Online grocery sales soar in January

Data from NielsenIQ shows a  large proportion of this expense came from new online shoppers who spent an equivalent of £770m.

Overall the online share of grocery sales across British supermarkets doubled to 16% in the past four weeks ending 30 January, up from 8% during the same period in 2020. This is the highest share achieved by online grocery sales, exceeding the levels last seen in June 2020, when the share peaked at 14%.

The research shows that during the four-week period, 1 in 3 of all British households shopped online (9.3m) and 4.1m of these shoppers were new to the channel, the highest number of new online shoppers on record.

Overall, grocery till sales grew by 10.6% in the past four weeks, also the highest growth since June 2020.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “It has been an extraordinary January for British supermarkets. This was spearheaded by the exceptional growth in online grocery, in which there were 24 million online shops made – up from just 11 million last January. This growth has once again been driven by increased demand throughout the third lockdown as shoppers shifted spend away from stores where overall growth was flat. Retailers were able to flex their capacity in home delivery and increasingly in click-and-collect to meet the unprecedented number of new online shoppers.”

Watkins continues: “Looking forwards, we anticipate that this level of spending will remain consistent throughout February, however, we will see growth fall in March given the comparative  21% growth of last March, and we estimate that growth for the full quarter will level out at between 1%-3%.”

In addition, the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of more than 200 retailers, reveals January recorded the highest online sales since the pandemic began at +74% year-on-year – and the highest January sales on record since 2008. The increase was reflected across all categories, with health & beauty and beer & wine sales up +102% year-on-year and +105% year-on-year, respectively.

The strong demand for online grocery in the UK was reflected in Ocado’s financial results for the 52 weeks ended 29 November 2020. The retailer reported 35% increase in retail revenue, while group earnings were £73.1 m, and it reduced losses from £214.5m to £44m.

Tim Steiner, chief executive of Ocado Group, said: “The rapid acceleration of many pre-existing trends in business and society has been a feature of the Covid-19 crisis and the dramatic channel shift in grocery is a clear example of this. The landscape for food retailing is changing, for good. As we look ahead to a post-vaccine world and a return to a new normality, Ocado Group is very well placed to enable our grocery partners worldwide to bring the best customer experience to market, responsibly, with high levels of hygiene and superior, sustainable, and proven economics.

“Going forward, customers who have experienced the benefits of online grocery shopping are likely to become ever more discerning. Winners in the online channel will need to offer the very highest standards of customer service and the ability to serve a full range of customer missions. These include the full family basket as well as the convenience shop, the option of direct to home or pick up at the store, the same day or next day.”