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The Spoon

Daily news and analysis about the food tech revolution

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Report: Foot Traffic to Major QSRs Down by 50 Percent from Start of Year

It’s probably not much of a shocker to learn that far fewer people are venturing inside quick service restaurants (QSRs) these days. There is, after all, a global pandemic that continues to rage across the U.S. But Yahoo Finance posted a story over the weekend with actual data showing just how precipitous the drop in foot traffic has been for a number of major QSR brands.

According to location intelligence service Gravy Analytics, as of December 8, foot traffic to Burger King, Popeyes, KFC, Pizza Hut, Taco Bell, Domino’s, Papa Johns and Starbucks fell 50 percent compared to February 2020. Furthermore, Gravy Analytics reports that foot traffic to Chick-Fil-A, McDonald’s, Wendy’s, Dunkin and Chipotle dropped more than 40 percent compared with pre-pandemic levels.

Obviously the key word here is “pandemic,” which forced big changes to restaurants of all sizes here in the U.S. Early on in the pandemic, restaurants in various parts of the country were forced to close dine-in operations entirely. Though many have reopened, most dining rooms still operate under reduced seating capacity and other restrictions as states continue fighting the virus. [I REWROTE THIS GRAF FOR CLARITY]

Given that fewer people could physically stand and sit inside a restaurant, it makes sense to see the kind of drop in foot traffic that Gravy Analytics reported. And as we learn more about COVID, especially how it travels farther and faster inside restaurants than previously thought, these types of limitations are likely to stay in place until the vaccines are widely available. The question now is, even when the vaccine arrives, will people still want to dine in, or equally as important, will QSRs want them to?

In response to the pandemic, QSRs have been aggressively pivoting away from dine in and more towards drive-thrus and delivery. In the back half of this year, McDonald’s, KFC and Burger King have all announced various plans for future store designs to emphasize pickup and drive-thru operations rather than dine in options. At the same time, the rise of delivery services like DoorDash and Uber Eats means that hungry consumers don’t even need to leave their couch if they want a Big Mac or a Whopper.

With 2020 almost in the rearview mirror (thankfully), and the aforementioned vaccine on its way, hopefully the numbers we see from QSRs and all restaurants will be a lot better.

Survey: Online Grocery Falls in August, Though Majority Will Continue E-Shopping

What goes up must come down, especially, in this case, when people feel safe enough to go out. New survey data from Brick Meets Click/Mercatus shows that U.S. grocery delivery and pickup sales for August dropped to $5.7 billion, down from June’s record high of $7.2 billion.

This pullback in online grocery isn’t a huge surprise. Between March and June of this year, online grocery shopping had seen one record month after another, but that growth was artificially inflated, fueled by the pandemic.

According to Brick Meets Click, the fall in online grocery dollars correlates with increased ease about COVID-19, with 38 percent of U.S. households expressing high levels of concern about the virus in August versus the high of 47 percent in April.

“There is a common belief that the rapid and dramatic surge in sales caused by COVID-19, starting in mid-March, would recede at some point as stay-at-home orders and in-store shopping restrictions like occupancy limits, shortened hours and one-way aisles were relaxed,” David Bishop, a partner at Brick Meets Click, said in a press release announcing the August results. “While the August results reflect a retrenchment of sorts, the market appears positioned to begin a new growth cycle with a large base of committed shoppers.”

This larger base is actually good news for those investing in online grocery services. Brick Meets Click said that roughly 37.5 million, or 29 percent of all U.S. households, are monthly active users of grocery delivery and pickup. That’s an increase of 133 percent over August of 2019, when that number was just 16.1 million.

August wasn’t without its own record setting, however. Brick Meets Click found that spending per order hit a record $95 in August, up 32 over a year ago. Active shoppers placed 1.6 orders per month versus 1.0 orders during the same time last year.

Additionally, more people are developing new online grocery shopping habits. According to the survey, 75 percent of customers said they are “extremely or very likely” to online grocery shop through their retailer again within the next 30 days. This desire to continue shopping online, said Brick Meets Click, was likely because of improved online shopping experiences.

Considering that people have been living under pandemic conditions for half a year (!) now, new habits have definitely set in. One thing to look for is the change in the weather. Now that people have experienced online grocery shopping, will they return to it when the weather outside is frightful (and delivery and pickup can be so delightful)?

Online Grocery Sales Climbed to $7.2 Billion in June

U.S. grocery e-commerce sales continued to break records as they hit $7.2 billion in June, up 9 percent from May (which saw $6.6 billion in sales), according to a new Brick Meets Click/Mercatus Grocery survey announced today.

The survey, conducted between June 24 – 25, also found that 45.6 million households used delivery and curbside pickup for a larger portion of their grocery needs, and order frequency grew to 1.9 orders per month, up from 1.7 in May.

