Forrester Research: UK Driving European Online Grocery Market

2000-06-27:

Revenues from online grocery sales in Europe will surpass those in the

US by 2003, driven by rapid expansion in the UK online retail sector.

According to Forrester, EUR55 billion (USD51.2 billion), or 5 percent

of all European retail sales, will be made online in 2005. Less than

0.1 percent of retail sales in Europe are currently made on the

Internet.

Last year, EUR99 million (USD92.3 million) worth of groceries were

sold online by UK supermarkets, more than in the rest of Western

Europe combined. Forrester predicts that 7 percent of UK sales will be

made online in 2005, while Scandinavian countries will be close

behind, with 6 percent of sales being made on the Internet.

Germany and France will sell 3 percent of groceries online by 2005,

but cultural factors and low technology penetration will hinder the

growth of this sector in Southern Europe.

Those who already buy groceries online tend to be young, high-earning,

urban professionals. About 40 percent have children.

Forrester says retailers will harness the Internet and use it to

overhaul their businesses and diversify into non-food products and

other services. Retailers who are early-to-market and very committed

to online sales should succeed. Those retailers who delay the move

online will have to offer better value, logistics and partnerships if

they are to succeed when they begin selling on the Internet.