Online Grocery Shopping Is NOT Failing

The Lempert Report
November 22, 2016

I'm angered by the webinar where a survey of 1,000 consumers has garnered so many headlines that TABS Analytics CEO Dr Kurt Jetta concluded that "online grocery is failing."

Yes, he found that "just 4.5% regularly purchased food and beverages online,” and yes, that is a fraction of 5.32 trillion dollars of overall grocery and foodservice sales; which translates to annual sales of $223,440,000, that in itself is significant.

IRI at the same time released its report Playing to Win in the Rapidly.

Evolving Omnichannel Ecosystem estimating that online food and beverage sales accounted for just 0.3% of food and beverage retail sales in 2015 and are predicted to account for 2.7% in 2020 and 5.5% in 2022.

Jetta’s argument is that online grocery is not a sustainable model. I’m not sure that Instacart, Amazon and grocers who are doing online grocery correctly, and reporting new business through new customers, would agree.

Nor do I.

While it can be argued that no one is producing a profit just yet on online grocery sales, this channel is in it’s infancy, as is the technology that is being used both in-store, in warehouses, in delivery and by the consumer to order their foodstuffs. We are in the dawn of online grocery. Just imagine what our lives would be like today if people would have made the same dire predictions and calls to pull the plug on the Palm Pilot; there would be no iPhone. Imagine that.