One of the idiosyncrasies of the Irish grocery sector is that online sales here are puny compared to, for example, the British market.
The latest grocery industry share figures from Kantar show online sales grew 2.2 per cent last month, but that is coming off a tiny base. Online grocery sales in Ireland are worth still only about 4 per cent of the overall market, according to retailers. In Britain, the proportion of the market that is online is more than three times bigger than here.
Online sales rose during the pandemic but not by as much as they might have, when you consider the circumstances. Irish consumers are considered tech savvy. The pandemic spurred massive growth in all manner of digital activity and customers had a genuine public health disincentive to going out to supermarkets.
Yet despite all this, 18 months into the crisis, more than €95 in every €100 spent in Irish supermarkets is still transacted in person.
It is also difficult to see where a significant surge in online grocery sales might come from in future. The German discounters, Aldi and Lidl, both seem ambivalent about online and have outsourced the service to third parties to limit the cost – Aldi uses Deliveroo while Lidl uses Buymie.
Tesco and SuperValu offer home delivery starting from €4, while Dunnes, which also uses Buymie, rushed into the market only last October, as a reactive measure during the pandemic.
Retailers say one of the barriers is the high cost of home delivery, which matters in the hyper-competitive Irish grocery market. Most supermarkets are effectively subsidising the cost of deliveries for customers, and provide it only as an extra service rather than a sales channel all of its own.
The Irish market may be too small and, outside of the major urban centres, the population may be too thinly dispersed for online grocery shopping to be as economically viable here as it is in Britain.
