Sunday 11 December 2016

Irish online spending on groceries rises by a quarter to €140m

Challenges lie ahead for traditional retailers, writes Gavin McLoughlin

Published 02/10/2016 | 02:30

Irish consumers' online spending on food soared by almost a quarter last year to nearly €140m, according to a new report. Stock photo: Getty
Irish consumers' online spending on food soared by almost a quarter last year to nearly €140m, according to a new report. Stock photo: Getty

Irish consumers' online spending on food soared by almost a quarter last year to nearly €140m, according to a new report.

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The figure far outstrips overall online spending growth here of 18pc, the study by online business body Ecommerce Europe says.

"Food will be the future of ecommerce," Ecommerce Europe policy advisor Luca Cassetti told a Retail Excellence Ireland (REI) event in Dublin on Thursday.

The change in consumer habits presents challenges for traditional retailers as consumer habits change.

Food companies here, such as Kerry Group and Glanbia, have been teaming up with internet sellers as consumers buy more food online.

Glanbia set up a partnership with Amazon to sell its performance nutrition products via Amazon Dash - a wifi-connected device that orders goods via the press of a button.

And Kerry Group chief executive Stan McCarthy said in May that his company was "engaged with many different companies that are exploring channels outside of the traditional retail channels."

"Certainly the retailers in the UK, for example, have been controlling the e-commerce channel, but now you have other parties beginning to enter into it that are avoiding the traditional retail infrastructure completely," he added.

"You have companies like Amazon entering into the UK market. Amazon are looking at delivering fresh food within, I believe, 40 minutes in the southeast of the UK."

Most of the money spent online by Irish people goes outside the country.

The Ecommerce Europe survey estimates that Irish online spending will reach €6.8bn this year - compared to €5.9bn last year.

"As spending by Irish consumers online reaches close to €7bn for 2016, 60pc of this spend will go outside the country," Retail Excellence Ireland (REI) chief executive David Fitzsimons said.

"Irish retailers need help and support in the form of training and information to take advantage of this growing market.

"We are calling on government to take proactive action in the form of Enterprise Ireland-style support for Irish retailers who have potential to internationalise their business and allow them bring some of the €510bn that will be spent online in Europe this year into the Irish economy," he added.

Media and entertainment was the fastest-growing category for Irish online spend last year, at 34.9pc, the Ecommerce Europe survey said. Spending on Home & Garden products grew 34.1pc.

The most popular category was clothing on which €560m was spent online last year, nearly twice the figure posted by media and entertainment in second place. Information technology was third most popular at €280m.

The survey said Ireland has three million users and 1.9 million of those use the internet to shop.

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