Australia Online Grocery Delivery Market Size, Share Analysis and Forecast Report (2024-2032)

Australia Online Grocery Delivery Market Trends

The Australia online grocery delivery market is thriving due to its convenience, allowing customers to place orders anytime without the need to travel, accommodating their busy lifestyles. It saves time through quick searches and simple scheduling. Moreover, online platforms offer a broader selection of products and make price comparisons easy, enabling customers to find specific items and manage their budgets efficiently. As of January 2024, the ABS reported that Australia had approximately 25.21 million internet users, representing about 95% of the population. This growth further boosts the Australia online grocery delivery industry revenue, as the increase in mobile internet users prompts grocery services to improve their apps and websites for convenient, on-the-go shopping.

Online grocery services offer tailored recommendations based on previous purchases, enhancing the shopping experience and aiding customers in discovering new products. Furthermore, online shopping encourages more deliberate purchasing decisions, enabling customers to adhere to their lists and reduce impulse buys typical in physical stores, thereby increasing demand in the Australia online grocery delivery market. In February 2023, Coles Group, operating over 800 supermarkets in Australia, deployed the Bringg delivery management platform to enhance its home delivery operations. This solution simplified delivery allocation to carriers and enabled real-time tracking of deliveries.

Australia Online Grocery Delivery Market Growth

The Australia online grocery delivery market is flourishing due to improvements in mobile apps and delivery platforms, which have made the shopping experience more efficient and user-friendly. Furthermore, retailers are providing a broader selection of products and implementing promotional strategies, such as exclusive deals and loyalty programs, to increase online grocery delivery demand and draw in more customers. Coles partnered with Flybuys to offer a loyalty program that enabled customers to earn points for every dollar spent. These points could be redeemed for discounts, rewards, and exclusive offers. Customers collected 1 point for every $1 spent while shopping in-store or online at Coles supermarkets.

The Australia online grocery delivery market is growing due to a focus on sustainability, including reducing plastic use and optimizing delivery routes, which attracts environmentally aware consumers. Additionally, grocery retailers are partnering with delivery services to improve logistics and efficiency, enhancing customer satisfaction, and further driving Australia online grocery delivery industry growth. Woolworths has established ambitious targets for the coming decade, aiming to convert all their brand packaging to recyclable, reusable, or compostable materials by 2023. They plan to cut the use of new (virgin) plastic packaging by 50% by 2024 and include an average of 60% recycled content in their packaging by 2025.

Australia Online Grocery Delivery Market Insights

• According to the USDA, the Australian consumer food service sector was valued at approximately A$60 billion (US$44 billion) in 2021.
• The USDA reports that supermarket and grocery expenditures constituted the largest segment of food retail purchases in 2021, accounting for 66 per cent of the total.
• Industry reports indicate that e-commerce user penetration is projected to reach 65.3% by 2024 and increase to 84.4% by 2029.

Industry News

September 2024

Coles launched a $400 million "dark supermarket," marking an Australian first. The supermarket opened a customer fulfilment centre in Victoria, capable of handling 10,000 online shopping orders daily. Hundreds of Australians worked there alongside 700 robots, which scoured the 87,000 square meter facility and could pack 50 items in just five minutes.

April 2023

Coles partnered with Uber Eats to provide the largest national on-demand grocery service to Australian households. This collaboration aimed to enhance convenience for customers, enabling them to access a wide variety of grocery items quickly and efficiently through the Uber Eats platform.

Australia Online Grocery Delivery Market Drivers

Technology Integration

The Australia online grocery delivery market is experiencing growth due to technological advancements. Retailers are increasingly utilizing artificial intelligence and machine learning to enhance customer experiences, personalize recommendations, and optimize inventory management. User-friendly mobile apps are making it easier for customers to browse, order, and track deliveries. Trends in the Australia online grocery delivery market are being driven by automated fulfilment centres and robotics, which enhance logistics efficiency and reduce operational costs. This technological integration is essential for meeting the growing consumer demand for speed and efficiency in grocery delivery services. For instance, Out of Our Own Backyards specializes in delivering organic produce from local farms, using technology to manage orders and logistics effectively, ensuring freshness while supporting local agriculture.

Growth of E-Commerce

The Australia online grocery delivery market is being propelled by the rapid growth of e-commerce sector. An increasing number of consumers are turning to online shopping, particularly as the shift to digital channels has accelerated. Consequently, grocery retailers are investing in their online platforms to enhance user experiences, provide exclusive promotions, and improve delivery options. The growing adoption of smartphones and internet accessibility further strengthens this trend. As more Australians become comfortable with online shopping, the demand for the Australia online grocery delivery market is projected to increase. According to the Australian Bureau of Statistics (ABS), the e-commerce retail sector accounted for 41.5% of the increase in value added by digital activities in Australia during the 2020-21 period.

Opportunities in the Australia Online Grocery Delivery Market

Sustainability Initiatives

The Australia online grocery delivery market is being enhanced by a growing emphasis on sustainability. Retailers are embracing eco-friendly practices, including reducing plastic packaging, optimizing delivery routes, and sourcing products locally. Many are transitioning to recyclable, reusable, or compostable packaging to attract environmentally conscious consumers. As awareness of environmental issues rises, retailers that emphasize sustainability are likely to gain a competitive advantage in Australia online grocery delivery market revenue. Coles has introduced several sustainability initiatives aimed at minimising food waste and using recyclable packaging. They offer reusable crates for grocery deliveries to reduce single-use plastics and are dedicated to making all Own Brand packaging 100% recyclable, reusable, or compostable by 2025.

