10% growth for UK quick commerce market despite fewer shoppers using the channel

13 June 2022

The UK quick commerce market – the delivery of groceries and essentials to customers in less than one hour – has grown by nearly 10% year-on-year to £1.5bn, according to newly released figures from insight provider IGD. In the first of an updated three-part report series, the new research explores how the channel has evolved over the last 12 months against the backdrop of the pandemic and cost-of-living crisis.

Research highlights:

  • The UK quick commerce market is forecasted to have grown nearly 10% year-on-year to £1.5bn. However, that’s only 0.7% of the total UK grocery market
  • There are fewer shoppers using quick commerce, with 11% of UK households using the channel versus 13% last year
  • However, IGD estimates that UK quick commerce shoppers are spending more year-on-year, about £40 per month in 2022, versus £30 per month last year
  • 40% of UK quick commerce shoppers are forecast to be ordering 1-2 times a month
  • Due to the cost-of-living crisis, quick commerce pure plays* have invested in price. Last year, an average basket was 18% more expensive than a convenience store. Today, it’s almost the same price.

The reduction in shoppers using the channel isn’t a surprise due to the pressures in disposable income, with shoppers less likely to want to pay delivery charges. However, the shoppers that are using quick commerce are spending more, and the channel has become much more integrated with day-to-day shopping behaviours. Indeed, a third (33%) of UK shoppers are now using quick commerce once or twice a week, so this has become a way of life for these shoppers.

The size of the opportunity, which is based on average claimed spend of shoppers already using the service and those interested in using the service, has decreased to £3.2bn from £3.3bn in 2021. This is due to the average hypothetical spend of interested shoppers decreasing. Again, this is likely due to the cost-of-living pressures in the UK.

Commenting on the opportunities within the market, IGD Retail Analyst Rachel Sibson says:

“Quick commerce has been one of the fastest growing and innovative segments of the food and consumer goods industry.

“For suppliers, this provides an opportunity to reach new shoppers, particularly younger shoppers in urban locations. While it can be challenging to partner with multiple companies in this space, the channel provides an opportunity to test and learn, gather new shopper data and try new ideas in a more agile way compared to working with more established platforms.”

IGD Retail Analysis subscribers can access the first full report of the series at www.retailanalysis.igd.com

Parts two and three of the IGD Quick Commerce series will explore the opportunities for suppliers and IGD’s predictions for what the future of the channel look like.

Notes to editors

  1. IGD is an organisation of two interconnected communities. The profits from Commercial Insight are reinvested into Social Impact, which together work to drive change that makes a tangible difference for society, business and the individual.

    Commercial Insight is delivered through six core areas:

    a. Retail Analysis – providing trusted data and insight, straight from the heart of retail;
    b. ShopperVista – providing insight that creates the foundation for progressive shopper and category thinking;
    c. Events – providing compelling experiences that connect people and ideas together;
    d. MarketTrack – the most trusted, rigorous market read in the retail sector;
    e. Supply Chain Analysis – providing answers and unlocking potential;
    f. Solutions – personalised solutions that address the critical customer and commercial challenges.

    Social Impact from IGD is delivered in four key areas:

    a. People
    b. Health
    c. Sustainability
    d. Economics
  2. All content is owned by IGD. If you use or refer to any content in this press release, please credit IGD
  3. Market size estimates:
    • The figures are built from IGD shopper data, and the average quick commerce spend of respondents already using the service and those interested.
    • The annual market estimate (£1.5bn) is based on the claimed spend of the UK shoppers already using quick commerce in May 2022.
    • IGD estimated again the size of the opportunity for quick commerce in the UK - £3.2bn, based on average claimed spend of shoppers already using the service and those interested in using the service. Therefore, the numbers are a market estimate and an estimate for the size of the opportunity, rather than a forecast with a set timeframe.
    • The size of the opportunity has decreased this year as the average hypothetical spend of interested shoppers has decreased, likely due to the pressures with disposable income shoppers are facing
  4. To provide clarity on this new landscape and to help retailers and suppliers understand its operating models, IGD has also identified three sub-sectors within the channel:
    • Aggregators
      Aggregators are third party websites offering on-demand fulfilment. They differ from marketplaces as pricing and branding can be determined by the aggregator. Three types of aggregator exist: takeaway aggregators (Deliveroo) that now offer grocery delivery; grocery focussed aggregators (Instacart); and service aggregators (Rappi) that offer grocery as well as a range of other services.
    • Pure plays
      Pure plays are building their proposition around a high-speed delivery service, often with delivery in under 15 minutes. They run their own fulfilment centres, or dark stores, in urban high population areas for quick delivery. These include getir, Gorillas, Gopuff, Flink, JOKR, and Zapp.
    • Established retailers
      As well as partnering with third party players for delivery services, established retailers have also launched their own on-demand services. These include Carrefour Sprint, Tesco Whoosh, and Ocado Zoom. Fulfilment is varied, with some retailers using in-store pick and some retailers using automation.
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