2010 Online grocery sales gain momentum

Coles and Woolworths saw their online grocery sales double in 2010, suggesting that a trend that got off to a slow start in the early 1990s was finally gaining momentum. Woolworths had begun to offer online shopping in a limited form in Sydney in 1992. At that time, fewer than one in three households had a personal computer.  Coles began online grocery sales in 1999. A small number of independent food delivery operators also had online ordering systems.

Despite growth in online shopping generally, online grocery sales were initially slow and limited to Sydney and Melbourne. Coles expanded its online service to Brisbane in 2008 and to Adelaide and Perth in 2009. Woolworths expanded to the Gold Coast in 2009 and Brisbane soon after. At that time delivery costs for Woolworths were $5 for a six-hour delivery window, $9 for a four-hour window and $13 for a two-hour window. The Coles fees varied between $9 and $15.

In the early years, online shopping was restricted by the levels of computer ownership and internet access.  According to the Australian Bureau of Statistics, in February 1996 just under 2.2 million households Australia-wide owned a computer (34 per cent of households) and only one in nine of these households was connected to the Internet. By November 2000 some 4 million households owned a computer (56 per cent), and more than two-thirds of these households were connected to the Internet. This still left a lot of Australians without the means to shop online.

Various studies have identified that another major obstacle for online grocery sales is that customers are happy with their current way of shopping. One Australian study found that 73 per cent of customers say they’re satisfied with in-store shopping and can’t see the added value of purchasing online. The major retailers have so many stores that, especially in urban areas, almost everyone lives close to a supermarket. And many people don’t decide what they want to buy until they’re in the store, looking at the shelves.

A further reason for staying with in-store shopping is the need to be available to take delivery of the groceries. Stores have attempted to overcome this by introducing  “click and collect” schemes that allow customers to collect their orders from petrol stations or from the stores themselves.

In spite of the increasing trend towards online grocery sales, as recently as March 2020 it accounted for just three per cent of supermarket turnover. Of this, Woolworths was well ahead of Coles with 57.4% of all online supermarket sales, compared to 26.1% for its rival.

The COVID-19 pandemic of 2020 saw many more people shopping online for groceries. However, as of January 2021, 90% of food purchases were still in stores.

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