While retailers will be hoping for a bumper Christmas for online grocery, new figures show the rate of growth in the sector has slowed significantly since Tesco increased its minimum delivery spend in July.
According to the latest Kantar figures, online growth has slowed from 15% in August to just 7.4% this month.
Tesco changed the minimum spend on orders from £25 to £40 at the end of July.
Kantar Worldpanel head of retail and consumer insight Fraser McKevitt suggested the move had pushed many smaller, top-up baskets off the internet. “Consumers would clearly welcome the opportunity to buy smaller baskets, so retailers need to think about how to make it as easy as possible for their customers to shop online, while being careful not to damage their own margins.”
Orders via the Tesco website for less than the £40 threshold now incur a £4 surcharge on top of the existing delivery charge. Current delivery charges range from £1 to £6, depending on the date and time of the slot.
“Tesco’s decision to increase its minimum spend threshold will have contributed to the slower growth of e-commerce, but it’s difficult to see how on-the-day, small-sized deliveries like the new Amazon Fresh trial can be a widespread and sustainable offer across the UK,” said McKevitt.
The percentage of households that bought groceries online at least once in the past year now stands at 27%, up from 26% a year ago. However, uptake among young families with a child up to the age of four is much higher, at 49%.
“On average, households only shop online 14 times a year,” said McKevitt. “If retailers want to guarantee growth, they need to concentrate on upping the frequency with which these shoppers spend online.”
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