Here at Myfoodlink, we had access to the Ibis World - eCommerce Grocery Report Australia - April 2022. In this report, we could notice that the Australian online grocery market is in a solid straight-line upwards and that the future of the online market looks brighter every year.

The Australian online grocery market has been in strong growth over the past 3 years and it does not look like it will slow down anytime sooner.
In 2021, $10 billion worth of online sales were carried out in Australia, which means that the Australian online grocery market saw a 28% increase in sales compared to 2020, making up 8% of Australia’s $125 billion grocery market.

Online grocery spend in Australia is expected to grow another 50% by 2025 increasing online sales from $10 billion to $13.7 billion.
This growth will mean a rise of almost $4 billion in comparison with today’s online grocery market and will make up for 11% of all grocery spending in Australia.

While the above is what we can look forward to in the short term, the online grocery is expected to continue to significantly grow over the next 10 years at 23.5% on average year on year.
The Australian online grocery market will be looking for an approximate $28 billion injection into online grocery.

Who buys it and what are they looking for

The Australian online grocery market also debunked the myth that ‘Online Shopping’ is just for young people, according to the Ibis World - eCommerce Grocery Report Australia - April 2022.
In 2021, 54.2% of online grocery shopping was made by people in the age bracket of 35 to 55 years old. The gap between people under 35 and over 55 is only 5%, with under 35s making 25.4% of the market share while 55+ are 20.4% of the market share in 2021.

Knowing what your customer is looking for can help you plan better promotions and increase your online grocery market share. Data is king in the online market and by learning how to interpret this data you can make informed decisions to help you take a bigger cut of the online market share.

The bigger spending on food sold online is on pantry food, convenience and frozen foods. 34.1% of the sales in 2021 were with this group which includes fast food, soft drinks, snack foods, and TV dinners (ready to prepare), followed by the meal kits with 18.8%. Convenience is what your customer is looking for. Check the graphic for the complete list.

The giant ones

The giants are investing hard in the online grocery market. 10% of Woolworths’ sales and 7% of Coles’ sales are now online. 30% of Woolies’ growth in 2021’s last quarter alone is attributed to their online grocery sales.

Another reason for this great shift into online grocery sales is the average basket size versus the expenses with wages.

Wage costs with online sales are marginally higher than in-store sales, while the average size of the online basket is 83.4% higher than the in-store basket. The online average basket is $180 and the wage costs are 11.3%, and the in-store average basket is $30 with costs in wages making 10.9% of it.