Shoppers are more prepared to do their shopping online than ever before. Retailers must seize the opportunities the internet offers

Seven years after the bubble that saw investors catch a cold from ploughing their cash into internet-based companies, we think the web-based revolution has finally begun. Over the road in general retail, Ideal Shopping has been bid for, and online fashion store ASOS's share price performance has been stellar.

With today's youth logging on more often than they turn on the TV, how are grocery retailers positioned? And should they get more aggressive in weaving their webs?

Internet retailing has genuinely arrived and the key to it has been broadband. Gone are the days when it took an age to order, the site was clunky and hard to navigate, and half the time the computer crashed just as the mouse arrow hovered over the 'pay' button.

Fifty-one per cent of UK households now have broadband access - up from 40% in 2006.

At the same time website design is more sophisticated and the speed, ease and reliability of browsing are much improved. Customers are more relaxed and computer-friendly than they have ever been. According to ASOS, 51% of 16 to 24-year-old girls buy clothes online every month. It seems they are happy enough to buy clothes without even trying them on. Is the UK ready to start buying much more of its food without touching it first?

We think the answer is yes, and that food retailers that do not have credible web offers are missing a trick. The argument has long been that customers would react badly to the idea of other people picking their fruit and veg for them, and that people preparing a dinner party would have coronaries when the jugged hare was mispicked and they received hair gel.

This may well be true. But there are an awful lot of items that food retailers sell that are not so emotive or time-sensitive. Bulky, non-perishable items such as toilet roll and dogfood are perfect internet fodder. So, as we get more web savvy, it stands to reason that these sort of non-value added orders will gradually switch to online.

Tesco, Sainsbury's and Waitrose and Ocado all have credible, growing web- based businesses. The former is taking on Argos, too, in the non-food arena. We would urge Asda and Morrisons to stop dragging their feet. Brand loyalty will exist in the virtual world just as it does on the high street. Losing brownie points now could have long-term consequences.n

Jonathan Pritchard

is a partner at

Oriel Securities