From Bloomberg this morning:
"The Covid-19 outbreak super-charged online grocery shopping, prompting industry watchers to declare that the habits of millions had forever changed. In fact, it’s a little more complicated than that. Yes, Walmart Inc., Kroger and other chains picked up millions of new online customers - generating additional revenue and persuading even skeptical executives to expand their digital operations. But holding onto these shoppers is hardly a foregone conclusion - especially older ones like Crowell, who are already reverting to pre-pandemic behavior.
"That’s bad news for web grocery specialists like Instacart Inc., which processes orders and deliveries for thousands of supermarkets and has helped almost 300,000 senior customers figure out how to use its service. It’s also not great for brick-and-mortar food retailers because shoppers spend considerably more when they buy groceries online than when they have to lug everything home themselves. And there are more seniors online than you’d think: More than three in 10 people age 60 or older shopped for groceries online in April, according to consultants Brick Meets Click and Mercatus, and the number of seniors using Instacart last year rose faster than any other age group.
"Almost half of Baby Boomers surveyed by Morgan Stanley said they’ll continue to grocery shop online at the same rate they did during the outbreak … But the number of seniors using web grocery regularly declined by 25% in April compared with the previous year, Brick Meets Click and Mercatus found, the biggest drop of any age group by far."
- KC's View:
There's an interesting dissonance here. A lot of grocers for years decried the e-commerce trend, believing that groceries would be the exception to the rule and avoid the shifts that affected virtually every other retail segment. But now, discovering that there are some advantages to e-grocery, companies like Albertsons and Kroger are developing services to make it easier, especially for seniors, to stay online; companies also are investing major dollars in distribution systems - like CFCs, MFCs, and dark stores - that will enable and streamline the e-grocery sector.
Despite the drift away from e-grocery by seniors, I actually don't think there is a lot to worry about.
First of all, the very nature of being a senior citizen (I'm trying to find a way to say this gently) means that the drift is temporary. At some point, it becomes less possible to go easily go to the store, in which case online habits cultivated during the pandemic may be re-adopted. And, at some point, senior citizens stop shopping.
Younger people, on the other hand, that have continued to embrace e-grocery, won't abandon those habits as they move into the senior citizen category.
And, we'll continue to watch the likes of Amazon and Walmart working hard to drive growth in the category.
There may well be some backing off of e-grocery growth as the pandemic recedes, but the broader trend will be expansion of the sector.