eGrocery Expands in the UK Even as Basket Sizes Shrink

This week in grocery, Ocado sees consumers cutting items from their list as competitors digitize.

United Kingdom online grocer Ocado Retail, a joint venture between grocery technology company Ocado Group and British retailer Marks & Spencer, noted record high sales over this past holiday season.

“We finished 2022 in a strong position, with our biggest ever Christmas for our customers, with sales up 15% on our biggest ever order day on the 20th of December,” Ocado Retail CEO Hannah Gibson stated in the company’s Q4 2022 update, shared Tuesday (Jan. 17).

Yet, this single-day spike does not change the fact that, in the face of soaring prices, online grocery shoppers are cutting back.

Gibson stated that, though the company expects to benefit from consumers seeking alternatives to restaurant dining, many are nonetheless cutting back on unnecessary grocery purchases. Average basket value was down 1.3% year over year, with the number of items per basket declining.

“We’ll continue to provide a focus on offering great value and providing a great and cheaper alternative to eating out,” Gibson said. “The first half of 2023 will see basket sizes considerably lower than those of the first half of 22. [The] second half of 2023 will see basket sizes compare against a more normal second half in ‘22 in terms of number items per basket.”

Indeed, if U.K. grocery shoppers are anything like U.S. shoppers, cutbacks are top of mind. Research from the latest edition of PYMNTS’ Consumer Inflation Sentiment study “Consumer Inflation Sentiment: Perception Is Reality,” for which PYMNTS surveyed more than 2,100 consumers in December, reveals that 69% of consumers have made changes to their grocery shopping lists in the last year in response to rising prices. Fifty-nine percent have reduced the quantities of items they are purchasing, and 35% have reduced the quality.

Just Eat Takeaway.com Expands Grocery Presence with Sainsbury’s Partnership

While grocery does not seem to be a top-of-list priority for Dutch multinational aggregator Just Eat Takeaway.com, the company nonetheless is adding new merchants to its marketplace in the United Kingdom.

On Monday (Jan. 16), the company announced it will add more than 175 locations of major U.K. supermarket chain Sainsbury’s by the end of next month, promising delivery within a half hour.

“We’re delighted to bring a wide range of options to thousands of consumers, demonstrating the huge value we can provide in this space with on-demand delivery,” Amy Heather, director of strategic accounts at Just Eat, said in a statement.

Notably, grocery does not seem to be as high on Just Eat Takeaway.com’s list of priorities as it is on those of its competitors. While rival Deliveroo described on an earnings call Thursday (Jan. 19) how grocery is key to customer frequency, Just Eat Takeaway.com only made mention of its grocery efforts once on its own call Wednesday (Jan. 18).

“Grocery [is] starting to march forward, you will have seen our Sainsbury’s announcements this week with big plans to scale,” Just Eat Takeaway.com Chief Commercial Officer Andrew Kenny said. “The Co-op Group was another key one announced before Christmas. And that’s alongside and many of the big additions that we made in the first half of last year.”

Kroger Boosts Promo Effectiveness With Easy-to-Use Digital Coupons

At the recent National Retail Federation (NRF) event, NRF 2023: Retail’s Big Show, Rodney McMullen, CEO of the United States’ leading pure-play grocer Kroger, spoke to how inflation is influencing shoppers’ behaviors.

As the NRF noted Monday, he highlighted higher levels of coupon downloads, noting that personalization has driven adoption.

“I always tell people that the only thing I know for sure is that people are going to keep eating,” McMullen said. “How they eat? I guarantee that will change. It’s our job to continue to support customers and communities to eat the way they want to, and it has to be a good value for the money, it has to be amazing quality and it has to be easy — however somebody defines ‘easy.’”

Indeed, McMullen contended, according to Progressive Grocer, that for digital coupons to be effective, they must be comparably simple and intuitive to use to traditional paper coupons if not more so.

Indeed, in a November interview with PYMNTS, Barbara Connors, vice president of commercial insights at 84.51°, the marketing insights subsidiary of Kroger, emphasized the same trend.

“We know that very price sensitive customers are those that have lower engagement with eCommerce and are lower on the adoption curve, and those are the customers that are most likely to go into a store,” Connors said. “And one of the reasons is because they are looking for sales, deals and coupons, and it is easier for them to do that in-store than online.”