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How Much Has Online Grocery Shopping Increased?

By: Author Jeff Campbell

Posted on  - Last updated:

Categories Operations, Grocery Delivery & Pickup

Online Grocery shopping is increasing at an impressive rate. It’s not only more convenient, but it can save us a ton of time, and the fees are usually quite small. We know more and more people are switching to online grocery shopping, but how much has online grocery shopping increased in 2021?

Online grocery shopping increased by 137% during 2020 and over 50% more in 2021. In fact, most grocery retailers saw 8 year’s worth of online shopping orders just during the 12 months of 2020.

But will that trend continue?

Are people still doing some in-person shopping? What is the future of traditional retail grocery stores? In this article, we’ll get into all of that and more.

Let’s get started.

Ready to order from Instacart? CLICK HERE to get started with your order!

What percent of groceries are bought online?

10.2% of groceries are now purchased online for either pickup or delivery, an increase of 137%. Prior to 2020, 4.3% of total grocery sales were bought online. 

As you’ll expect, online grocery shopping is increasing at an impressive rate. It’s been increasing for some years, and it experienced a spike due to all the changes that happened in 2020.

But even without the concerns of 2020, online shopping is convenient and, overall, cheaper.

If you factor in the cost of going to and from a grocery store, the opportunity cost, and the time involved, online grocery shopping saves you a great amount of time and effort. So, the increase would have occurred even without the lockdown, even though the growth rate may have been lower.

To have a good appreciation of the percentage of groceries bought online, it’s helpful if we looked at the pre-lockdown data before we look at the current year’s. According to a report by Mercatus and Incisiv, the following are the pertinent figures. (source)

  • 40% of consumers surveyed said they’d continue buying online, even after 2020’s issues are in the past.
  • Online grocery orders will grow by 12.5% during 2021.

I can attest when my family and I were at Whole Foods Market on Christmas Eve that at 10 am, the store was practically empty.

I’ve worked at several Whole Foods stores on Christmas Eve for dozens of years, and trust me; they are never that quiet. But the Amazon Fresh order area was bustling!

It’s interesting to also look at the main demographic that are shopping online and the main things being bought online.

Surprisingly, middle-aged males are the key demographic. And, most shoppers were buying staple pantry products. Rice and canned food items were the first products; spices came next, followed by beverages.

As you’ll expect, fresh produce came last. After all, most people would like to access their quality before they buy.

Is grocery pickup or delivery more popular?

Online grocery delivery is far more popular than pick up with delivery growth being 69% while online order pickup only grew by 17%.

It’s safer, cheaper, and more convenient (for shoppers and even grocery stores). Delivery also works great for many consumers who don’t have cars or who don’t like driving. Both reduce in-store traffic and generate more revenue for grocery stores. So, we can expect that they’ll only continue to get more popular.

(source)

So, both grew. And, the fact that delivery is growing at a higher rate makes perfect sense.

The higher increase in delivery is fueled in part by the growth of Instacart, seeing as it has partnered with hundreds of grocery stores to handle delivery for them. Its growth is also fostering healthy competition as some grocers develop their own delivery systems.

Research by Brick Meets Click also shows that ¾ of shoppers prefer delivery to in-store pickup. The firm is convinced that Click and Collect would also continue to play a significant role, as some shoppers choose that option. (source)

But is Instacart the top online grocery ordering company?

This is what I explored in a recent article of mine, where I compared Instacart and Mercato. Instacart and Amazon Fresh do currently dominate the online grocery delivery and pickup world, but Mercato is up and coming. And they have 1 key advantage that Instacart doesn’t.

Just click the link to read it on my site.

Are fewer people shopping at grocery stores now?

Yes, 73% fewer people are shopping at grocery stores. With online grocery delivery and pickup having increased 137% during 2020, that naturally means many people are no longer visiting their favorite grocery stores in person.

