SeaFood Business is the global trusted authority for seafood buyers and sellers. We are the seafood industry's leading trade magazine with more than 30 years of experience. Our coverage is based on the "business" of buying and selling seafood.
Issue link: https://seafoodbusiness.epubxp.com/i/112398
Global Retail Ph ot o co ur te sy of He ll o Fr e sh The U.K.���s online grocers offer a variety of fresh, frozen and preserved seafood. Making it click Can seafood capitalize on the online grocery shopping boom? BY JASON HOLLAND U nfortunately for European retailers, new longterm revenue streams are almost as rare as money-growing trees. Tere is, however, one shining light in what is otherwise regarded as a depressed market and that is the thriving online grocery shopping sector. Online grocery sales have become big business in the last few years and are set to get much bigger. In terms of market acceptance, the United Kingdom has been one of the quickest out of the blocks with online sales representing 3.4 percent of its overall 46 SeaFood Business March 2013 grocery market. While that may not seem a huge ���gure, international food and grocery analysts IGD has forecast it will grow signi���cantly over the next ���ve years. IGD anticipates the sector will be worth ��11.1 billion (���13 billion/$17.5 billion) by 2017, or almost double its current value of ��5.6 billion (���6.5 billion/$8.8 billion). To give a further taste of e-shopping���s upward trajectory, U.K. retailer Sainsbury���s last year reported its online grocery orders were exceeding 165,000 a week, and that the annualized turnover for Sainsbury.co.uk was around ��750 million (���876.7 million/$1.2 billion), a 20 percent year-on-year increase. Sainsbury���s still lags behind market leader Tesco, which has a 30 percent share of the online market and grew revenues in this part of its business by 11 percent in the ���rst half of 2012. With this success, Tesco has also launched grocery dot-coms in Poland and Slovakia, and will soon unveil similar platforms in Tailand and Malaysia. In total, its online grocery presence generates annual sales in excess of ��2 billion (���2.3 billion/$3.2 billion). Also seeing strong growth is Ocado, which only has an online presence and has relied heavily on delivering Waitrose���s private-label products. For the year to Nov. 25, 2012, its gross sales were 11.4 per- cent higher at ��716.2 million (���837.2 million/$1.1 billion) and the company will soon double its existing capacity with the opening of a second high-tech warehouse hub. It should be noted, however, that while Ocado���s sourcing agreement with Waitrose runs until September 2020, Waitrose recently entered the online shopping market for the ���rst time. Analysts believe this move could hinder the former���s future growth, but the e���ects will be dulled by its fast-growing own-label range, which includes a number of seafood products. But what can online retail do for the seafood category? Te good news is that all the major online grocers have assembled large o���erings of fresh, frozen and preserved items. One problem increasingly referenced by businesses that have tested these waters: Te perishable nature and the high ticket price often associated with ���sh means that many shoppers want to see the product ���rsthand, which of course requires a visit to their chosen store. Te same applies to higher-value meat products. Fortunately, that���s not the end of ���sh���s Internet ���irtation. Tere���s another tier of online retail that���s perhaps more suited to seafood products ��� the concept of having all the component fresh ingredients for home-cooked meals delivered to the consumer���s door. Tis form of grocery shopping is already well established in Sweden, but has also taken o��� in the United Kingdom too, says Ed Boyes, commercial director at Hello Fresh, which was founded a year ago Visit us online at www.seafoodbusiness.com