There are a lot of questions around the lasting impact the pandemic will have on the way we get our food. A new report out today from Mercatus and Incisiv attempts to answer some of those questions as they pertain to the way we’ll shop for groceries.
In the report, titled “eGrocery’s New Reality: The Pandemic’s Lasting Impact on U.S. Grocery Shopping Behavior,” Mercatus and Incisiv predict that by the year 2025, online grocery will hit $250 billion and account for 21.5 percent of all grocery sales.
Worth noting is how the pandemic has altered and shaped the online grocery landscape. Of the 60,000 American shoppers across the country surveyed for the report, 62 percent of respondent said they were shopping online because of COVID-19. And it seems like this new e-commerce behavior has become normal for many people. The 21.5 percent adoption in 2025 is a post-COVID data point, and is up 60 percent over pre-COVID projections.
Another finding from the report is that while 40 percent of online shoppers are likely or very likely to continue buying groceries online, the vast majority — 78 percent — still prefer going to the physical grocery store either to shop or do curbside pickup.
Who is shopping online may surprise you, as Mercatus/Incisiv found that older populations (45-plus years old) made the biggest shifts towards technology. In that group, 46 percent adopted new fulfillment options like curbside pickup and 35 percent ordered groceries online for the first time.
The report also found that 43 percent of respondents have shopped online for groceries in the past six months, up from 24 percent two years ago.
The one caveat with this report is that it was backed by Mercatus, which sells a grocery e-comerce platform. So it has a horse in this online grocery race. But Mercatus has also backed research by Brick Meets Click, which has helped provide a barometer of online grocery adoption both pre- and during this pandemic.
Speaking of, that Brick Meets Click survey was released last week and showed that online grocery shopping had fallen to $5.7 billion in August from its record peak in of $7.2 billion June. That $5.7 billion, though, is up from $5.3 billion in April, so there is still plenty of inertia behind the move to online grocery shopping.
Mercatus/Incisiv seem to have taken this slowdown into account, writing:
Growth of online grocery will slow in the immediate term, as shoppers return to stores due to reduced concern for COVID-19 risks. Retailers will be required to invest both in technology and re-alignment of operating models (store labor, forward deployment etc.) to improve customer experience and drive the next wave of growth, while ensuring profitability. Growth is expected to pick-up again in early 2022.
Of course, none of these projections are set in stone. We still have one full quarter in what has been a tumultuous year, and literally anything could happen to impact the meal journey. So all our questions won’t be answered for quite some time.