Food and Drink E-Commerce in New Zealand

PROSPECTS

Food and drink driving e-commerce

Food and drink e-commerce was the strongest performing constituent channel within e-commerce in 2019, with double digit growth and accounting for more than one fifth of value sales within e-commerce overall. Both click & collect and delivery are available to customers in New Zealand across the major grocery retailers - Progressive Enterprises and Foodstuffs.

Local players dominate

New Zealand’s relative geographical isolation means that consumers are usually starved for choice in many retail categories, with the limited options available priced at higher levels than those found in comparable offshore markets. As such, buying from international sellers is an attractive proposition to many local shoppers.

Average basket size increases, driving growth

The dynamics of grocery shopping in New Zealand are that shoppers will usually make one big shop per week, and with increasing online options, shoppers are increasingly moving toward food and grocery e-commerce to do this, which has helped to grow the average basket size to NZD138. This is 267% higher than the offline basket size due to that channel being used more as a way to ‘top up’ when items run out, or something urgent is required.

COMPETITIVE LANDSCAPE

Pak N Save launched online shopping

While rival chain Countdown and sister chain New World have existing e-commerce functionality, big box supermarket chain Pak N Save launched online shopping in 2019 on a click and collect basis, first through its Sylvia Park store in Auckland before being rolled out to all other North Island stores. While the company is still focusing on offering strong in-store experiences, the launch of the e-commerce functionality brings the company into line with its rivals and offers increased convenience to shoppers.

Progressive Enterprises continues to lead

Through its Countdown brand, Progressive Enterprises was the leading player within food and drink e-commerce in 2019, and underlining the importance of food and drink on e-commerce in New Zealand, was also the leading player within e-commerce overall in 2019. The company’s Countdown brand has a well-established online sales capability, with the company reformatting its stores to have designated collection points in store to ensure a more efficient in-store experience for click and collect customers.

New World relaunch

Foodstuffs’ New World brand launched a new look e-commerce site in 2019, designed by AKQA, designed to offer customers an optimised digital experience and offer greater choice and convenience to customers. Rather than simply acting as a traditional e-commerce portal, the New World website also functions to provide inspirational content to its customers – providing recipes, facts about products, as well as tips to get the most out of food.

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