Sales of food and drinks through online platforms and mobile applications skyrocketed in 2020, seeing triple-digit growth, mostly due to lockdowns, the shift towards home working and the desire to reduce store visits. This trend, although slowing, also remained strong in 2021, due to the continuation of the pandemic and resultant consumer caution and lockdowns as new waves of the virus were seen.
The COVID-19 pandemic lasted longer than expected during 2020, which accelerated the entry or expansion of store-based retailers in food and drink e-commerce, resulting in a more competitive environment. Some retailers teamed up with delivery services and third party operators to avoid the high expenses related to running their own delivery network.
Kifli.hu (a local affiliate of Rohlik Group), is a pioneer in food and drink e-commerce, with a new monthly membership plan which offers various benefits, such as free delivery, shopping without an order value limit, guarantee of same-day delivery, free express delivery and exclusive discounts.
Food and drink e-commerce is set to maintain dynamic current value growth throughout the forecast period, although the rate of increase is set to slow, unable to maintain such strong increases. The entry of companies specialised in distribution and logistics in food and drink e-commerce is bringing a new approach.
Although Budapest and its close catchment area is the busiest region, with the largest proportion of frequent online customers, food and drink e-commerce players are rushing to expand their services to other larger towns and popular holiday destinations (mostly focusing on the peak summer season) to increase their coverage, thus following the market dynamics and the competition, although sometimes benefiting from first-mover advantage. Of course, first-movers such as Tesco have a competitive advantage in terms of coverage, but others are also catching up as they are able to fix the challenges of fresh/frozen food delivery.
Cashier data from grocery retailers confirms that the average basket value of customers buying grocery products online is well above that of customers who shop in bricks-and-mortar stores, thus special attention is needed to retain these customers. Most online purchases of food and drink are well planned, and shopping lists are prepared carefully not to miss anything, as these purchases are weekly/biweekly main grocery shopping/pantry loading for most shoppers.
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Internet retailing sales of food and drink (all packaged and fresh food and drink (hot drinks, soft drinks and alcoholic drinks).See All of Our Definitions
This report originates from Passport, our Food and Drink Internet Retailing research and analysis database.
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