Woolworths is the Leader of Online Groceries, Report Finds

Power Retail By Power Retail | 10 Jul 2020

Woolworths and Coles have been going somewhat neck and neck during the pandemic, but it seems that Woolies is coming out on top.

According to a new report from Roy Morgan, Woolworths had the ‘lion’s share’ of all online grocery spend (57.4 percent) – as a result, this share grew 60.1 percent for the first three months of 2020.

“The competition to retain online grocery shoppers post-pandemic opens up an interesting new front in Australia’s fiercely fought supermarket rivalry,” said Michele Levine, the CEO of Roy Morgan.

The data found that online groceries are the ‘net big battleground’, with Woolworths having the larger share of the overall spend – “but Coles isn’t too far behind,” the report explained.

Before the pandemic was announced by the WHO, only three percent of all supermarket purchases were made online, the report found.

However, since the pandemic was announced, this number of online shoppers grew exponentially. The lockdown restrictions ‘turbocharged’ the move to online as store shelves were stripped bare. In fact, the supercharged buying spree online was so immense that the supermarkets had to restrict the online offering during the peak of the pandemic.

Although Woolworths is currently the leader of online shopping for supermarkets, Coles has ‘closed the gap so far in 2020’, the report found.

Coles has experienced the fastest growth so far in 2020, with its share increasing 33.1 percent in the March quarter of 2020 – up 26.1 percent over the full year and an increase of seven percent points.

“Our data shows that almost one quarter of grocery-buyers who shopped at Coles, Woolworths or Aldi in a four-week period actually spent money at all three supermarkets,” Levine explained.

“That is a high rate of customer leakage between the brands. It might even be said that rival brands attracting customers away from what they regard as their main supermarket have succeeded in larceny. However, online shopping changes the dynamic significantly.”

The overall ‘lack of competition’ within the online grocery market leaves the two biggest players in a ‘dominant position’.

“In the March Quarter 2020 Coles has grown its share seven percent points, and Woolworths is up three percent points, compared to their respective market shares over the full 12 month period to March 2020,” Levine explained.

“There is no doubt about the growing significance of the burgeoning online grocery market.”

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