Market Restraints

The Australia online grocery delivery market faces several key restraints. Logistical challenges complicate deliveries, especially to remote areas, increasing costs and affecting service quality. High competition among major supermarkets and startups can lead to price wars and reduced profit margins. Consumer trust issues related to data security deter potential users, while inadequate infrastructure hampers efficiency.

Changing consumer preferences may shift back to in-store shopping, complicating retention efforts. High delivery costs can limit usage, and navigating regulatory compliance poses additional hurdles. Lastly, limited consumer education about online services may hinder market growth, necessitating investments in awareness and marketing.

Australia Online Grocery Delivery Industry Segmentation

“Australia Online Grocery Delivery Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Product Type

• Breakfast and Cereal
• Household and Cleaning Products
• Beauty and Personal Care
• Baby Food and Care
• Pet Food and Care
• Fresh Produce
• Snacks and Beverages
• Staple and Cooking Essentials
• Others

Market Breakup by Distribution Channel

• Hypermarkets/Supermarkets
• Convenience Stores
• Online Channels
• Others

 Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Online Grocery Delivery Market Share

By Product Types Analysis

The Australia online grocery delivery market increases convenience for pet owners by enabling them to order food and care products from home, thus saving time. Customers enjoy a broader selection of brands and speciality items, including organic options that may not be found locally. Trends in the Australia online grocery delivery market include subscription services that guarantee regular deliveries, which help avoid shortages of essential supplies. Moreover, online platforms simplify price comparisons, enabling consumers to easily find the best deals available. In March 2024, Lyka Pet Food opened a USD 16 million manufacturing facility and national distribution centre in Dandenong South, Victoria. The facility created over 100 jobs and featured advanced, automated equipment, enhancing product distribution, and improving delivery times across Australia.

The Australia online grocery delivery market simplifies access to fresh produce, enabling consumers to order fruits and vegetables, including local and organic options, without visiting multiple stores. It also offers convenience by allowing customers to avoid crowds and long checkout lines, streamlining the shopping experience. Many retailers focus on sourcing high-quality produce from local farms, ensuring freshness and superior taste. Customers can personalise their orders based on preferences and dietary needs, driving the online grocery delivery demand growth. Gourmet Garden specializes in delivering organic herbs and vegetables sourced from Australian farms, prioritising both quality and sustainability. Their services address the increasing demand for organic produce, offering customers easy access to fresh, farm-sourced food.

Australia Online Grocery Delivery Market Regional Insights

The Australia online grocery delivery market varies regionally, with New South Wales leading in size and demand for quick services. Victoria emphasizes sustainability and local sourcing, while Queensland shows rapid growth in fresh produce preferences. In South Australia, online grocery services are growing, especially in Adelaide, with a focus on local sourcing.

According to the most recent data, internet penetration rates across Australia differ by region: New South Wales has about 90% access, Victoria around 89%, Queensland approximately 87%, Western Australia 85%, South Australia 84%, Tasmania 83%, Northern Territory 75%, and Australian Capital Territory 94%. Urban areas typically exhibit higher connectivity levels. As more households acquire reliable internet access, the demand for online grocery delivery is anticipated to rise, encouraging retailers to invest in technology and enhance their service offerings. Improved connectivity also fosters innovative solutions, like personalized recommendations and efficient logistics, further contributing to the growth of the Australia online grocery delivery market.

Competitive Landscape

The key players in the Australian online grocery delivery market serve retail, food service, and manufacturing sectors. They prioritise innovation and customization, crafting unique flavours to match consumer preferences. By responsibly sourcing ingredients, these companies ensure quality and sustainability, promoting healthier, more natural options for customers.

Key Industry Players

Nestlé SA: Founded in 1866 and headquartered in Vevey, Switzerland, it is a global leader in nutrition, health, and wellness products. The company offers a diverse range of food and beverage products, including infant formula, coffee, dairy, and pet care items.

The Coca-Cola Company: Established in 1892 and based in Atlanta, Georgia, it is a leading global beverage manufacturer. Renowned for its flagship soft drink, Coca-Cola, the company produces a wide variety of non-alcoholic beverages, including juices, teas, and bottled water.

Unilever plc: Founded in 1929 and headquartered in London, United Kingdom, it is a multinational consumer goods company. It specializes in products spanning food, beverages, cleaning agents, and personal care, with a strong emphasis on sustainability and social responsibility.

Procter & Gamble Company: Established in 1837 and headquartered in Cincinnati, Ohio, it is a leading consumer goods corporation. The company produces a wide range of products, including personal care, cleaning, and health items, and is known for its strong brand portfolio.

Other key players in the Australia online grocery delivery market report include Mondelez International, Inc., Mars, Incorporated, The Kraft Heinz Company, Danone SA, Kellogg's, Inc., and General Mills, Inc. among others.

Recent Developments

September 2024

An Australian first opened its doors, potentially transforming online grocery shopping. Coles launched its inaugural Customer Fulfilment Centre (CFC) in Truganina, Victoria, serving a wide area. Another CFC opened in Wetherill Park, Sydney, shifting grocery deliveries from stores to these centres.

October 2022

Spryker, a top platform for Enterprise Marketplaces and Unified Commerce, released its ‘Australian Online Grocery Report 2022.’ Research involving 2,500 Australian consumers revealed that nearly 48% purchased some groceries online, with 10% ordering most or all of their groceries digitally, accounting for 23% of household food budgets.