Online sales are forecast to grow at 43.8% to 16.7 billion pounds in the next five years.
On Thursday, researcher IGD forecast, Britain’s food and grocery industry, driven by the online and discounter channels, is set to grow by 12.5% to $272.8 billion (217.7 billion pounds) by 2024.
Online will be the fastest growing channel and is likely to grow at 43.8% to 16.7 billion pounds in the next five years; this is just ahead of discounters, which are forecast to grow 40.2% to 34.3 billion pounds.
IGD said online’s market share will increase to 7.7%, while discounters’ will rise to 15.8%.
Growth in the online channel is coming from newer players entering the space such as Amazon and meal box operators such as Hello Fresh, Gousto and Mindful Chef.
Interestingly, established players, including Sainsbury’s and Ocado, have begun introducing faster and more convenient options to shop for groceries online and this includes orders deliveries within the hour. More sophisticated analytics are also helping to strengthen customer loyalty to online, said IGD.
The growth of discounters is being fueled by them opening from brick-and-mortar stores.
Aldi is on track to trade from 1,200 UK stores by 2025, while Lidl is raising its store openings to 50-60 per year.
According to IGD, large stores such as supermarkets and hypermarkets, will continue to account for half of the market in 2024, while the convenience segment will account for 22.2%.