Amount spent on online groceries is growing fast

Due to its huge surge in popularity, 2005 is being viewed as the year when internet shopping really became established, with nearly half of the UK adult population estimated to have used the Internet for some or all of their 2005 Christmas shopping. According to E-Commerce: The Internet Grocery Market, a new report Key Note, the main attraction of internet buying is its convenience for users. Consumers can search for products, compare prices, purchase items and arrange delivery, usually at a time suitable for them. Online buyers are also likely to prefer the comfort of this, as well as not having to visit the crowded UK shopping streets.

According to Key Note?s research, 11.7% of respondents purchase groceries via the internet at least once in a year. Comparing these results with similar research undertaken in 2004 would suggest the percentage of respondents purchasing groceries via the internet has remained more or less unchanged since 2004. However, what has changed is the frequency of purchases. In 2006, 2.5% of respondents said that they purchase groceries online once a week, compared with 2% in 2004. Furthermore, 1.4% of respondents claimed to use the internet to purchase groceries two or three times a month, up from 1% in 2004. The largest increase, however, was among the once-a-month online buyers, with 3.4% of respondents claiming to purchase groceries online this frequently, up from 2% in 2004.

Another change which appears to have occurred since 2004 is the increase in the amount of money that people usually spend when buying groceries via the internet. In 2004, just 18% of respondents spent over ?100 on online grocery purchases, although this figure increased to 33.2% by 2006. There has also been a increase in the percentage of respondents spending an average of between ?76 and ?100 on groceries per purchase between 2004 and 2006, from 17% to 19.4%, and corresponding falls in the proportion spending less than ?76.

Heavy users of internet grocery services often tend to be from suburban households, typically aged 25 to 34 years and with children. For these consumers, internet shopping offers convenience and a minimal amount of effort, therefore enabling them to spend more time engaged in other activities.

Key Note estimates the value of the UK market for internet grocery shopping continues to increase strongly. In 2005, sales were projected to have increased by 26.7% to ?1.38bn, almost two-thirds higher than in 2003. Since 2001, the value of the sector has more than tripled. Between 2006 and 2010, the internet grocery market is expected to rise by more than 20% year-on-year.