UK Digital Grocery Sales Projected To row Sharply Over The Next Five Years

The UK grocery sector will see the most growth among digital channels over the next five years. But brick-and-mortar stores—and discounters in particular—will also see some relatively high growth rates.
This year, online grocery sales in the UK are expected to reach £10.4 billion ($14.0 billion), equal to 5.6% of the £184.5 billion ($249.0 billion) expected in overall UK grocery sales for 2017, IGD predicts.
By 2022, grocery ecommerce will be worth an estimated £16.0 billion ($21.6 billion). That’s a 53.8% increase over 2017’s figure, and will represent 7.5% of £212.9 billion ($287.4 billion) in total UK grocery sales expected to be recorded that year.
Other analysts put ecommerce’s share of grocery sales even higher. A June 2017 estimates 7.3% of all UK sales of fast moving consumer goods (FMCG) were made digitally in 2016, up from 6.7% in 2015. Only South Korea had a higher share of FMCG sales made online, the study found. (Kantar used the terms grocery and FMCG interchangeably.)
The UK is a global leader for several measures of grocery ecommerce. The country’s online shoppers bought groceries digitally a world-leading average of 15.4 times a year in 2016. They also spent the most per trip: £61.8 ($83.4).
IGD chief executive Joanne Denney-Finch said digital natives will “help to sustain [ecommerce] growth in the future, as they carry on shopping online for groceries and potentially convert others to do the same.”
Additional ecommerce options, like wider availability of Amazon Fresh, which last year launched in the UK for buyers in a limited area of London, should only spur further uptake. But greater grocery ecommerce won’t come without a fight from brick-and-mortar rivals.
IGD also predicts growth across the major nondigital grocery channels through 2022. Discount retailers are expected to see a nearly 50% gain in sales volume between 2017 and 2022 due to “ambitious” store opening programs, the development of new store formats and investments in product assortments.
“Online will remain the fastest-growing channel over the next five years, but we have lowered our forecast for this part of the market from 2016, as many retailers have also started to refocus their efforts on the in-store experience, which will create additional competition for online,” Denney-Finch said.
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