The grocery market is perhaps one of the few retail sectors that has remained largely unaffected by the growth of online retail, with physical stores remaining consumer preference. While sectors such as fashion have increased their presence online and seen online revenue shares grow rapidly in the past couple of years, the grocery sector is evidently less exposed to e-commerce. 

In Europe, the online revenue share of the grocery market is only 3.5% in 2024, and is forecast to reach 4.8% in 2028. In contrast, the online revenue share of fashion is currently much higher at 26.0%, forecast to reach 35.6% in 2028. It is undeniable that grocery delivery services have grown to be an important aspect of food retailers’ distribution strategies with many incorporating omnichannel strategies, but securing physical brick-and-mortar stores will remain a high priority for occupiers given most revenue is generated in-store. Stores that have the infrastructure to offer an omnichannel approach benefit from increased investor interest.

In the online grocery space, the scale is often influenced by the consumer, the brand and the location. For the consumer, while the reach of the online grocery market is growing, physical grocery stores continue to remain bolstered by the sentiment that consumers can get the best deals in stores rather than online, translating into high activity levels. 

Additionally, an online presence is not offered by all operators, and the market is typically more fragmented among smaller players who predominantly operate in-store only. International supermarket brands such as Auchan, Coop and Carrefour all have well-established channels offering online grocery shopping and incorporate omnichannel strategies into their business models, but this is not the case for all grocery retailers. Large discounter Lidl does not offer this service, along with Aldi, and smaller players in the market without the infrastructure will also not operate in this space, choosing to prioritise the physical store.

Online grocery shopping also varies per country, with climate and culture playing more of a role in physical store attendance in Mediterranean countries which encourage shopping at local markets and stores. 

For the portion of grocery retailers who do operate online, advancing technology will be key in the future to keep up to date with evolving consumer expectations in-store. Carrefour, which operates in the likes of France, Spain and Italy, has integrated OpenAI technology to launch a shopping assistant called Hopla. This offers consumers the opportunity to ask for help in choosing products for their basket based on budget and food constraints, and can also suggest anti-waste solutions for reusing ingredients. Enhancing the consumer experience when shopping for groceries both online and in-store with the development of such technology will be key for retailers.

_{Read the articles within Spotlight: European Grocery Market 2024 below.}