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Online grocery shopping set to double by 2016

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UK online grocery sales are set to more than double to £11.2bn in the next five years, while the way we shop will also change dramatically, according to new research.

Food and grocery analysts IGD says the sharp rise from the £5.9bn expected to be spent in 2011 will take the online share of the grocery market to 6% in 2016 from 3.8% this year. IGD unveiled the figures today at its Online Grocery Retailing event, at the British Museum.

Joanne Denney-Finch, chief executive of IGD, said the way we shop would also change dramatically. “A digital explosion is taking place and technology is advancing in leaps and bounds,” she said. “Just in the last twelve months we’ve seen an array of innovations in the online arena and we expect this to continue.”

The analyst quizzed both shoppers and food manufacturers for research presented today. Its IGD ShopperTrack research found that while 17% of UK adults now shop online, 44% intend to do so in the next five to 10 years. It also found that online shopper loyalty was somewhat illusory, with 64% buying from two or more online supermarkets and 47% saying they would like to try another.

The future, it appears, will be multichannel, with more than a third of those quizzed (36%) saying they planned to buy from supermarkets and local stores as well as online, in the next five to 10 years.

Meanwhile IGD last month also interviewed 170 food and grocery manufacturers for its Online Grocery Retailing Outlook survey. It found that 33% of them would consider selling their products direct to consumers online, while 61% said the pace of growth in online grocery retailing would speed up in the next five years. Smartphone applications were expected to have the greatest impact on future shopping.

Denney-Finch said: “Although online grocery retailing only accounts for 3.8% of the total grocery market, it is the fastest growing grocery channel and one which will be used more widely in the future as shoppers become increasingly multichannel. Our research shows us that even those shoppers that don’t currently buy their groceries online (33%) intend to do so in the future.

“As the market is constantly changing, it’s still difficult to predict exactly what online grocery retailing will look like in the next few years. What is exciting, however, is how the digital revolution will evolve and shape our industry in the years to come.”

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