Growth in online supermar­kets puts pressure on the supply chain

Online grocery shopping continues to grow in the Netherlands. Still, not every player is benefiting from that growth. The market is expanding less rapidly than before, putting profitability increasingly in the spotlight. According to RaboResearch, online grocery shopping has become a permanent part of daily life across Europe. In the Netherlands, 4 to 9 percent of supermarket sales now take place online.

Online grows faster than supermarket market

Between 2015 and 2020, online grocery shopping grew rapidly. The Covid period added another boost to that growth. Demand then declined slightly for a period, but online sales are once again growing faster than the supermarket sector as a whole.

Rabobank expects the online share in the Netherlands to approach 10 percent within the next few years. As a result, physical supermarkets continue to lose ground. According to the researchers, consolidation in the supermarket sector is therefore continuing. That could lead not only to the disappearance of supermarket brands, but potentially to store closures as well.

Pressure on margins increases

As growth levels off, retailers are taking a closer look at margins. Profitability in online grocery delivery remains limited, even for major players. Scale and delivery density remain important for spreading costs. Still, those factors alone are not enough. Automation, market density and consumer behavior also play a key role.

Supermarkets are therefore focusing more heavily on using existing capacity more efficiently, setting realistic delivery fees and working more closely with suppliers. Click-and-collect is also receiving more attention. In addition, companies are trying to generate extra revenue through retail media, platforms and expansion of non-food assortments.

Market becomes more concentrated

The online supermarket market is already more concentrated than the traditional supermarket sector. According to Rabobank, that trend is expected to continue. For some retailers, profitability remains difficult to achieve. Partnerships with delivery platforms may then offer an alternative. In particular, neighborhood stores and specialized retail formats can maintain an online presence without major investments.

RaboResearch ultimately expects that two or three companies per country will handle the majority of online grocery deliveries.

Rabobank.nl