Online grocery sales yet to surge in Australia

Posted by Daniel Palmer on 11th September 2009

Online grocery sales in Australia remain well below the percentage levels seen in countries like the UK, but the roll-out by Coles and Woolworths could yet have a significant impact.

In the 12 months to June 2009 37.9% (or 6.7 million Australians) had bought a product or service over the internet in a three month period; a significant increase from the 34.4% or 5.9 million Australians in the previous year to June 2008.

Online shopping

It is only recently that the major supermarkets have begun to ramp up there online offer, so it is a little early to assess the prospects for future growth in this sector. However, the number of Australians who are buying groceries online only rose marginally from 0.9% or 162,000 people in the year to June 2008 to 1.2% or 212,000 people in the year to June 2009.

“We have seen significant growth in the uptake of buying products and services online over the last 10 years and it shows no sign of slowing down. The “traditional” internet purchases of travel, books and entertainment are still gaining support while “newer” categories such as clothing and alcohol are increasingly popular,” Michele Levine, Roy Morgan Research CEO, advised. “As we see an increase in the range of products available online together with an increase in the number of people who are comfortable giving their credit card details over the internet, it’s not surprising that nearly half the population have bought something online; so the question is why not groceries?”

Both Coles and Woolworths had been slow to expand beyond Sydney, Melbourne and Canberra but all of a sudden there is a flood of new market entries from the firms. Coles was the first to enter the Brisbane marketplace and entered Perth and Adelaide in May and June this year, respectively. And now Woolworths has launched their Homeshop service in the Gold Coast this week, and it is expected this will be followed by introductions to the Perth, Adelaide and Brisbane areas.

“As the current online grocery buyers are more likely to be from higher income households with children, professional and semi-professional households often with two incomes, the planned roll-out by Coles and Woolworths should start to see some growth; and it’s likely to come from these time poor, higher income Australian families,” Levine concluded.