/or are not digitally native. There is a real need to ensure access to online grocery deliveries for older consumers. We’re seeing some retailers already thinking of easier ways to order goods, including phone orders for next-day delivery.”