Online grocery shopping has rapidly evolved from a convenience for a niche group of consumers into a core part of the retail grocery experience. Investments in digital commerce, payment platforms, and fulfillment capabilities positioned many grocers to meet unprecedented demand when consumer shopping habits changed almost overnight.
Albertsons’ strong sales growth highlights how grocery e-commerce became a critical driver of revenue, demonstrating that retailers with established online grocery shopping capabilities were better equipped to serve customers and capture long-term digital growth opportunities.
Grocery stores can barely keep up with consumer demand, both for in-store and online sales. Albertsons recorded an eye-popping 47% year-over-year sales increase for March and 21% comparable sales jump for most of April year-over-year. Another striking number is a 32% boost for online sales for its December-February fiscal quarter, which was not yet impacted by the pandemic. Albertsons and other grocers have spent millions for online order and pay platforms plus an extensive fulfillment infrastructure. Now those investments are paying big dividends and will carry over beyond the Covid-19 period. Many consumers will continue to use e-commerce as a go-to method for grocery shopping.
The following Supermarket News article reports more on this topic which is excerpted below:
Fueled by coronavirus-triggered consumer demand, Albertsons Cos. saw comparable sales surge in March and April, which followed a double-digit net sales gain in its fiscal 2019 fourth quarter ending in February.
Albertsons said Thursday that “significant increases” in shopper traffic, product demand and basket size in stores and online amid the COVID-19 outbreak hoisted identical sales. For the four weeks ended March 28, identical sales soared 47%, and that momentum continued with a 21% gain during four weeks ended April 25. Compared with a year ago, identical sales for the first eight weeks of fiscal 2020 are up 34%, the Boise, Idaho-based company reported.
Net sales and other revenue totaled $15.44 billion for the 13-week fourth quarter ended Feb. 29, up 10.1% from $14.02 billion in the 12-week fiscal 2018 quarter. Albertsons attributed the gain to the 2019 quarter’s extra week, which contributed about $1.1 billion, and a 1.8% uptick in identical sales, partially offset by lost sales from store closings. The company said the identical-sales increase reflects a negative impact of 30 basis points from the timing of the Thanksgiving holiday.
The rapid acceleration of online grocery shopping demonstrated the value of retailers’ investments in digital commerce, payment technology, and fulfillment infrastructure. While the pandemic served as the catalyst, many consumers have continued to embrace the convenience of ordering groceries online, making omnichannel capabilities a long-term competitive necessity.
As grocery retailers continue refining their digital experiences, investments in e-commerce platforms, integrated payments, delivery, and pickup services will remain critical to sustaining growth and meeting evolving consumer expectations.
Overview provided by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group.