Food and Drink E-Commerce in Israel

PROSPECTS

Changing consumer priorities driving growth of food and drink e-commerce

Consumers are leading increasingly hectic lives, and the considerable number of time-poor consumers continues to contribute to the strong growth of food and drink e-commerce in 2019. Indeed, a greater number of consumers are now committing to greater convenience and making the most efficient use of their time in nearly all aspects of their daily lives, including making the most of the time they usually devote to everyday tasks such as shopping for groceries.

New food and drink e-commerce players face challenges over the forecast period

Large grocery retailers are active and operating relatively successfully in the e-commerce channel, but mid-sized and smaller brick-and-mortar grocery retailers will have to initiate significant development efforts in order to operate effectively within the channel. These efforts are costly and will be prohibitive for many, particularly as initial investments will not be recovered in the early stages of operation and as early online purchasing result in negative margins as operational costs remain very high.

Despite desire for convenience, many consumers still eschew e-commerce and shop in-store

Busy consumers looking for convenience and time savings are driving value sales growth in the food and drink e-commerce channel in 2019. On the other hand, there is still currently a large core group of consumers, often older consumers, who prefer to shop for their food and drink in-store, and it will continue to be difficult to convince them to switch to e-commerce.

COMPETITIVE LANDSCAPE

Shufersal Ltd continues to lead food and drink e-commerce in 2019 by expanding its services

Shufersal Ltd was the first modern grocery retailer in the country to launch an e-commerce operation, and in 2019 its focus on increasing online sales continues to be a key element of its value sales growth strategy. This early adoption of e-commerce and mobile e-commerce has proven to be an advantage for Shufersal Ltd in the increasingly competitive food and drink retailing environment, and the company continues to push that advantage by enhancing its customers’ online shopping experience.

Rami Levy Shivuk Hashikma supporting gradual growth of its food and drink e-commerce operation

During the review period, Rami Levy Shivuk Hashikma recorded robust current value sales growth, and in 2019 the company ranks second in terms of value share in the modern grocery retailing channel. Looking to build a foundation for ongoing value sales growth in coming years, the company continues to develop its e-commerce operation, albeit gradually.

New players invigorate food and drink e-commerce while established players expand their offerings

Several new players are launching novel and innovative services in the food and drink e-commerce channel. New online grocer Shookit, for example, now sells and promptly delivers fresh fruit and vegetables to consumers in Tel Aviv, while the online grocery start-up Quik gives customers who order online the choice of having their purchases delivered within four hours or picking them up from a designated location within one hour.

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