Rockville, Md., April 6, 2023 -- Online shopping grew rapidly during the COVID-19 pandemic as a way for consumers to get necessary food and beverage items but still avoid crowds at grocery stores. Convenience still reigned supreme as the primary reason for using grocery pickup and delivery services.
Although that convenience comes with a cost. Inflation has made more consumers hesitate to pay for convenience on top of already high grocery prices. This has left some startups in the online grocery space struggling. For instance,
e-commerce grocer Boxed just filed for Chapter 11 bankruptcy on Sunday. Near the end of last year, Boxed reported declining sales and growing losses. Thus, it is clear that Boxed was under pressure before the collapse of its primary bank (
Silicon Valley Bank) in March.
Other grocery startups in the pickup-only or delivery-only segment have also been reacting to slowdowns in their business and evaporating venture capital funding. For instance, quick delivery company
Gopuff announced a third round of layoffs after two cuts were announced last year, and Instacart laid off staff in 2022 as well.
Large brick-and-mortar grocers such as Walmart and Kroger
continue to expand their delivery options with new infrastructure to reach more customers as part of the hybrid “bricks and clicks” model. Many online-only outlets that provide additional features – such as online grocer
Hungryroot, which also provides meal planning services – are also growing, with some companies seeing record gains. Though Instacart has delayed its IPO, the company reported large gains in revenues and gross profits in Q4 2022, revealing that its third-party delivery services and company strategy have seen continued success.
Packaged Facts’ March 2023 National Online Consumer Survey found that 65% of consumers have ordered food and beverage groceries, meal kits, or prepared meals for pickup or delivery in the last 12 months. Of these, 41% use such services at least once per week. Despite slowdowns in growth after a pandemic boom of online grocery sales, Packaged Facts forecasts that gains in the online grocery market are expected to continue, with many consumers reporting increasing use of online services compared to a year ago.
Packaged Facts analyst Cara Rasch says, “As online grocery sales continue to grow and competition tightens, retailers are looking for opportunities to expand availability and to make grocery delivery and pickup more efficient and less costly. The future of online grocery will feature new technologies like drone and autonomous vehicle delivery, automated warehouses, intelligent voice ordering, virtual reality shopping environments, and better monitoring of product quality and stock.”
For more information, see Packaged Facts’ report
The Future of Grocery: Online Grocery, Meal Kits, & Direct-to-Consumer Food. An updated edition will be published in May 2023.
This report analyzes the dynamics of the current landscape of the online grocery market. Consumer demographics, perceptions, motivations, and behavior pertaining to online food and beverage sales and attitudes on food, diet, health, and product packaging are examined. Effects of the COVID-19 pandemic on consumers are also analyzed in a broad sense, as well as in the context of online grocery shoppers.
This report provides information about online retail sales of food and beverages to consumers in the following product categories:
- Shelf-stable foods and beverages in cans, bottles, or other packaging
- Meal kits and prepared meals
- Perishables such as fresh fruits and vegetables
- Dairy and egg products
- Meat, poultry, and seafood
- Bakery items
- Frozen foods
- Alcoholic beverages
This report includes online sales of the above items from:
- Store-based grocers (e.g., Kroger, Safeway, ALDI)
- Mass merchandisers (e.g., Walmart, Target) and warehouse clubs (e.g., Costco, Sam’s Club, BJ’s)
- Online-based grocers (e.g., Amazon, Thrive Market, Hungryroot)
- Brands that sell their own food products via their websites, direct-to-consumer
- Meal kit and meal delivery services (e.g., HelloFresh, Factor 75)
- Third-party pack-and-deliver companies that use their own workforce to purchase groceries at various stores and deliver them to customers (e.g., Instacart)
- Local co-ops and farmers’ markets that arrange for subscriptions, single orders, and pickup or delivery digitally
The reasons for, and implications of, shifts in consumer perception and behavior are analyzed in the context of present and future market opportunities.
Additionally, the report has dozens of tables showcasing numerical survey data on consumer demographics and psychographics and numerous marketing photographs. This report goes in-depth on COVID-19 trends affecting the food and beverage market.
Particular attention is dedicated to the market impact of e-commerce and the coronavirus pandemic.
About Packaged Facts
Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, the food and beverage market, consumer financial products and services, consumer goods and retailing, and pet products and services. Packaged Facts also offers a full range of custom research services. Reports can be purchased at our company website and are also available through MarketResearch.com.
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