UK grocers lead the way online - Brief Article - Statistical Data Included

Eurofood, Feb 13, 2001

UK grocers are enjoying success online, according to the latest report from UK research group Datamonitor. In its report, entitled "eFMCG Opportunities," Datamonitor analysed internet grocery sales in eight European countries, and the results showed that UK retailers have the highest proportion of internet grocery sales, with some [pound]580m worth of goods sold. By the year 2005, Datamonitor predicts that consumer online spending will top US$660bn, a huge increase compared to the US$25bn spent during 1999. Of that 1999 figure, US$3.5bn was spent on groceries, and this sector is set to become the largest business to consumer sector in the coming years.

Of the successful UK online retailers, supermarket operator Tesco was found to be top of the tree, having last year extended its UK coverage to 90% of the country. Arch rivals Sainsbury and ASDA/Wal-Mart are intent on catching up. However, smaller retailers such as Budgens, and Somerfleld have abandoned their internet strategies having failed to win a critical mass of shoppers. It is likely that other smaller retailers will also abandon their online strategies over the coming year. Currently, only Tesco covers its online overheads.

On an international scale, Tesco is followed closely by Dutch retailer Royal Ahold, whose online sales were particularly boosted with last year's acquisition of US online retailer Peapod. In 2001, countries such as France and Sweden are expected to see greatest growth.

Despite media coverage of dotcom failures, and the many problems experienced by people buying online, it seems the consumer is still happy to shop online.

Nick Gladding, senior analysts at Datamonitor said, "Our research indicates that demand for online shopping is strong [ ... ] the benefits they perceive from online shopping outweigh the problem."