Online grocery driving growth for Tesco in the UK
Despite the prevailing narrative of a sluggish online grocery market, the reality is quite the opposite. The market has not only rebounded from the pandemic slump but, for some companies, has also surpassed the peak levels of 2020-2021. This is a clear sign of recovery and a promising outlook for the future.
The UK grocery market leader Tesco has been the latest to report strong growth from online sales. In the last 12 months, the online channel has generated £6.5 billion in revenue for the company, surpassing the pandemic peak of £6.3 billion in 2020. This growth is evident in the number of orders and the average basket size.
The most interesting figure for Tesco is that 13,5% of all its UK revenue now comes from online sales—a very strong number. Since Tesco is by far the biggest grocer in the UK, it's noteworthy that few market leaders can report over 10% of revenue share from their online channels.
Given the scale of Tesco’s operations, it is worthwhile noting that 30% of the company's growth in the UK comes from the online channel.
Tesco has seen strong growth in the core grocery business also. After losing market share during the high inflationary times, the company has started to grow market share. Since August of 2023, the company has been able to take market share from its traditional rivals and lately also from the German discounters.
