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Online grocery sales forecast to hit £15b by 2020 proving a big opportunity for wine

Published:  15 April, 2016

Retail market research firm Mintel forecasts that online grocery sales will increase 73% to reach £15 billion by 2020, proving an opportunity for the wine category.

New research from Mintel shows that 29% of UK online grocery shoppers are shopping for their groceries more on online than they were 12 months ago. The shift away from heading to the in-store grocery aisle and shopping from home helped to increase online grocery shopping to 6% of the total grocery sector in 2015, which doubled compared to 2010 which saw just 3% of all grocery shopping coming from the online channel.  The value of the online grocery shopping channel also double during the five year period from 2010 to 2015, jumping from £1.1 billion to £2.3. billion.

Nearly half (48%) of all Brits are current online grocery shopping according to Mintel research, with one in ten doing all their grocery shopping online.

While the growth in online grocery shopping is increasing it is important to remember that it is still growing from a relatively small base.

Nick Carroll, retail analyst at Mintel, said: "The online grocery market continues to grow in double digits, but remains small in the context of the wider grocery market. However, the shift away from superstores to more convenient shopping channels is certainly benefiting the market with the majority of consumers now doing some grocery shopping online and almost a third saying that they now shop online more than a year ago."

Still one quarter (24%) of Brits have never shopped online and have no interest in doing so, this is particularly true for people over the age of 55.

One area online grocers need to improve that could be a barrier to more consumers shopping online is the inability to provide a freshness guarantee on products.

"The lack of control when selecting fresh food and drink products remains one of the biggest issues for online grocery retailing and not one that is easy to address. All of the major players now offer some form of freshness guarantee but this is still not a substitute for picking your own. Inevitably, due to the volume of orders the major retailers now have to process, not all products or orders live up to expectations,' said Carroll.

According to a recently released Wine Intelligence's UK Online Retail and Communication 2016 Report, online wine retail spend hit approximately £800 million per year in 2015.  Further the report indicated that wine is predicted to grow to represent 14% of total wine sales over the next three years. 

One of the biggest opportunities for wine is around the influence digital 'word -of-mouth' online recommendations can have on buying, according to Wine Intelligence. The report said: "The opinions of friends and family are still what online buyers trust the most, only on social media rather than in person. Similarly crucial are the opinions of wine merchants and small wine producers, but on the web rather than in the flesh. It would seem, therefore, that the internet primarily empowers pre-existing trusted sources of information with a new voice rather than enabling entirely new ones."