Food and Drink Internet Retailing in the United Kingdom

PROSPECTS

Obstacles to the channel achieving its high potential

Whilst there has been an ongoing consumer shift, with many preferring to do their bigger weekly shop online instead of in-store, there are still obstacles to food and drink internet retailing achieving its high potential. These have mainly to do with fresh food.

The growth of recipe boxes

With urbanisation and the increasingly hectic pace of life leaving many people with less time to spend shopping and cooking, the online environment provides consumers with an easy and convenient method to shop for a wide range of products and have them delivered to their doorstep. On the back of this shift in consumer shopping patterns and lifestyles and in relation to cooking, start-up companies such as HelloFresh, and more recently even retailers, have seen an opportunity to deliver a concept called a “recipe box”.

Long-term online grocery commitment leads to low delivery charges

At the end of the review period, the majority of grocery retailers within food and drink internet retailing in the UK were operating online as a way of complementing their store-based retailing strategies. All these multichannel grocery retailers charge a fee for delivering online grocery orders.

COMPETITIVE LANDSCAPE

The leading players

The main players in food and drink internet retailing in 2018 were bricks-and-mortar retailers Tesco, J Sainsbury and Asda, all of which adopted a multichannel approach in recent years. However, online retailer Amazon also joined the fray towards the end of the review period, moving into food and drink retailing with the launch of the Amazon Fresh brand.

Omnichannel operations – key for future development

However, with the blurring line between bricks-and-mortar and online, all players are likely to seek both an online and physical store presence. For instance, recent news suggests that in addition to Whole Foods, there is also a high possibility that Amazon will launch its cashierless grocery store Amazon Go model in the UK next year, as the first market in Europe.

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