Consumers are continuing to shop online, with sales of groceries in the UK hitting £12.3 billion last year, and expected to reach £13.6 billion this year, according to the latest research from Mintel.
The organisation reports that the online grocery sector is still adding to its share of total grocery retail sales, up from 6.1% in 2016 to 7% in 2018.
Online shopping is also set to continue expanding this year, with sales expected to reach £13.6 billion.
Over the next five years, online grocery is forecast to account for 10% of all grocery shopping, with sales estimates suggesting potential growth of 60% to reach £19.8 million in 2023.
But, while 45% of British consumers shop electronically, it seems that retailers are struggling to specifically entice new shoppers to online grocery retailing.
According to Mintel, younger consumers are enthusiastic about the convenience of having groceries delivered, particularly those aged 25-34, with 61% of this group doing some online grocery shopping, and over a quarter (27%) saying they do all or most of their grocery shopping online.
However, it seems that middle aged and older shoppers are more reluctant to join the online shopping revolution.
Whilst just over a third (35%) of those aged 45+ report buying some groceries online, the number of Brits in this group who have “never bought groceries online and have no interest in doing so” has grown from 34% in 2015 to 42% in 2018.
Fastest growing sector
Nick Carroll, associate director of Retail Research at Mintel, said: “Online grocery is, alongside the food discounters, one of the fastest-growing segments within the wider grocery sector.
“However, growth is slowing, and the number of users is plateauing as retailers struggle to encourage new customers to try their services.
Nick Carroll, associate director of Retail Research at Mintel.
“Many consumers remain reluctant to buy fresh products online, concerns around substitutions persist and delivery charges are still off-putting, particularly in a market where value is key.
“However, most importantly, online services are still best suited to the traditional big-basket weekly shop, at a time when consumers are increasingly shopping on a top-up or when-needed basis.”
The research also shows the most common reason why consumers do not shop online is that they prefer to choose fresh products themselves (73%).
According to Mintel, there are also concerns about high delivery charges (24%) and minimum spend (18%) and the latest research reveals that almost two thirds (63%) of online shoppers say they have experienced an issue with their order in the past year.
Top of the complaints are missing products, with just over a quarter (26%) of online grocery shoppers experiencing this frustration. This particular issue is closely followed by incorrect product substitutions (25%) and out of date/short shelf life items (24%).
Nick Carroll concludes: “The fact that nearly two thirds of online shoppers have experienced problems with orders in the past year should be worrying for the sector.
“This is playing dice with customers given the level of promiscuity in-store and, despite the thin margins, how relatively loyal online shoppers can be to a business.”
