Mintel is predicting that the online grocery market will grow by 33% in 2020 to reach an estimated value of £16.8bn.
The strong rise follows four consecutive years of slowing growth: in 2019 growth fell to a historic low of just 2.9%. The research group now expects the market to be worth £17.9bn by 2024, growing by 41% over the five year period.
Mintel highlighted that there has been a dramatic change in online shopping habits over the coronavirus lockdown period, habits it believes could prove lasting. In the very early days of the outbreak, before social distancing measures were announced, 7% of British consumers 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%.
Nick Carroll, Associate Director of Retail Research at Mintel, commented: “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.
“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.”
NAM Implications:
- At least…
- Suppliers now need to factor in permanent change.
