DUBLIN, Ireland--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/research/f20789/united_kingdom_foo)
has announced the addition of the "United Kingdom Food and Drink
Report Q2 2008" report to their offering.
The United Kingdom Food Drink Report provides independent
forecasts and competitive intelligence on United Kingdom's food and
drink industry.
Executive Summary:
The battle between the UK's online grocery retailers fired up in
2008 after upmarket retailer Ocado, a partner of the John Lewis Group
launched an advertising campaign saying it could match market leader
Tesco's prices on all household brands. Tesco responded with its own
campaign that refuted these claims and invited consumers to check on
an independent price-comparison website. Tesco claimed that it sold
2,500 products at prices lower than Ocado and threatened to make a
complaint to the advertising standards authority if Ocado did not
withdraw the advert. The spat highlights the growing importance that
UK's retailers are placing on their online presence with the online
channel now contributing a significant amount of revenue to three out
of the big four supermarket operators.
Ocado is in a newly confident mood after the firm's directors
revealed that 2008 was expected to be the first year that the firm
operated at a profit. Founded eight years ago, the firm has posted
losses every year since it was created. Uniquely, the company operates
out of a huge warehouse, the size of seven football pitches, and
therefore has higher fixed costs than its rivals, such as Tesco and J.
Sainsbury, which use instore pickers to fulfil their online orders.
Ocado has had to invest huge sums - and operate at a loss for eight
years - to get this model to a point where it is about to break even.
However the unique approach means the company is able to offer
narrower delivery slots and a low number of products ever out of
stock.
The company is regularly ranked as the best online supermarket by
consumer magazines and its unusual logistical approach perhaps marks
it out as the biggest threat to the market leading Tesco, which would
face having to invest huge amounts of money and time to develop a
similar service.
Tesco is currently by far the biggest online grocery retailer,
processing around 300,000 orders every week, however, rumours have
emerged that the division performed relatively poorly in 2007 and lost
ground to its rivals. One firm which may have picked up Tesco's
customers is J. Sainsbury, which operates the UK's second-largest
online grocery business. J. Sainsbury has reported that its online
sales rose by 40% in 2007 and that it is now processing 90,000 orders
per week. Wal-Mart owned Asda is also investing heavily in its online
presence, however so far the firm has concentrated on selling non-food
items and its online grocery business still lags far behind those
offered by Tesco, Sainsbury and Ocado.
The only one of the big four retailers that does not have a
significant online presence is Wm Morrison and the firm's Chief
Executive has stated that the Morrison would wait at least 18 months
before deciding whether to take the business online - a long time when
the market is expanding so quickly and a decision that BMI believes
the firm may end up regretting.
Companies Mentioned:
- Tesco
- J Sainsbury Plc
- Asda
- Associated British Foods
- Dairy Crest Group Plc
- Diageo
- Cadbury Schweppes Plc
For more information visit
http://www.researchandmarkets.com/research/f20789/united_kingdom_foo
Research and Markets
Laura Wood
Senior Manager
press@researchandmarkets.com
Fax from USA: 646-607-1907
Fax from rest of the world: +353-1-481-1716
Copyright Business Wire 2008
