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Even as lockdown eases, one in five UK households are shopping for food online. Research by Kantar shows that, in the four weeks to 14 June, online grocery sales grew by an astonishing 91% year-on-year. And it isn’t just the ‘big four’ – smaller convenience stores and smaller format stores run by the larger chains have also got in on the act, accounting for just shy of 15% of these sales.
This move online is part of a wider trend in grocery initiated by the coronavirus pandemic. Lockdown naturally forced more consumers to shop online – for everything, not just food – but it has also shifted shopping habits too.
While more consumers are buying food online than ever before, they are also buying less frequently, but in larger amounts each time. They have switched from a grazing model – which saw many supermarket chains open smaller convenience stores – back to the large weekly shop. In fact, Kantar finds that UK shoppers made 77 million fewer trips to the supermarket in June 2020 compared to last year and 19 million fewer than in May 2020. This trend towards online, large weekly, shops is likely to continue and has obvious implications for managing grocery delivery strategies going forward.
At the height of the pandemic, grocery delivery was so over-subscribed that from the second half of March until the end of April, between 72 and 85% of European grocery retailers analysed by Retail X were offering no delivery slots at all. By June, 15% were still not doing it.
The challenge for grocery retailers has been how to meet the massive and rapid upswing in demand for delivery of large orders. While Tesco, Sainsbury’s and Morrison’s are all in the process of recruiting and training new delivery drivers and Waitrose is building a fourth distribution and fulfilment centre in London, these measures are slow to take effect. The change in demand is now.
This is forcing a rethink of how grocery delivery is facilitated – and retailers are turning to novel ways to make it work. Asda, for instance, has become the latest retailer to team up with Uber Eats to allow shoppers to get almost immediate delivery of 300 Asda own-brand items, much as they would a takeaway meal. Similarly, Aldi is working to create from scratch its own home delivery service with rival takeaway delivery company Deliveroo.
These are just two examples of many across Europe where grocers are partnering with takeaway delivery firms to not only tap into the massive growth in online grocery delivery, but to make it rapid and even more convenient. Both the Asda and Aldi examples are aiming to get the delivery there within two hours and half an hour respectively: a game changer compared to the delivery model in place with the big grocers where the consumer must book a slot as much as a month in advance.
While more consumers are shopping for food online than ever before, the pandemic has also forced a rethink of how they want those groceries delivered. The model for ‘next hour’, ‘two hour’ and ‘same day’ delivery that was hot in ecommerce before the pandemic has now taken root in grocery. How grocers meet this demand will reshape what grocery looks like in the years ahead.