New research from Kantar has found that e-commerce is outperforming all other grocery retail channels in terms of growth, and could double in size by the middle part of the next decade.
Kantar's Winning Omnichannel – Finding growth in reinvented retail report found that the market share of global e-commerce stood at 5.1% last year, compared to 4.3% in 2017; growth of 20.3% year-on-year.
Kantar's report estimates that the e-commerce sector could account for 10.1% of the market by 2025.
Channel Performance
Hypermarkets and supermarkets account for the biggest share of the grocery retail sector, at 55.8% in 2018, however this is down from 56.9% of the market in 2017. Hypers and supers could see their share drop to less than half of the market (48.0%) by 2025, according to the report.
Discounters, meanwhile, continue to make progress, standing at 10.6% share last year, up from 10.3% in 2017, with the sector likely to account for 13.4% of the overall market by 2025.
Convenience, too is likely to see marginal growth, to 4.4% by 2025, up from 41.% in 2018, while cash and carry is poised to grow to 5.1% of the market by 2025, up from 3.4% currently.
The traditional trade – namely mom and pop-style stores and independent operators – will see their share dip marginally, to 8.3%, by 2025, down from 8.4% in 2018.
'The fragmentation of the FMCG landscape continues apace,' Kantar said in a statement. 'Across the channels we’ve analysed, there is an obvious divide between those doing well and those struggling to keep up. E-commerce is far outstripping any other medium—achieving 20.3% growth in 2018, accelerating on its 15% growth in 2017.'
Overall Market
Overall retail sales grew by 2.1% last year, with the Africa & Middle East region seeing the strongest growth in 2018 (+6.1% compared to the previous year). Latin America posted 3.9% growth, while Asia grew by 2.8% and the US by 1.6%.
European markets grew by less than the market average, however, with Western Europe seeing growth of 1.7% and Eastern Europe growing by 1.2%.
'In 2018, 96% of FMCG growth took place outside hyper and supermarkets, e-commerce grew 20%, discounters have been appearing almost everywhere, and new hybrid retail formats are becoming more common place around the globe,' said Kantar.
'While GDP growth has been stable in recent years, growing on average +3.5% per year, FMCG growth has been slowing—from +6% to +2.1% since 2012. [...] But the data alone does not always tell the whole story. In fact, 2018 saw a continued slowdown in every market we’ve analysed—other than China Mainland and the US.'
The full report can be found here.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