In fact, a survey by C+R Research shows that folks are fearful. 73% are making fewer trips to the stores.

46% of the people surveyed said they’re now buying in bulk. 45% say they even disinfect groceries when they get home! 45% are shopping more, while 37% are leveraging delivery. And, 60% say they feel a sense of anxiety while engaged in in-store shopping. (source)

The change reflected by the stats is natural and understandable in light of the change we’re all experiencing. Shopping used to be a lot of fun for a lot of people, especially women. After all, there were no health concerns to contend with.

Now, a lot of people are using online delivery.

But has all this increase caused Instacart deliveries to become slower as demand backs up?

That’s what I explored in a recent article of mine. Unfortunately, the demand has impacted their speed and reliability. But there’s 1 way to use them that will almost assuredly get you your orders on time.

Just click the link to read it on my site.

What are the online grocery shopping trends?

Online grocery shopping trends include an increase of 137% during 2020, but also more men are now actively purchasing for the family, and men’s purchasing patterns are different from women’s. Men tend to focus more on efficiency, so they often buy in bulk and shop less frequently.

Before 2020, online purchases were more common among affluent, young, urban dwellers.

This grew to include a lot of people who do not fit that demographic. Even older, not-so-affluent folks now take advantage of online delivery. In some cases, their children place the orders for them and ensure they’re delivered.

In addition to that, research by The Food Industry Association (FMI), an analytics firm, shows that people are buying more but spending less time in-store. (source)

Grocery stores are also leveraging data to adjust to the times. They focus on restocking their bestselling 1000 items, such as Tide, Oreos, and Barilla pasta. One of the stores said it reduced 25% of its SKUs so that it could focus on those items it knows customers are demanding.

One other trend worthy of note is that big grocers like Amazon (via Whole Foods) and Walmart dominate the online space.

Both have a market share of 50% of online shopping. Regional markets account for only 22%. They do not usually have the capital to build their own in-house technology, so they have to partner with technology companies to enhance their capabilities.

Which online grocery shopping service is the best?

Instacart, Amazon Fresh, or Shipt are the best online grocery shopping companies for selection and convenience. FreshDirect is the best budget option for online grocery ordering.

But there are several online grocery shopping services. And that is likely going to keep growing.

Some deliver only products from just one store (Whole Foods is a good example); some deliver from several stores. By that, I mean that they get products from many stores, if it’s not available in one store, package it, and then deliver to customers.

But which one is the best?

Actually, each service has distinct advantages. So, it depends on what you want. Instacart and Amazon Fresh are the top contenders and have key advantages. But you’ll need to be in their coverage area, be prepared to accept groceries midweek, and sign up for a subscription.

For same-day delivery Amazon and Shipt are cool.

You can get same-day delivery options from the aforementioned, too. But, it’s a tad pricey and requires some planning. Lastly, if you’re into high-quality organic produce Amazon (in partnership with Whole Foods) is what I’ll recommend.

I’ll say your best option, all things being equal, is Amazon Fresh. But, they’re not as budget-friendly as FreshDirect.

And for some on a tight budget, EBT is sometimes a concern too, and not every online grocery company accepts it. Does Instacart accept EBT?

Check out a recent article of mine, where I get into just that.  And note the answer has changed completely from when I first wrote the article.

Just click the link to read it on my site.

Ready to order from Instacart? CLICK HERE to get started with your order!

Conclusion

In the preceding paragraphs, I looked at how the online grocery shopping landscape has been changing.

I shared key stats relating to what percentage is being bought online, the growth rate, the major trends, and the best shopping service. Ultimately, online grocery shopping is here to stay. And the days of brick and mortar grocery stores could be numbered.

But don’t worry. They aren’t going away anytime soon. However, I would expect the bells and whistles and staffing levels to drop considerably in response to the trends.

Photo which requires attribution:

First Amazon Fresh delivery. by Kyle Brazil is licensed under CC2.0

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Jeff Campbell
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