Online grocery and FMCG sales have risen by 7.6% in the UK since last year, however, this is stalling somewhat as the market matures, according to Kantar Worldpanel.
The research firm’s Future of E-Commerce in FMCG Global Study found that online grocery sales stand at 7.5% of the market, which is the highest level in Europe. The growth rate of 7.6% in the UK market is down slightly from the 9.8% growth of the previous year.
Globally, online purchases account for 4.6% of all FMCG sales worldwide, seeing a growth rate of 30% year on year.
“The UK is well ahead of its European counterparts in e-commerce, but the levels of growth we’ve seen in recent years won’t necessarily be sustainable,” commented Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel. “Saying that, online sales have been an important source of growth at a time when bricks-and-mortar grocery sales have fallen by 1.0%.”
Other Markets
In other European markets, online grocery sales are more subdued, the data shows. In France, online grocery accounts for 5.6% of the market, but it is just 1.8% in Spain and 0.9% in Portugal. South Korea boasts the highest level of online grocery shopping, at 19.7%.
“E-commerce retailers are bound by the limitations of the current delivery model,” McKevitt added. “Substantial delivery costs are an obstacle to completing orders at the quick turnaround shoppers demand. This hasn’t stopped retailers innovating to find new ways of satisfying this ‘right here, right now’ mindset, such as one-hour delivery from the likes of Tesco and Sainsbury’s, or Amazon’s upfront Prime Now subscription model.”
While the online market remains a challenge for traditional bricks-and-mortar retailers, as well as FMCG suppliers, according to McKevitt, “the growth of voice-recognition technology, such as Amazon’s Alexa, could be one solution, as it allows consumers to make real-time, spontaneous decisions with few barriers to purchase.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
