Posted on

UK consumers switching online in their droves

UK consumers switching online in their droves

 

According to NielsenIQ data, the number of British households shopping for groceries online has more than doubled in the last year, reaching 41% compared to 18% at the same point in 2020. Overall, online grocery sales are up 132% y-o-y, while sales at bricks and mortar stores declined by 1%. UK shoppers spent £1.5bn on online groceries in the four weeks ending 27th February 2021, with the online share reaching 17%. This is the highest ever share for online grocery sales in the UK and a 1% increase in share in just a month. 

Total till sales for February grew by 10.6% y-o-y, the highest growth recorded since June 2020, when sales growth peaked at 14%. The top-performing retailer is Lidl, which enjoyed 21.2% sales growth in the past 12 weeks, as the discounter continues to benefit from its Lidl Plus loyalty app. Next came Iceland (+17.5%), and Morrisons (+11.7%).

NielsenIQ’s UK head of retailer and business insight, Mike Watkins, said: “One year on since the pandemic began in the UK, it’s evident that a lot has changed in terms of consumer shopping patterns. Online grocery has now become a permanent fixture for many UK shoppers – it is now past the ‘tipping point’ and is at the ‘sticking point’. Consumers no longer feel like they have to shop online, but do so because they prefer to, particularly now that many retailers have expanded fulfilment capacities. Even when we exit lockdown and start to return to some normality, we anticipate that online demand will continue to grow ahead of the market.”

 

Posted on

Discounters and online channels make headway in UK retail

Discounters and online channels make headway in UK retail © IGD Shopper News
© IGD Shopper News

 

The UK retail grocery sector was valued at US$232.3 billion in September 2019, up 1.7% on 2018, according to the Institute of Grocery Distribution (IGD), which estimates that the market will expand by 12.5% by 2024 to be worth $261 billion. Online grocery shopping will be the fastest growing channel, with a projected rise of 41% over the next five years. By 2024, discounters are predicted to be worth $41.6 billion, while convenience stores will remain the third-fastest growing sector with sales up from $49.6 billion in 2019 to $57.8 billion by 2024. 

The UK’s top-five retail groups together hold 74% of the market share. Convenience stores, discounters and online grocery retailing are seeing strong expansion, with major chains opening smaller stores in city centres at the expense of the previously popular large-format outlets in out-of-town locations. Discounters Aldi and Lidl continue to gain market share. In the 12 weeks ending May 17th 2020, the discounters’ combined market share reached 13.6%. And they  show no signs of resting on their laurels, as both chains have announced plans to open hundreds of more stores over the next two years.

While online shopping had already been increasing year on year, the Coronavirus has driven this trend even further and the channel now accounts for 11.5% of all grocery sales. Indeed, online grocery shopping attracted more new shoppers in 2020 than in the previous five years combined. Online delivery company Ocado has seen sales rise by 32.5% in the past four months, with its market share now at 1.6%, compared to 1.3% last year. 

The success of the discounters had led to a drop in food prices in recent years, but, in recent months, prices have shot up by almost 20%, especially in the fresh produce categories. It is unclear at this point whether these high prices are here to stay.

On average, UK households spend $3,868 on groceries and $1,897 on restaurants and takeaways every year. Groceries account for 11% of total household spending, making it the third largest area of expenditure, following housing and transport.

Posted on

Japanese supermarket giant Aeon, in online grocery push

AEON organic retail store

AEON organic retail store

Credit: Aeon

 

 

Aeon is partnering with British online grocery pioneer Ocado to launch a new company by March 2020 that will use AI and robotics to deliver a cutting-edge digital experience. Also, as a sustainability initiative, Aeon has set up a platform to help boost organic farming in Japan, where demand is outstripping supply of organic food.

 

Fresh food delivery has yet to truly take off among the Japanese, who largely still pick up fresh produce on a daily basis. But with better logistic networks and different demographics – such as more dual-income households and senior citizens – that’s forecast to change. And with AmazonFresh already in Tokyo, and Walmart (owner of Aeon rival Seiyu) beefing up its online grocery delivery together with Japanese e-commerce giant Rakuten, it’s no surprise that supermarket Aeon is also making the leap. In a statement in November, Aeon said it will leverage Ocado’s world leading know-how to launch and operate “the next generation online supermarket.” It plans to open its first customer fulfilment centre harnessing the Ocado Smart Platform by 2023 to serve Japan’s Kanto region, followed by others over the following two years in order to eventually serve the whole country. And it anticipates achieving online grocery sales of about 600 billion yen (about €4.92b) by 2030. “Aeon will realise a highly efficient operations and distribution system to deliver ‘anytime, anywhere, anything’ through a superb application interface to meet our customer needs. It is expected that these technologies can be utilised for the existing Aeon online supermarket business, store pick up, click & collect,” the company said in a press release. Aeon also plans to seek more partners both in Japan and around the world in order to be at the forefront of the digital era. Ocado, it should be mentioned, has also been chosen as a partner by other major supermarket groups around the world, including Kroger in the US, Casino in France, Marks & Spencer in the UK, ICA in Sweden and Coles in Australia.

Produce from farms run by Aeon Agri Create // Credit: Aeon

 

A platform to boost organic production 

Two other key initiatives from Aeon are in the area of organic food. Back in 2017, among the sustainable procurement goals the group set itself was that of boosting the sales ratio of organic products to 5% of all its agricultural products by 2020, also when Tokyo will host the summer Olympics. Aeon says it wants to contribute to “human, social and environmental health” through organic products, furthermore ones that are “cultivated, distributed and consumed naturally.” It also says it is “responding to our customer demands for safer, better tasting, and environmentally friendly food products.” However, while interest in organic produce is on the rise in Japan, “supply of organic products has not caught up with growing consumer demand,” it says, and “organic JAS certified producers in Japan account for only 0.2% of all farmers.” Given this context, in September 2019 the retailer announced another initiative, the new Aeon Organic Alliance (AOA). In a statement, it said this platform will boost the supply of organic products and help farmers overcome the burden of high organic cultivation costs and those incurred due to inefficient distribution, as well as giving them opportunities to gain new skills, exchange information and share and solve issues together. The AOA platform will be used to “centrally manage production, procurement, processing, distribution, and sale of organic agriculture products.”

