QoD: What percent of overall grocery purchases are ordered online?

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Feb 10, 2019
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Budgeting, Research, Question of the Day

Answer: 3%

Market share of largest online grocers in 2017 (Supermarket News)

  1. Amazon - 12.5%
  2. Walmart - 11.1%
  3. Kroger - 6.4%
  4. BlueApron - 5.5%
  5. Peapod - 5.3%

Questions:

  • Why do you think the number of people purchasing groceries online is so low? What is different about groceries compared to electronics or apparel which have much higher percentage of online sales? 
  • What are the advantages and disadvantages of purchasing groceries online? Assume that most services charge a fee of $8-$10 per delivery in your answer. 
  • Does your family purchase groceries online? If so, what items do you typically purchase online? If not, why not?
  • Do you think that ordering groceries online will cause you to spend more than you would if shopping at a grocery store? 

Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.

 

Behind the numbers (Atlantic):

Twenty-two percent of apparel sales and 30 percent of computer and electronics sales happen online today, but the same can be said for only 3 percent of grocery sales, according to a report from Deutsche Bank Securities....Until online grocery-delivery companies are delivering to hundreds of homes in the same neighborhood, it will be very hard for them to make a profit. Though it is an $800 billion business, grocery is famously low-margin; most grocery stores are barely profitable as it is. Add on the labor, equipment, and gas costs of bringing food to people’s doors quickly and cheaply, and you have a business that seems all but guaranteed to fail. “No one has made any great amount of money selling groceries online,” Sucharita Kodali, an analyst with Forrester Research, told me. “In fact, there have been a lot more people losing money.”

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About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.