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Bethan Wilkins

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AHDB Pork Market Intelligence

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The online challenge for red meat

Home \ Prices & Stats \ News \ 2014 \ July \ The online challenge for red meat

Online grocery sales will more than double in the next five years, according to IGD. The need for longer use by dates and product quality assurance are two of the key challenges facing fresh meat in the online channel. Nearly half of online grocery shoppers say they prefer to buy fresh foods in-store rather than buying online.

Online grocery sales will more than double in the next five years, according to recent research by the retail trade body IGD. This impressive growth will be fuelled by new market entrants such as Morrisons, the rollout of click & collect, lower delivery charges and greater shopper engagement with mobile technology. The channel, which was worth some £7.7bn in the year to April 2014, is expected to be worth £16.9bn by 2019 and will see its share of grocery shopping rise from 4.4% to 8.3%. Currently, 27% of shoppers use online for some grocery shopping, up from 22% in 2010, with 1 in 10 using this channel for the majority of their grocery purchases.

The need for longer use by dates and product quality assurance are two of the key challenges facing fresh meat and other fresh foods in the online channel. According to IGD, over half of all online grocery shoppers say they prefer to buy canned and packaged food and drinks and non-food products such as detergents and toiletries online than in-store. However, there is a significant swing in sentiment for fresh food – nearly half say they prefer to buy fresh foods in-store rather than buying online. Only a fifth (18%) say they prefer to buy these products online, which compares with 45% for frozen food.

According to Kantar Wordlpanel, online sales of fresh red meat were worth £176.4m and accounted for 5% of total sales in the year to June 2014. Expenditure grew by almost 22%, fractionally ahead of the growth rate for total grocery through this channel. When looking at the growth drivers, we see that all measures are up with the exception of the amount being bought per online shop. This trend will be influenced by shoppers being incentivised to buy more frequently by retailers trying to lock in consumer spend with subscription delivery services.

Looking at pork specifically, prices were marginally down and, as a result, it experienced the strongest volume growth of 21%, compared to 14% for beef and 8% for lamb. However, value growth was also only 21%, slightly below the whole red meat category. In terms of cuts, mince accounted for 44% of total fresh red meat spending, compared to 30% at total market level. The stronger showing, driven by beef mince, is not surprising as product quality tends to be more consistent.

Looking ahead, whilst clear opportunities exist from online for red meat, the challenge will be to convince shoppers that they will obtain the same quality buying online as they would picking themselves in-store. Allowing online shoppers more opportunities to state their product preferences (such as for different meat thickness) could be one way to reassure them that they can pick the same items as they can in-store.