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UK retailers to see additional £20 billion of home deliveries by 2025

UK retailers to see additional £20 billion of home deliveries by 2025

UK retailers are set to witness an additional £19.6 billion of online home deliveries by 2025, according to new research from Metapack and Retail Economics.
Online is expected to account for half (49.7%) of total non-food sales by 2025 and 27.3% of UK consumers expect to permanently shop online more.

These shoppers and their changed behaviours are expected to support an additional £22.4 billion in online sales compared to a scenario where the pandemic had no impact on shopping behaviours.

This acceleration online is projected to lead to £19.6 billion of additional sales going through home deliveries alone by 2025, compared to a scenario where the pandemic had no impact, according to the report.

The research predicts that apparel, homewares and health and beauty will experience a greater permanent shift online, brought about by online discovery since the pandemic. Meanwhile, over a third (35.8%) of UK consumers expect to visit physical stores less in the future, ahead of those expecting to cut back in the US (28.7%), Germany (20.8%) and France (17.2%).

A quarter (24.8%) of UK consumers work from home more since the pandemic, of which half (50.6%) expect to shop more online permanently compared to around a quarter (27.1%) of those whose place of work has not been impacted from the pandemic. By 2025, UK home workers expect their proportion of online orders delivered to their home to rise by 11.5%, compared to an average of 7.5% among those that haven’t faced change in their work.

Duncan Licence, VP of global product at Metapack says: “Driven by the pandemic, online consumer shopping expectations have changed significantly over the last few years, and a lot of these changes are here to stay.”

Richard Lim, chief executive of Retail Economics says: “A permanent shift in consumer behaviour and vast investment across the ecommerce ecosystem has accelerated the shift to online. Structural changes in the labour market, with persistently higher levels of home working across households, has unlocked greater demand for home deliveries. Although the demand for speed will put pressure on supply chains, home workers have both a greater ability and greater willingness to pay for delivery and returns compared to average online shoppers, which is critical for profitability amid rising costs and elevated customer expectations.”

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