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Will the Online Grocery Surge Have Legs?

foodprocessing 2020-03-26
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online grocery shopping is getting a huge boost that may well persist, at least to a lesser degree, after the coronavirus crisis is over.

Instacart, the home delivery service that uses its own shoppers to pick orders, announced March 23 that is seeking to hire 300,000 more workers; it currently has about 200,000. Nielsen estimates that e-commerce for consumer packaged goods rose 91% year-over-year for the week ending March 14.

A rise in online shopping is one aspect of a general increase in the fortunes of retailer grocers – or at least, they’re being somewhat buffered so far against the general economic downturn. Shares of Kroger are down only 4% so far, compared to 23% for the S&P 500, according to the Wall Street Journal. Giant grocers like Kroger, who already have infrastructure and marketing vehicles for e-commerce, will be best able to benefit from its growth in the coronacrisis.

But the situation is not all rosy, even for those big players, the Journal speculates. Food processors will face even more intense competition to get their products virtually “slotted” with grocers and online services. E-commerce also gives consumers greater ability to comparison-shop, which has the potential to drive processors’ prices and margins down.

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