UK online grocery sales likely to surge by a quarter

Online grocery sales are expected to surge by more than a quarter this year as the coronavirus lockdown prompts more families to shop from home.

Supermarkets have ramped up online operations to serve millions more shoppers as fears of catching Covid-19 have driven demand from vulnerable shoppers, including the elderly, as well as families trying to avoid trips to the shops.

Tesco alone has more than doubled its number of delivery slots, including click and collect, to 1.2m in six weeks and Sainsburys is on course to increase its number of slots by more than 75% to 600,000 this week. Asda, Morrisons, Iceland and Waitrose have also significantly upped their deliveries.

On Thursday, Waitrose is to open a six-acre new warehouse in Enfield, north London, as it prepares to part company with Ocado, the online grocery specialist which currently sells the supermarkets food. The facility will enable Waitrose to double online grocery deliveries in the capital by September with an extra 13,000 weekly slots.

Thomas Brereton, a retail analyst at research firm GlobalData, suggested that the switch to shopping from home was unlikely to reverse even if the government-imposed lockdown to prevent the spread of the virus is eased later in the year.

“The online grocery market is now forecast to grow 25.5% in 2020 – significantly ahead of the 8.5% previously anticipated,” Brereton said. “On top of the initial increase in volume demand (about 30% in April), a continued reluctance to venture to stores for the rest of the year will bolster online market growth over a longer period than in store.”

The latest prediction came after it emerged that online sales grew to account for 10.2% of the grocery market in the three months to 19 April, up from about 7% previously, according to market analysts Kantar. Its regular survey found that older shoppers in particular had taken to internet shopping, increasing their online grocery spend by 94% year on year.

Despite the rapid growth, supermarkets have admitted they cannot keep up with even higher demand.

It takes time to develop infrastructure to service home deliveries, including additional vans, staff to pick groceries from shelves or new “dark stores” or warehouses.

Ocado, the online grocery specialist, for example, has struggled to expand its service, because it relies on robot-driven facilities that take months or years to build. The grocers with physical stores have been able to adapt more quickly by setting aside time when supermarkets are closed to pick online orders or by extending click and collect or home delivery services to more outlets.

The effort to meet demand has become more pressing as consumer and disability rights groups have warned that thousands are not getting the help they need during the pandemic.

READ MORE FROM SOURCE: https://www.theguardian.com/business/2020/may/05/uk-online-grocery-sales-lockdown-internet-coronavirus