Retail

Online Grocery Predicted To Hit $100B In Five Years

Online Grocery

With a faster pace of adoption than previously expected, the majority of U.S. grocery shoppers may purchase at least some of their groceries online within five to seven years, according to a Food Marketing Institute and Nielsen report, CNBC reported.

“There is a fundamental shift in retail, and we are seeing an acceleration,” said Thom Blischok, global retail strategic advisor to Nielsen. “You can now find the basics of living online pretty easily.”

According to researchers’ estimates, 70 percent of shoppers will purchase some portion of their groceries online within five to seven years. Previously, both organizations believed it would take up to a decade for consumers to become interested in buying their groceries online.

Their spending could reach $100 billion, greatly impacting grocery shopping in brick-and-mortar stores. Still, consumers are expected to make 80 percent of their grocery spending offline.

The report comes as Amazon has seen its online grocery sales increase following its acquisition of Whole Foods Markets. The grocer’s private-label brand aided sales at Amazon’s online grocery delivery service, AmazonFresh, which were up 35 percent to $135 million in the last four months of 2017, the Wall Street Journal reported.

While Amazon sold an estimated $11 million of Whole Foods’ 365 Everyday Value natural and organic products last year — and $1.6 million in its first month of carrying Whole Foods products — the eCommerce site’s private-label grocery sales remain relatively small compared to supermarket chains.

Beyond Amazon, Walmart announced in 2017 that its customers would be able to pick up their online grocery orders at 1,100 locations by the end of the year, and that number is expected to nearly double in 2018. The retail giant grew its total eCommerce sales by 62 percent in the first half of its fiscal 2018 year, and it expects growth to be around 40 percent for the full year. This total includes non-grocery categories through the benefit of its acquisitions, especially its purchase of Jet.com.

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