Asda ‘most vulnerable to Morrisons online’

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Asda will be hit hardest when Morrisons launches its online offer, according to retail analysts CACI.

Research seen exclusively by The Grocer found 65% of Morrisons customers who shopped online currently shopped at Asda for groceries.

CACI suggests this means once Morrisons is online, Asda could face an exodus. “Morrisons customers who shop online are buying their groceries somewhere else - and the majority of them are shopping at Asda,” said Louise Etherden, principal consultant at CACI.

“If you look at the types of demographic that shop at Morrisons, they tend to be more traditional types who stick with their brand, so the opportunity is there for Morrisons to convert them when they come online.”

The high proportion of Morrisons customers shopping online at Asda was down to the geographical overlap of the two multiples, said Etherden.

“Shoppers tend to be focused around where the stores are. So while you can buy online from Asda almost anywhere, the people who shop with them online tend to be concentrated around the stores.”

CACI warned it wouldn’t all be plain sailing for Morrisons, however.

“Although it has a network of large stores that are better for supporting online, that network is heavily concentrated in the north,” said Etherden. “On the downside, we definitely see that certain demographic groups have a higher tendency to shop online. And, although not exclusively, they tend to be concentrated in the South East. So Morrisons will need large stores down south to maximise the opportunity.”

Morrisons is currently the only one of the big four without an e-commerce website. It purchased a 10% stake in US-based outfit Fresh Direct in April - a company described by Morrisons CEO Dalton Philips as the “world leaders in fresh food online” - to learn the online business, and is expected to launch a grocery e-commerce platform in 2013.

Elsewhere in the research there was good news for Sainsbury’s. IGD estimated in October that online grocery would almost double in size and value over the next five years, from £6bn this year to £11.2bn in 2016. CACI said Sainsbury’s was set to be the big winner.

“Behind Waitrose, Sainsbury’s has the second most internet-savvy customer base,” said Etherden.

“But the interesting thing is how the store network fits with that. Sainsbury’s has stores in areas where people are online savvy but aren’t shopping online. So Sainsbury’s is well placed to pick them up. They have big stores in the right places. So Sainsbury’s is strong where Morrisons might find a problem.”

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