Organic produce in Bio c’ Bon store in Japan // Credit: Aeon

 

14 new organic stores in Japan

AOA members will also have access to technological know-how for the acquisition of Global G.A.P. and organic JAS certification. Aeon has acquired such expertise via the 20 farms it directly manages across Japan. The farms are operated by the company Aeon Agri Create and three hold organic JAS (Japanese Agricultural Standard) certification, one of which is the fully organic 16 ha Saitama Hidaka Farm. Aeon’s organic farms will serve as distribution bases that collect products from growers who are members of its organic alliance, thus reducing distribution and delivery costs while also facilitating joint purchasing of materials necessary for cultivation, which in turn lowers costs. Furthermore, an AOA website will share what is happening in stores, including customer feedback, product line-ups, and sales performance, as well as overseas trends and other relevant information. It will also serve as a communication platform for connecting producers. Another group subsidiary, Aeon Topvalu, develops Aeon’s private brand for organics, Topvalu Gurinai, which is sold in group stores across Japan. Also providing a sales outlet for organic produce in Japan are the Bio c’Bon stores operated by Aeon in partnership with French firm Bio c’ Bon. There are now 14 such stores in Japan.

Posted on

Food firms join forces with retailers in China to set up Fresh Assemble

envios a domicilio

Walmart and JD.com have joined forces with seven major food suppliers in China to expand Walmart’s home delivery service in the country with the addition of 100 new products. The venture is called Fresh Assemble and will feature contributions from Goodfarmer, Tyson, Sunner, Blue Snow, Jinlongyu, Dole and Yili, Customers living within three kilometres of Walmart retail outlets across China can choose from 450 different items to order products for home delivery via the JD Daojia platform.

Walmart is also working with the Dada delivery service to ensure food safety and ecological practices. The home delivery market in China is growing quickly and Walmart and JD.com are seeking to be main players in the lucrative field.

Posted on

How to win in both online & conventional retail

Eurofresh Distribution editor Pierre Escodo's latest editorial looks at critical factors for success in both conventional and e-retail.

Fruit and vegetable consumption may be declining in Europe but as highlighted at the ‘Tomatoes, trends towards 2020’ conference in Antwerp in April, the market value of tomatoes has nevertheless risen.

The reality is that sales can be boosted via tastier, more convenient varieties that increase consumer satisfaction.

And more sales can also be achieved through online shopping.

In Europe, Denmark is one country where e-commerce is truly booming for fresh food, such as seen with the success of nemlig.com, and in Asia, Japan – where online sales are growing at double digit rates – reveals that it’s not just young people but also seniors that supermarkets should cater to with their online platforms, including mobile retail.

Adapting online shopping to consumer needs is crucial to success, and entertainment is a factor that also needs to be considered, advises Kantar WorldPanel in its recent report on the growth of e-commerce in FMCG. Interestingly, its data shows that in the UK, tomato products form the category with the second highest online share, and in France, soups are top-ranked.

From the pen of editor Pierre Escodo on page 3 of edition 143 (May/June 2016) of Eurofresh Distribution magazine. Read it online here.

Posted on

Walmart’s seamless shopping strategy

Walmart's “seamless shopping” strategy starts with its existing, unparalleled assets – 2.3 million people; more than 11,500 retail locations; e-commerce websites and apps; and a dynamic, optimised supply chain – but also requires new capabilities and fresh thinking.

Customers used to compare Walmart with the store down the street; now they compare it with the best online shopping experience, says CEO Doug McMillon.

“And beyond retail, they compare us with every business they interact with in their lives. They compare our pickup experience to the speed and friendliness of the best drive-through. They compare our checkout process to the ease of paying with an app,” he want on to say.

In an excerpt from the American multinational retail chain’s 2015 annual report, McMillon said retail is not just about putting items on a shelf anymore. “It’s about fighting for our customers, cutting out the hassles and advocating for them on price, too. We’re moving beyond just selling products to being the brand customers rely on to make their lives simpler and more meaningful as they save money.”

McMillon said Walmart’s “seamless shopping” strategy starts with “unparalleled assets that only Walmart has – our 2.3 million people; more than 11,500 retail locations; e-commerce websites and apps; and a dynamic, optimised supply chain. But it also requires new capabilities and fresh thinking.

“This includes new digital tools for customers and frontline associates, as well as back-end software and platform work that benefits the entire enterprise. The use of data, algorithms, advanced forecasting capabilities – and more – is of extreme strategic significance.

“We will put these pieces together in a way no one else can,” he said.

“To help our associates succeed and better serve our customers, we’ve made big changes – including investing approximately $2.7 billion over two years in higher wages, education and training to make Walmart U.S. a better place to work and shop.

“We’re already seeing positive results: our fourth quarter of fiscal 2016 marked six consecutive quarters of positive comps and five straight quarters of positive traffic at Walmart U.S. Everything we’re doing in omnichannel depends on customers having great interactions with us in our stores.”

And the retail giant will strive to be more sustainable, “both in our own operations and in our supply chain,” he said.

“We have three big goals: creating zero waste, running on 100 percent renewable energy and selling products that sustain people and the environment.”