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Double-digit online growth boon to Coles, Woolies

online grocerySome good news for Coles and Woolworths – over the last twelve months there has been a 22.9 per cent increase in new online grocery shoppers, according to Nielsen.

While fresh food purchases have traditionally been one of the laggard categories in Australia’s e-commerce boom, Nielsen’s latest report on the grocery e-commerce channel has deemed its growth “undeniable”, with 403,000 new households having purchased groceries online in the last twelve months.

Average spend and frequency of purchase among existing online grocery shoppers has also increased over the last twelve months, with growth in fresh purchases driven by convenience produce.

Fresh is still growing comparatively slower than other categories such as leaders like beverages, pet supplies and frozen food, increasing by 14.5 per cent in the last twelve months, although this still means an additional 293,000 households have brought fresh produce online over the last year.

Overall grocery e-commerce grew by 23.8 per cent in the year ended December 2017, growing significantly faster than the total market rate of 1.3 per cent during the same period. It’s good news for supermarket giants Coles and Woolworths; who unlike international entrant Aldi have been raking in the benefits of the channel growth, with both businesses signalling double-digit online growth in the first-half.

As a result, both businesses plan to invest more heavily in their ecommerce channels over the next six months. Online sales are still only around 3 per cent of the total grocery market, but Nielsen said its growth rate signals the importance of the channel.

“It is important now more than ever for Australian brands and retailers to have an e-commerce strategy for 2018, especially with the competitive arrival of Amazon in 2017,” Nielsen wrote in its report.

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