As online grocery booms in Britain, will new habits die hard?
LONDON (Reuters) - Britain’s multi-billion pound supermarket industry is placing its bets on whether big-spending older shoppers will stick with buying their groceries online when months of lockdown end.
Having more than doubled during the COVID-19 pandemic to represent 16% of Britain’s roughly 200 billion pound ($281 billion) food retail market, the country has one of the world’s highest take-ups of online grocery.
Ocado boss Tim Steiner says it’s here to stay and will carry on growing quickly.
Not so fast, say bosses of some established rivals.
“A lot of people are talking about the new normal, I’m absolutely convinced that we are not in this new normal right now, we are in the temporary normal, we are in an extraordinary time,” Christian Härtnagel, CEO of Lidl GB, told Reuters.
He believes that as the crisis recedes, so will online grocery penetration, not back to pre-COVID-19 levels of 7% but a lot less than 16%.
Lidl does not offer home delivery and for many the jury is out on whether online sales can ever be as profitable as instore purchasing, where shoppers make more impulse buys and extra transport and logistic costs are avoided.
Older shoppers have led the rapid growth of Britain’s online sector.
A third national lockdown boosted retired households’ online grocery spending in January by 229% year-on-year, making up 28% of the 6.4 million who ordered online in the month, market researcher Kantar found.
Whether they stick with it after restrictions end, possibly in June, remains to be seen. The rollout of vaccine will make people less risk averse and months of isolation have left many eager for the social contact of a visit to the shops.
Stephen Pfeffer, a 75-year old retired bank worker from South Woodford in east London, was classified as a vulnerable person at the start of the pandemic so for much of 2020, he took online deliveries from Waitrose.
“I was forced into online shopping with the first lockdown,” he said.
But after regaining his confidence to venture out, he returned to shopping at stores. Now, he has been vaccinated, he uses online only occasionally for bulky items like wine.