It was only a few years ago, pre-pandemic, that U.S. online grocery orders made up about 3-4% of total sales. High-density countries like the U.K., Japan, and South Korea were seeing 7-8%. Fast forward to 2021, and U.S. mega-chains such as Albertsons are closing in on 10% of total sales.
With big investments by supermarket chains in their fulfillment infrastructure, mainly warehouses and delivery resources, it’s not far-fetched to imagine online sales to grow even more. Consumers mostly chose delivery fulfillment during the pandemic, and many will stay with that. Now the big online ordering boost is coming from curbside pickup which will be the primary driver of future sales growth.
The following excerpt from a Supermarket News article reports more on the topic:
Albertsons Cos. could see online grocery potentially reach 20% of sales, driven by stepped-up e-commerce investment and greater consumer affinities for digital shopping and eating at home following the COVID-19 pandemic, according to President and CEO Vivek Sankaran.
Boise, Idaho-based Albertsons stands as a “stronger company today than before we went into the pandemic early last year,” adding new customers and boosting shopper frequency and retention, Sankaran told Citigroup Global Markets analyst Paul Lejuez on Friday in Citi’s Retail Madness Virtual Conference.
“Over the last couple of years, just about every important capability in our company is now data- and technology-enabled, whether it’s the promotion engine, ordering, production, automation in DCs, etc. And we have more to do,” Sankaran said. “We’ve put a lot of money and energy into our digital transformation. We are excited. We’re going to roll out a whole new suite of customer-facing applications in April. We’ve been working on it through the year. Our e-commerce business has grown tremendously. We now have 1,400 locations with Drive Up & Go [curbside pickup]. We’ll get to 1,800 before this year is over. And we are aiming for two-hour deliveries in all our markets. That’s how we see that business going.”
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
