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Data for today’s episode is provided by Mercator Advisory Group’s report – U.S. Online Grocery Shopping Takes Off but Remains a Challenging Channel
Grocery stores surprising competition from… restaurants?
- Over half of household meals take place in restaurants as dine-in or takeout
- Consumers now spend 94% more annually on eating out than they did in 2003
- In 2016, $800 billion was spent eating out in the US
- The eat-at-home share has decreased from 54.6% to 49.8%
- Grocery stores are under pressure from:
1) Fast Casual and QSRs
2) New entrants (think Trader Joe’s)
3) Weak pricing power
4) Online channels increasing costs
5) Crowded existing market!
About the report
Driven by growing consumer e-commerce and advances in grocery order fulfillment, U.S. online grocery sales continue to increase to record levels. National and regional grocery chains are making major investments in technology and delivery resources to address this online sales channel. A new research report from Mercator Advisory Group, U.S. Online Grocery Shopping Takes Off but Remains a Challenging Channelassesses current industry challenges and opportunities as well as future considerations and implications for the grocery industry.
“Consumers want convenience and immediacy in their everyday shopping routines. Grocers have been late to the online party, but now they are going all out to support customers that prefer online shopping. But grocery order fulfillment is labor intensive and last-mile delivery is expensive, so the online channel will be financially challenging for grocers.” commented Raymond Pucci, Director, Merchant Services at Mercator Advisory Group, the author of this report.
This report is 14 pages long and has 4 exhibits.
Companies mentioned in this report: Ahold Delhaize, Albertsons, Aldi, Amazon.com, BJ’s Wholesale Club, Costco, Food Lion, FreshDirect, Instacart, Giant, Hannaford, H-E-B, Kroger, Lidl, Market Basket, Peapod, Postmates, Publix, Sam’s Club, Shipt, Smart & Final, Stew Leonard’s, Stop & Shop, Target, Trader Joe’s, Walmart, Wegmans, and Whole Foods.