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UK Food and Grocery - Pandemic e-commerce after effect
NATIONAL
Two years ago today, Boris Johnson plunged the UK into lockdown. With non-essential shops shuttered, the supermarket became the only place consumers could shop and the grocery sector’s vital role of keeping the nation fed was brought into sharp focus.
But after those first few weeks of product shortages of everything from toilet paper to self-raising flour, a new normal of grocery shopping emerged.
One of the biggest trends of the pandemic has been the significant rise of online shopping.
This is true across all of retail, including grocery. Ecommerce accounted for 8.7% of all grocery sales before the pandemic hit in February 2020, by February last year it peaked at 15.4%, according to Kantar Worldpanel data.
However, online sales are starting to fall as shoppers move beyond COVID-19.
Ecommerce grocery sales were down almost 20% in the latest Kantar figures for the 12 weeks to 20 February. 13.3% of all grocery sales, online is still notably ahead of pre-pandemic levels. Asda Senior Vice President of Ecommerce, Simon Gregg, believes the online market will remain strong:
“Critically, the online grocery market has still doubled in size versus prepandemic levels.” Gregg says that although Asda’s growth levels have stabilised since the peak of the first lockdown, where growth exceeded 100%, “we continue to see consistent numbers of weekly shoppers at levels more than double those seen in early 2020.”
IGD’s Senior UK Retail Analyst, Patrick Mitchell-Fox, does not expect online grocery shopping to quite hit the peaks experienced at the height of COVID-19 lockdown periods, however, he believes it will remain notably higher than prepandemic levels.
Meanwhile, Mintel forecasts that the online grocery market will be worth £22.4 billion by 2025, a £4.9 billion increase over pre-pandemic forecasts.
Speedy deliveries have taken off in a big way with people now expecting to receive grocery orders in minutes rather than day. To handle the surge of orders, supermarkets have had to make drastic changes, such as dedicating sections of their carparks for order pickup, converting some stores to fulfill online orders and partnering with speedy fulfilment experts from Deliveroo to Just Eat.
Gregg believes this trend will continue as normality resumes. “The pandemic has changed the way that people shop. As lives become busy again, we continue to see customers selecting rapid delivery for top-up shops and essentials,” he says. Asda is looking to cater for the growing audience shopping for grocery ondemand and is seeking ways to give customers even more choose.
It is expanding the number of locations where it offers grocery on Uber Eats and Just Eat, which Gregg says accounts for “a significant percentage of online grocery sales”.
The grocer is also rolling out its own Express online delivery service, where shoppers can receive their orders made from Asda’s full online range in as little as an hour beyond the 149 stores it currently offers the service in.
