The U.S. grocery industry has been in full battle mode since Amazon bought Whole Foods in 2017, showing just how serious it was about gaining traction and customers in the food and food delivery sector.
Walmart is racing to offer grocery delivery from 1,600 locations by the end of fiscal 2020.
Target, which doesn’t have as strong of a grocery business as Walmart, has taken steps to reach more customers with grocery delivery as well. It acquired delivery platform Shipt last year, which now gives Target customers access to same-day grocery delivery in certain markets.
Kroger is currently delivering groceries from about 2,000 stores.
This is not just a trend that is happening in the U.S. as Canadian grocers are also in a race to offer this service to their customers in all markets and take a bite of the market that e-commerce grocers like GoodFood and HelloFresh have created.
Loblaws, Canada’s largest grocer, opened more markets last year to online shopping and delivery when it expanded its partnership with California-based delivery company Instacart, to take advantage of this new trend with customers. The retailer also plans to expand its click-and-collect program, which allows customers to order groceries online and pick them up for added convenience.
Sobeys has also inked a deal with Ocado to launch online grocery shopping by 2020 for its customers to keep inline with the market and its customers.
The food delivery business looks posed to take off as retailers see that shoppers who shop more than one channel are more profitable overall.
Some grocery chains though, have decided that offering online grocery delivery isn’t worth it as online customers are less profitable than those that come into the store.
So, the decision is now whether to go all in on e-commerce and convenience for customers shopping online or hold off that investment in hopes that customers make the trip into the store to buy a few extra items.
By Jamie Barrie