Online grocery sales surge as lockdown 3.0 bites

British shoppers spent a record £1.4bn buying groceries online last month, industry data showed on Tuesday, following the introduction of the third national lockdown.

The latest Total Till data from NielsenIQ showed sales rose 121% year-on-year in the four weeks to 30 January 2020. Of the £1.4bn spent – the highest ever – £770m came from new online shoppers.

The online share of grocery sales across supermarkets doubled to 16%, up from 8% in January 2020. One in three households, or 9.3m, shopped online.

Total till sales across the supermarkets grew by 10.6%, the highest growth since June 2020. Of individual retailers, Wm Morrison was the only so-called big four to gain market share in the last 12 weeks, after sales rose 10.5% year-on-year. , There were also strong performances from discounter Lidl – with sales up 18.3% – and Iceland, were sales rose 15.4%.

Tesco, Asda and J Sainsbury saw sales growth of 8.6%, 7.0% and 8.2% respectively.

Mike Watkins, UK head of retail and business insight at NielsenIQ, said: “It has been an extraordinary January for British supermarkets. This was spearheaded by the exceptional growth in online grocery, in which there were 24m online shops made, up from just 11m last January.

“This growth has once again been driven by increased demand throughout the third lockdown as shoppers shifted spend away from stores, where overall growth was flat.”

Looking ahead, Watkins said spending levels were likely to remain consistent through February before easing in March, largely because of tougher comparatives. Growth for the first quarter is therefore expected to level out at between 1% and 3%.

Clive Black, retail analyst at Shore Capital, said: “Lockdown 3.0 in England, dismal weather, dark days and after whatever festivities the British enjoyed through Christmas, the mood was undoubtedly low in January.

“With folks staying in, down and worried about biosecurity, the key feature of the Nielsen update is the strength of the online grocery channel, with 16% participation recorded; a channel that is now demonstrably more profitable for the trade.

“We expect trading momentum to reverse with unlocking from March and in the face of tough comparatives. Nevertheless, stronger cash flows should continue, making the 2020-21 two-year stack a good one for UK supermarkets, with better economics to come for a defensive sector.”

The NielsenIQ data coincided with the publication of full-year results from Ocado, the online grocer. It reported a 35% jump in sales, to £2.2bn, although increased investment meant it reported a small loss.