Online grocery shopping has had a big year, spurred on by the COVID-19 pandemic and people sheltering in place. I was particularly interested to see what the June numbers would bring, as many states relaxed their lockdowns restrictions. However, despite re-openings, the coronavirus still loomed large over people’s shopping in June. From the Brick Meet Clicks press announcement:

In June, 44% of all households reported high levels of concern about someone in their household contracting COVID-19, up two percentage points from the previous month. The increase was almost entirely driven by a 9% increase among shoppers in the over-60 age segment since May.

Brick Meets Click noted that retailers of all sizes have been aggressive in expanding capacity to meet the demand for all this increased e-commerce. Anecdotally speaking, I’ve seen this play out where I live, as grocery stores big and small have both launched new online ordering platforms and carved out more space in the parking lot to fulfill pickup orders.

Will record-setting grocery e-commerce continue into the summer? There’s a good chance it will as the pandemic shows no signs of slowing down and restaurants are forced to shut down again. With three full months of pandemic quarantining in place, new habits have definitely formed. And all the confusion around opening/closing/partial opening, people could just force people to throw their hands in the air and stick with online grocery shopping for the rest of the year.

Online Grocery Sales Hit $5.3 Billion in April, Up 37 Percent from March

April was a record-setting month for U.S. online grocery sales, which reached $5.3 billion, according to new research released by Brick Meets Click and Symphony RetailAI earlier this week (tip of the hat to Grocery Dive). This represents a 37 percent growth over March, which was its own record month with $4.0 billion in sales.

The Brick Meet Click survey found that over the last 30 days, 40 million people shopped for groceries online (up from 39.5 million in March), with the total number of orders hitting 62.5 million in April (up from 46.9 million in March), and a slight increase in spending per order at $85 in April (up from $82 in March). Consider, for comparison, that a Gallup survey in August of last year showed that only 11 percent of respondents shopped for groceries online once a month.

All of this record-setting action, of course, is driven by the COVID-19 pandemic and shelter-in-place orders enacted across the country starting in March. This isolation and social distancing spurred droves of people online to shop for groceries to be either picked up curbside or delivered.

Among the motivating factors for grocery e-commerce was fear. Brick Meets Click found that 47 percent of households surveyed had a “high level” of concerns about catching the novel coronavirus. This echoes a recent survey from C+R Research that found 60 percent of respondents were “fearful” of actually shopping at the grocery store.

These record months of online grocery shopping have put a tremendous strain on the grocer retail infrastructure. Amazon, Walmart, Kroger Instacart and others have all ramped up hiring and added additional measures to try and keep up with the sudden uptick in demand.

But despite two record months in a row, there are bigger, more existential troubling signs on the horizon. In addition to all the boomtown data Brick Meets Click found, its survey also gave us a sobering glimpse at the economic hardship data that lags behind the big sales numbers: 39 percent of surveyed households indicated that their monthly income has dropped 25 percent or more since January and February of this year. Less household money, sadly, means less spent at the grocery store.

Though grocery stores have remained opened during this pandemic, some states are starting to ease their shelter-in-place restrictions. We look forward to seeing Brick Meets Click’s May scorecard to see if and how online grocery shopping behavior has changed.

31 Percent of U.S. Households Used Online Grocery in the Past Month

Nothing like a catastrophic global pandemic to force people into new behaviors. According to a survey released yesterday by Brick Meets Click and ShopperKit, online grocery shopping is booming, with 31 percent of U.S. households (~39.5 million households) saying they have used either an online grocery delivery or pickup service in the past month. (h/t Grocery Dive).

The results of this survey, which was conducted from March 23 – 25 with 1,601 U.S. adults, is more than double the number Brick Meets Clicks found in its August survey that found 13 percent of U.S. households grocery shopping online.

Interestingly, 26 percent of those surveyed are doing online grocery shopping for the first time. For shoppers 60 years and older, that number of first time users jumps to 39 percent.

The COVID-19 pandemic, coupled with shelter in place orders and social distancing, is driving a lot of this sudden spike online grocery usage. The question is whether these e-commerce newbies will stick around once the outbreak recedes. Brick Meets Clicks actually dug into this and found:

When asked how likely they were to continue using a specific online grocery service after the COVID-19 crisis subsides or ends, 43% of the survey respondents indicated that they are either extremely or very likely to do so.

That many people saying they will probably stick with e-commerce makes me think that consumers are being extra forgiving with delayed delivery times and out of stock items at the major retailers in this time of mass hoarding.

The trickier part in getting all of the data going forward is the fact that this pandemic doesn’t have a hard end date. It will be amorphous and the extent to which social distancing measures are kept in place could depend greatly on where you live and your perceived threat.

Regardless, this outbreak is forcing people into all kinds of new behaviors, and now we have numbers to show that online grocery shopping is among them.

Study: Holidays Could Bring Boost to Online Grocery Shopping

A topic I’ve touched on a lot lately is that while online grocery shopping is currently a small sliver of the overall grocery shopping pie, it’s growing. According to a new survey from facilities management platform ServiceChannel (h/t Grocery Dive), the holidays could provide a shot in the arm for that online grocery delivery growth.

