1. Comment
April 28, 2022

Investing in online grocery shopping is paying off despite some resistance in Europe

By GlobalData Consumer

Globally, shoppers are continuing to buy into and explore the online grocery shopping landscape. As highlighted by GlobalData’s Q1 2022 consumer survey, close to three in five (58%) shoppers worldwide expect to continue or increase their grocery shopping in the upcoming months. However, q-commerce disruptors, fulfilment logistics, potential price changes and local resistance to the online channel could prove significant barriers for large retailers to overcome.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

National variation in the popularity of online grocery shopping is clear with Asian countries—China, Thailand, South Korea, and Vietnam—ranking at the top four in preference for online grocery shopping. Conversely, European countries skewer towards the lower end of the scale with Germany, Hungary, Switzerland and Ireland ranking in the bottom four. The success of retailers in countries with a lower online grocery shopping penetration paint an optimistic picture of the future of e-commerce globally.

In a recently published annual FY 2021 report, Germany’s largest retailer, Edeka, registers an overall revenue growth of 2.5% and boasts strong double-digit growth in online revenue. Reaching 19.4% is notable, although it reflects a slowdown compared to 2020’s number which hit 41.5%, albeit from a small base. This is in line with the company’s rivals such as Carrefour, which announced a 20% growth in its e-commerce model and relies on France for around 48% of sales.

Carrefour has stated that it aims to triple its e-commerce numbers by 2026, illustrating the company’s confidence in online sales. However, both Germany and France are under-indexing compared to the global average in online grocery shopping, clocking in at only 47% and 37% of consumers who expect to continue or increase their online grocery shopping. Carrefour and Edeka’s results stand in sharp contrast to Lidl, which is refusing to capitalize on the UK’s high online grocery shopping rates as investing in a delivery model would undercut and put pressure on the company’s low price promise.

Picking the right delivery collaborators and careful investments can enable retailers to appeal more to their target audience. Edeka, for example, invested in Picnic, a Dutch start-up that mimics traditional milkman strategies with planned routes. Armed with over 800 modern electric vans and a national nomination in 2021 for its Zero Waste Project, Picnic makes for a strong ally in a country where sustainable strategies are appreciated. In a further collaboration with Picnic, Edeka has launched Everest, an organisation built to support international expansion of online delivery.

The primary e-commerce barriers for European retailers lies in a discomfort with online grocery ordering which can be offset by collaborating with companies that align with the region’s values.

Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.