Grocery Delivery - United Kingdom

The United Kingdom's Grocery Delivery market is projected to achieve a revenue of US$26.79bn by 2024.
It is expected to demonstrate an annual growth rate (CAGR 2024-2029) of 9.19%, resulting in a projected market volume of US$41.58bn by 2029.
The Retail Delivery market, on the other hand, is anticipated to reach a market volume of US$22.88bn in 2024.
In comparison to other countries, China is expected to generate the highest revenue, amounting to US$266.00bn in 2024.
In terms of average revenue per user (ARPU), the Grocery Delivery market in the United Kingdom is projected to reach US$1.06k in 2024.
Additionally, the number of users in the Grocery Delivery market is expected to reach 33.0m users by 2029.
The user penetration rate in the Grocery Delivery market is estimated to be 37.3% in 2024.
The United Kingdom's grocery delivery market is rapidly expanding with the rise of online platforms and increased demand for convenient and contactless shopping experiences.

Definition:

The Grocery Delivery market consists of food and non-food products that people regularly buy from a grocery store, including food and beverages, pet food, household cleaning products, personal care products, and other household consumables. Grocery delivery can be purchased through several different sales channels such as Omnichannel, Quick Commerce, or directly from the store.

Structure:

Grocery Delivery contains three markets: Retail Delivery, Quick Commerce, and Meal Kit Delivery. Retail Delivery includes delivery of these products directly by supermarkets, brick-and-mortar shops, or grocery stores. The order is placed through an online shop run by the retailer (e.g. Walmart+, Amazon Fresh). Quick Commerce focuses on online delivery services that provide customers with last-mile delivery (Instacart), or operate ghost stores where product selection is limited but delivery time is faster (e.g. Gorillas, Getir, and Glovo). In this case, the platform (e.g. Gorillas) handles the delivery process. This also includes grocery delivery platforms where delivery is advertised under 3 hours, although, most players aim to deliver in minutes. Finally, Meal Kit Delivery encompasses the delivery of a recipe box where fresh ingredients are delivered to be prepared. This service is usually offered as a subscription plan (e.g. HelloFresh).

Additional Information:

Revenue figures refer to Gross Merchandise Value (GMV). User and revenue figures represent B2C services.

Fresh food & Beverages, personal care, or household items ordered online are directly delivered to the consumer, no matter if ordered via a platform (e.g., Instacart) or a retailer website (e.g., Walmart)
Online Grocery orders and delivery are both carried out by a retailer (e.g., Walmart)
Online orders that are picked up in the supermarket (e.g., Instacart) or operating ghost warehouses and delivery logistics (e.g., Flink)
Online orders of recipe boxes where the ingredients are already preportioned (e.g., HelloFresh)

Phone orders
Deliveries of prepared meals for direct consumption (e.g. Meal Delivery)

The Grocery Delivery market in United Kingdom has seen a significant growth in recent years, driven by a shift in consumer behavior towards online shopping and convenience.

Customer preferences: Consumers in the United Kingdom are increasingly turning to online grocery shopping due to its convenience and time-saving benefits. With the rise of technology and the availability of delivery services, customers can now order groceries from the comfort of their homes and have them delivered to their doorstep. Additionally, the COVID-19 pandemic has accelerated the growth of online grocery shopping as consumers have been reluctant to visit physical stores.

Trends in the market: The Grocery Delivery market in the United Kingdom is highly competitive with several players offering online grocery delivery services. The market is dominated by established players such as Tesco, Asda, and Sainsbury's, but there has been an emergence of new players such as Ocado and Amazon Fresh. These new players are disrupting the market with their innovative business models and technology-driven solutions. For instance, Ocado has developed a highly automated warehouse system that enables them to fulfill orders quickly and efficiently.

Local special circumstances: The United Kingdom has a highly urbanized population, which means that many consumers live in densely populated areas such as cities and towns. This presents a unique challenge for grocery delivery companies as they need to navigate narrow streets and congested roads to deliver groceries to customers. Additionally, the United Kingdom has a diverse population with varying dietary requirements and preferences, which means that grocery delivery companies need to offer a wide range of products to cater to different needs.

Underlying macroeconomic factors: The United Kingdom has a strong economy with a high level of disposable income, which means that consumers are willing to pay for convenience and quality. Additionally, the United Kingdom has a well-developed logistics infrastructure, which makes it easier for grocery delivery companies to transport goods across the country. However, the United Kingdom is also facing challenges such as Brexit and the COVID-19 pandemic, which could impact the growth of the grocery delivery market in the future.

Data coverage:

The data encompasses B2C enterprises. Figures are based on Gross Merchandise Value (GMV) and represent what consumers pay for these products and services. The user metrics show the number of customers who have made at least one online purchase within the past 12 months.

Modeling approach / Market size:

Market sizes are determined through a bottom-up approach, building on predefined factors for each market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies, third-party studies and reports, as well as survey results from our primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, GDP per capita, and internet connection speed. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing. The main drivers are internet users, urban population, usage of key players, and attitudes toward online services.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. GCS data is reweighted for representativeness.

This report presents a comprehensive analysis and additional information on the Ecommerce market, in a PDF format.