Online Grocery delivery.

Grocery delivery was once considered a luxury service for affluent suburban buyers who could afford to order several bags of produce. But a year after a large part of the country closed with door-to-door orders, industry analysts say food supplies in major stores have exploded and are likely to continue.

Restaurants have been robbed by the pandemic. According to the online booking service OpenTable, admissions and bookings fell 100% between April 2019 and April 2020 as the coronavirus swept the country. By the end of August 2020, more than 32,100 restaurants had closed, of which about 61% have closed permanently, according to a local business report from Yelp.

At the same time, home cooking is experiencing a cultural revival. People made their own sourdough bread, experimented with “soft” or Dalgona coffee, made their own canned vegetables and cooked carrots flavored with bacon. It has helped break the monotony of pandemic life for those stuck at home, but it has also allowed online delivery to more than triple its share of total grocery sales compared to 2019, according to a report by food market research firm Brick Meets Click 2021.

Walmart’s e-commerce sales in the United States grew 69% between 2019 and 2020, according to the company’s annual report. The new Walmart + loyalty program includes free shipping designed to increase online sales, Walmart CEO Doug McMillon said on a conference call in February. According to the company’s annual report, Kroger’s delivery business grew 150% in 2020 from the previous year. It has grossed over $10 billion in total online grocery sales, including delivery and collection. By the end of 2023, Kroger plans to double its digital activity compared to 2020.

But the cost of delivering groceries to grocers and consumers can be high. Order pickers are paid by the hour to walk the aisles and pick up items for online orders, a process that can be costly for a food business.

Grocery stores were designed for individual shoppers, not order pickers who process dozens of orders every hour. While supermarkets have improved their space during the pandemic to meet new demand, there is little room left to expand service without much effort.

But it would be much more expensive to ditch online delivery than to waste a few dollars on an order. Safeway FreshPass subscribers get free shipping on orders over $30. Kroger orders over $35 are also free. Amazon Whole Foods orders were free to all Prime subscription buyers, but Amazon recently announced to customers that a $9.95 delivery charge will be introduced in several regions, including Boston, Chicago and Portland.

Lawrence Hene, product manager at Ocado Solutions, the online grocery retailer, said grocery wholesale is a high volume, low margin industry and the complexity of online service has long made it so. For many grocers who tend to be an unprofitable channel, more and more costs are imposed on their stores to meet e-commerce demand.
In April, Kroger partnered with Ocado to open the nation’s first fully automated distribution center in Monroe, Ohio, designed to fill an order for 50 items in just five minutes. More than 1,000 robots roam the 375,000 square meter facility to collect food. Most deliveries are packed in a Kroger delivery truck, which is dropped off within 90 miles of the facility the next day. The company plans to open up to six more shipping centers in the United States between 2022 and 2023, it announced in March.

Online shoppers are 1.5 times more likely to visit online stores and sites and spend more than twice as much as those who are only in the store, she said. Kathryn Turner, who lives in Raleigh, North Carolina, told NBC News that she has gone from casual online grocer to regular grocer.
Although her grocery bill has gone up in part because she doesn’t visit stores to see sale items or offers that aren’t available online. She said it was worth it.

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