The brick-and-mortar grocery store is not going away. Recently, Amazon announced Whole Foods purchase for $13.7 billion. However, it appears last month only 7 percent US consumers shop online for groceries. Even people who tried or even gave up e-shopping or in the first place even avoided doing so cited many reasons and the top was picking out fresh items on their own, said a report by the NPD Group.
In fact, Amazon, using its Amazon Prime platform, already dominates this slice of food pie, for over 52 percent of online grocery shoppers.
But regardless of the barriers to adoption, online grocery shopping is anticipated to grow at a faster rate than cyber commerce areas that pioneered earlier.
Consumers to nearly 20 million and new are expected to be online grocery shoppers, current or lapsed to promote their virtual shopping for over the next six months for foods and beverages, as per the NPD Group report.
“Brick-and-mortar stores are very much alive, they need to step up their game,” says NPD food and beverage industry analyst, Darren Seifer. “There will be a large percentage of the population who will prefer shopping at brick-and-mortar grocers.”
Likewise, the supermarket industry is facing challenges, as companies such as Kroger post disappointing earnings and the possibilities of price wars looms with the entrance of Germany’s Lidl, that plans to have 100 stores in the US next year by this time, and the expansion of discount stores like Aldi, that plans 2,500 stores by 2022, up from 1,600.
Regardless of these challenges, Amazon’s move into the grocery business is “a ‘win-win’ for Whole Foods and Amazon,” says David Livingston of DJL Research.