Britain's leading grocery retailers, with the exception of Safeway, are embracing Web home shopping and it is projected that at least 13 per cent of all grocery shopping will be via the Internet within five years.

Irish food and drink manufacturers and suppliers - who sell nearly 40 per cent of their produce, worth £2.1 billion (€2.7 billion), to Britain each year - should cash in on this trend and actively address Internet/home shopping, according to Bord Bia, which has just completed a study of Web home shopping in the British market.

Internet/home shopping is seen by most retailers as a significant development, the demands of which change constantly. Most still have limited geographic coverage, often limited to the south-east of England, although Tesco stated its intention of having 90 per cent coverage of the population by the end of last year. "Internet/home shopping is a high profile activity in all accounts and each is increasing manning levels with high calibre recruits to deal with the increasing workload and the strategic issues which they are facing," the report says.

"While buying in all cases still remains with the traditional `buying department', increasingly the Internet/home shopping team are having influence over range selection and the buying decision."

It says that little long-term planning is being done yet by retailers. For example, Sainsbury's, which was early into the market, announced a year ago that it was abandoning it because there was no demand - only to decide recently they were going national with an upgraded system.

The products initially bought by Internet/home shoppers were bulky things like big packs of toilet rolls, cans and bottles of water. Shoppers initially had concerns about the quality of perishable or delicate items like fruit, vegetables and meat.

"These concerns, however, evaporate once the system is tried and views are then reversed," the report says.

Orders are delivered within a two-hour window, which is not seen as constraining because deliveries tend to be made on time.

For retailers, they have to decide whether to opt for dedicated depots or picking stores to service Internet/home shopping, and some have opted for a hybrid of the two. Dedicated depots are viewed by most industry commentators as the ultimate in efficiency but allow a product range of just 7,000 to 10,000 lines of mainly regularly ordered, high-volume, bulky pre-packed items, with luxury items omitted.

Store-picking offers customers between 25,000 and 30,000 product lines, usually stocked in the retailer's stores.

There are two basic access models for shoppers: on-line, the system adopted by Sainsbury's, where shoppers remain on-line throughout the transaction, and off-line resident software systems, used by most of the other big operators. The former has the disadvantages of the telephone charge and the unreliability of Internet connections, while the other model allows retailers, such as Tesco, to supply shoppers with a CD that can be loaded onto their computer, allowing them to go on-line only when they are ready to place their order or to update stored information.

Women interviewed in eight focus groups in the south-east of England turned out not to be just the time-poor, cash-rich of the A and B social groups; the mass C1 market plays an important role. Almost one-third of the women reported in April last that they bought food or groceries from an Internet site, an increase of 22 per cent on the sampling carried out in December 1999. Average spend per basket was much higher than in a bricks-and-mortar store, at around £80, compared with an average of £30 when physically in the store.

The downside for retailers is that people don't browse and make impulse buys. Irish suppliers should capitalise on this new trend, Bord Bia suggests, and take steps to address the area. "Building business relationships with the Internet/home shopping area in each retailer should be established quickly. The `first one in' is likely to remain the trading partner as the business develops.

"Current suppliers should therefore approach the Internet/ home shopping management of the business in addition to their normal contacts, while suppliers, large and small, not currently trading with the retailers should consider approaching them with ideas or developments which could be implemented via Internet/home shopping," the report recommends.

Offering relevant products,such as special bulk packs, special occasion packs, new tailored concepts and ideas, new product areas and supplying customers products via the retailer's website are suggested.