The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.
The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.
Representative in Switzerland of the foreign funds registered with the Swiss Financial Market Supervisory Authority ("FINMA") for distribution in or from Switzerland to non-qualified investors is Robeco Switzerland AG, Josefstrasse 218, 8005 Zürich, and the paying agent is UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zürich. Please consult www.finma.ch for a list of FINMA registered funds.
Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco/Robeco Switzerland product should only be made after reading the related legal documents such as management regulations, articles of association, prospectuses, key investor information documents and annual and semi-annual reports, which can be all be obtained free of charge at this website, at the registered seat of the representative in Switzerland, as well as at the Robeco/Robeco Switzerland offices in each country where Robeco has a presence. In respect of the funds distributed in Switzerland, the place of performance and jurisdiction is the registered office of the representative in Switzerland.
This website is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, the publication or availability of this website is prohibited. Persons in respect of whom such prohibitions apply must not access this website.
Consumers shop more frequently online. This is putting pressure on traditional grocery stores, says Robeco trend watcher Steef Bergakker. But there are also companies set to benefit.
Online retail sales are advancing strongly. Digital items such as music, e-books are the main beneficiaries but other categories are also gaining ground. The only category where the penetration rate is still very low is the daily grocery shopping.
But this is going to change, says Robeco trends analyst Steef Bergakker. He expects online grocery shopping to snowball and this to have a significant impact on food retailers’ market shares. Existing grocery store chains will find the going tough, while specialized online players and smaller niche retailers will benefit. The global equity fund Rolinco and the Robeco Global Consumer Trends Equities fund are happy to use his analyses.
The advantage of online shopping is primarily the convenience of having items delivered to your home or to a collection point, says Bergakker. "You don't have to find a parking place, push around a shopping cart and then cram everything into your car."
Price and delivery slots have prevented online shopping from becoming widely accepted, but significant progress has been made in these areas. "Delivery slots are becoming far more accurate. Ocado now delivers within 60 minutes, for AH.nl it takes two hours. These are major improvements compared to a couple of years ago. Then you still had to be available for up to half a day to receive your delivery."
'More accurate delivery slots'
In addition, the price differences compared to physical shops are also going to disappear as a result of increasing economies of scale and heightened efficiency, expects Bergakker. “Especially if you all take the fuel costs for your trip to the grocery store into account. Up to now, people have assumed that it is expensive when compared to doing your shopping yourself, because of the high delivery costs."
The value offered by the online shops - a combination of convenience, the shrinking price differential and a huge range - will be the determining factor, he concludes.
In order to evaluate the potential market for online shopping, Bergakker makes a distinction between two types of grocery shopping - the stock-up trip and the top-up trip. The online market has as yet scarcely penetrated the stock-up trip market, but Bergakker expects this type to be vulnerable. It will be much more difficult for online players to gain ground in the top-up trip market.
The stock-up trip is a regular trip to replenish supplies, he says. “It is planned in advance and shoppers make lists. There is an interval between the time that something is purchased and the time that it is used. Items purchased are often non-perishables like tea, cat food and diapers."
Then there is the top-up trip, adds Bergakker. “A quick - ‘what shall we eat this evening? - trip to the store. Shoppers want inspiration, because they don't yet know what they are going to buy. They mostly purchase fresh products, or articles that they have forgotten, like toothpaste."
Online shopping's market penetration will increase rapidly, says Bergakker. “We estimate about 50% for urban areas in 2025, which is above the market consensus. If this proves to be the case, then we are talking about a market of USD 600 billion in Europe and the US."
'The stock-up trip will virtually disappear'
This optimistic forecast is based on the assumption that the stock-up trip will virtually disappear, says Bergakker. “We think that in urban areas these will have become completely unnecessary by 2030. Then we are talking about more than half the money that people spend on shopping and a penetration rate of around 25%."
The market for online shopping will grow more quickly than most analysts expect. “Investment analysts' forecasts are quite varied, but we feel that most are rather conservative. Goldman Sachs forecasts penetration of 10% for the US in 2025. This amounts to a market of around USD 120 billion.”
‘Faster growth than analysts expect’
After years of modifications, some online stores have managed to make their business models profitable, says Bergakker. Investors tend to overlook the importance of this. He gives two examples of successful listed online retailers. “Two parties really stand out. The first is US company Amazon, which has been running pilot programs for years for stock-up products. The company only recently decided to roll-out its online shopping service to twenty cities in the US. They have mastered the online business model."
The other company is the British firm Ocado, the biggest pure play online retailer in the country, says Bergakker. "They are now making profits for the first time with their business model - a highly automated distribution warehouse where the boxes of shopping are packed."
“They are going to roll out their online model with other retailers. And have recently concluded an agreement with British retailer Morrison , which up to now has had no online presence. They have purchased Ocado's online model off the shelf.” Other parties will find it increasingly difficult to avoid having an online service, he predicts. “The possibility of buying an off-the-shelf online model acts as an extra stimulus."
Investors underestimate the negative effects of online growth on grocery store chains, thinks Bergakker. “It is true that traditional players such as Ahold and Tesco are trail-blazers when it comes to online shopping, but they are experiencing reduced sales in their physical shops, leading to stagnation in their consolidated net turnover.”
It is hard to effectively combine online and physical sales as they both have a totally different operational process and growth profile. “Hypermarkets and XL grocery stores will find it particularly difficult. They existence is largely dependent on stock-up trips but this basis is being progressively eradicated. Even though parties such as Ahold recognize that this is a problem, it is still difficult to close shops. It’s not just a matter of the unused real estate; there are also consequences in terms of personnel and logistics."
The top-up segment can be more effectively targeted with a convenience-store-on-the-corner formula. “For example, a range of fresh goods and ingredients to prepare an evening meal with a limited selection of products that you may need at short notice. These shops fulfil more or less the same role as the old grocery shop on the corner. They have a smaller surface area and are closer to the end customer."
“This creates opportunities for specialized retailers with small shops such as The Fresh Market in the US.” I think that online grocery shopping will quickly become the norm, he concludes. "Certainly once price is no longer an issue."
This publication is intended to provide investors with general information about Robeco’s specific capabilities, but it is not a recommendation to buy or sell specific securities or investment products.