22/08/2017 – News / Retail / Online / UK / Supermarkets
New UK retail results show online food sales are swiftly eating up market share
New official retail figures show that online food sales in the UK are up 13.9 per cent, piling the pressure on Britain’s beleaguered traditional supermarkets.
July’s Office of National Statistics (ONS) retail results, reveal that online food spending was up nearly 14 per cent year-on-year. This makes online food sales worth 5.3 per cent of all UK consumer spending. Responding to these figures the e-commerce home delivery experts Fastlane International say this shows just how under threat UK high street supermarkets now are.
“July was a strong month for internet sales, which were up 15.1 per cent against July last year. Internet sales now account for 16 per cent of all consumer spending,” said Fastlane’s Head of Consumer Research, David Jinks, adding that it is nonetheless the strong growth in online food sales that is the most striking. “While July wasn’t a bad month for traditional supermarkets – with overall food sales up two per cent following a wobbly few months – this was totally eclipsed by the stellar 13.9 per cent growth in online food sales.”
July was the month that Tesco announced the introduction of near nationwide one-hour food deliveries; and Mr David remarked that this is no coincidence: “It’s not only the growth of online-only food delivery services such as Ocado and Deliveroo that are feeding the growth in online food sales. We often forget it was the ‘traditional’ supermarket Tesco that pioneered e-commerce, making the world’s first ever online sale as long ago as 1984. Today Tesco often comes second only to Amazon in UK online sales. Small wonder the likes of Marks & Spencer are pulling up their socks and finally planning to introduce food deliveries this autumn.”
However, the established supermarket brand’s move to online sales could come at a price for their own high street stores: “The growth of convenient home food deliveries, and one-hour food deliveries from Amazon and now Tesco, means high street supermarkets could soon become as obsolete as video rental shops,” warns Mr Jinks, whose company’s research predicts that physical supermarket sales will slump from 42 per cent of the overall market share to account for just 24 per cent by 2030. “That’s not enough for many ‘brick and mortar’ stores to remain viable,” he noted. “Those huge, out-of-town superstores in particular look like becoming white elephants. The decline of the weekly big supermarket shop is likely to spell the end for many local stores, as home deliveries replace pushing recalcitrant trolleys around the aisles every Saturday morning.”