Global market review of online grocery retailing – forecasts to 2014

Table of contents

The global online grocery retailing market is dominated by the UK and the US, which together accounted for almost 75% of the world total in 2009. At less than 1.5%, however, online and internet channels still account for a very modest share of the global retail grocery market. Furthermore, food and groceries continue to lag well behind non-food items as far as the online retailing market is concerned, with consumers using the internet most frequently for booking travel and holidays, as well as for financial-related tasks such as banking.

This new report from just-food looks at the major markets' adoption of online grocery retail, current trends within the sector, and consumer dynamics. It also profiles the major food retail groups' online strategies and it forecasts the markets, trends, technological activity and corporate plans.

Use this report as a background guide to understanding the overall market, to help analyse the global market and to predict future trends and market sizes.

Beginning with an executive summary/preface and Chapter 1 Introduction, the report then reviews the global market for online grocery retailing.

Chapter 2 Global market overview
The global market for online grocery retailing remains at a relatively early stage of development in many parts of the world. To date, sales of food and drinks over the internet have yet to make the same impact observed in other parts of the consumer goods industry, most notably books, clothing and electronic items such as computer equipment.

Global sales of food and drinks online were valued at US$19.9bn in 2009. This figure is limited to countries where a quantifiable market exists, all of which are mainly located in either Western Europe or North America. A truly global figure is thought to lie somewhere between US$20bn and US$30bn.

This chapter includes data covering the major online food and drinks markets worldwide by value, and per capita expenditure by market.

It also provides UK and US online food and drinks markets by value over the last five years, showing % of total market each year, which trends how online's share of the market has changed.

Analysis is also provided for other major markets around the world.

Chapter 3 Current trends
A number of major trends are shaping the development of the global online grocery retailing market. From a retail standpoint, the economic recession has altered ways in which people shop for groceries, while ongoing technological developments continue to affect the strategy of many leading operators within the e-commerce sector (eg: Tesco’s iPhone wine app, which provides product information such as price and tasting notes).

This chapter looks at the impact of the recession, ethical consumerism, technological influences, seasonal demand, and EC proposals - all key trends that will continue to shape demand for online retail.

Chapter 4 Consumer dynamics
Although penetration levels have widened during the last decade, making purchases over the internet is still heaviest among society’s more affluent consumers, since a computer and modem are required to carry out the transaction, as well as either a debit or credit card. It is mainly for this reason that online grocery shopping tends to increase with social grade.

This chapter looks at internet usage trends by region, consumer attitudes and buying behaviour.

Chapter 5 Major retail groups
The supply structure for the online grocery retailing market differs throughout the world according to region. In the UK and Europe, the leading suppliers are the major food retail groups, whose profile and brands are already familiar to shoppers. As far as the major supermarket groups are concerned, online and internet shopping enables them to gain easy access to their customers, offering a wide range of items (both food and non-food) that shoppers might not have time to peruse in store.

Here, the major international retailers are profiled, with commentary on each company's online grocery retail developments. Profiled are: Wal-Mart Inc, Safeway Inc, Royal Ahold, Tesco plc, Carrefour, Groupe Auchan, J Sainsbury plc, Amazon, Coborn's Inc, FreshDirect, MarketDay Coporation and Waitrose.

Chapter 6 The future
As the next decade progresses, countries such as the UK, the US and some of the Western European nations are expected to retain their dominance of the global online grocery retailing market. Nevertheless, increasing household penetration of both internet and broadband throughout many parts of the world are expected to increase the consumer base and therefore make grocery shopping via the internet a more common practice for the global population.

Opinions regarding the future direction of the market vary widely at present. We present our analysis and estimates from considering the many predictions.

The report concludes with just-food's forecast for the UK and US online food and drinks market (by value) from 2009 to 2014. Plus, we look at other major markets and factors that will influence future development of the market including: continued technological advancements, and likely short-term corporate activity.

Read more about this report with just-food's research article here