From ServiceChannels’ The State of Grocery Report, of the 1,505 consumers surveyed:

  • 63% of all respondents said they would be at least somewhat likely to order a fully prepared holiday meal from an online grocery delivery service if it were available, with Millennials and Gen X being the most interested.
  • 32% of those who already shop online say they’d be very likely to order a fully prepared holiday meal from a delivery service.

Shoppers who regularly buy groceries online will lean on digital options even more heavily in the 2019 season:

  • 50% of those who regularly shop online for groceries plan to order them online more than usual. Compared to other generations, more Millennials (47%) and Gen Xers (53%) plan to order groceries online more often than usual over the holiday season.

I, a GenXer, can’t imagine my GenXer wife ever agreeing to purchase fully prepared holiday meals online (though the idea is tempting). I’ll leave that one to millennials and GenZers. But the bigger, more key takeaway here is that people are looking for ways to alleviate the stresses associated with holiday meals and online grocery shopping has finally grown into a mechanism to help alleviate that stress.

Just look at recent moves from Amazon and Walmart to make online grocery shopping during the holidays easier. Amazon made two-hour grocery delivery free for Prime Members, and Walmart is rolling out its Delivery Unlimited service nationwide.

The question now is if grocery delivery will provide a great enough customer experience that people continue with it after the new year.

Study: Online Shopping Now More Than 6 Percent of U.S. Grocery Spending

Another study shows that while online shopping remains a small percentage of overall grocery shopping in the U.S., it is growing. According to analysis released yesterday by Brick Meets Clicks, in 2019 online grocery sales have grown 15 percent year-over-year and now represent 6.3 percent of total grocery-related spending by US households (h/t Food Dive).

In the press release announcing its findings, Brick Meets Click attributed the growth to the following factors:

  • Household penetration, based on past-month shopping activity, has risen more than five percentage points over the last year to nearly 25% of all US households. This gain is largely the result of aggressive expansion of home delivery and pickup services available at brick-and-mortar stores, which collectively are now accessible to 90% of all the households in the US — up from 81% in 2018.
  • Average order values, encompassing ship-to-home, home delivery, and pickup orders, have climbed over 6% to $70 in 2019. When only analyzing home delivery and pickup orders across various retail trade channels, the average order value grew 13% to just over $100.
  • Online purchase frequency for groceries remains relatively unchanged versus last year, averaging two orders during the past month for active online grocery customers. Ship-to-home orders account for 50% of all online grocery orders while pickup captures 28% and home delivery 22%, respectively.

 

One study doesn’t make a trend, but the results are in line with other recent market research. A Gallup survey released in August showed that 81 percent of Americans never buy groceries online. But the number of “nevers” was less than the 84 percent Gallup found in 2018. And in May, Coresight Research found that 35 million more people shopped for groceries online between 2018 and 2019.

While not exactly swift, online grocery shopping is a movement that will accelerate over the next couple of years as retailers build out the infrastructure to facilitate it.

Just yesterday, Walmart announced that it was expanding its $98/year Delivery Unlimited service to more than 50 percent of the U.S. by the end of this year. Also yesterday, Kroger officially announced that Dallas would be the location for its fifth robot-powered smart warehouse for faster grocery fulfillment. The company has plans to build out 20 such facilities across the country over the next two years. And just a couple of weeks ago, Target announced its curbside pickup service is now available in all 50 states.

As these services and facilities continue to expand, online shopping will become more economical and convenient. Expect to see continued adoption and those online shopping percentages grow by bigger leaps and bounds.

Gallup: 81 Percent of Americans “Never” Order Groceries Online (But That’s Still Good News for Grocers)

A survey out from Gallup last week showed that the vast majority of Americans are not shopping for groceries online. According to Gallup, “Eighty-one percent of Americans say they never order groceries online, while 11% say they do so at least once a month.”

Gallup posited the following explanation for American hesitancy when it comes to online grocery shopping, writing:

The slow adoption of online food ordering could indicate that people enjoy picking their own groceries in person or that they don’t see sufficient savings of time or money to justify the switch. The delivery charges that go along with food delivery may be a factor in that.

That sounds pretty dire for the grocery industry, which is investing pretty heavily in online ordering and fulfillment mechanisms. But one of the good things about this stat is that we have a similar Gallup poll from almost exactly a year ago to compare it to. If you are looking for a silver lining, last year Gallup found that 84 percent never bought groceries online. So there’s been a three percent drop in the number of “nevers.”

Additionally, there’s more (relatively) good news to be found if you dig into the numbers a bit. Last year Gallup found that 14 percent of adults with children under 18 bought groceries online at least monthly. The 2019 survey found that 19 percent of those with children under 18 bought groceries online at least monthly. So if you’re playing the (very) long game, there are more families online grocery shopping, and they are raising a new generation that will grow up believing online shopping is the normal way to get groceries.

The Gallup stats should be taken as a piece of a bigger set of data around the evolution of grocery shopping. While it was small, Gallup did find an increase in the number of people who have at least tried online grocery shopping this year. In May, Coresight Research found that between 2018 and 2019, there was an increase of 35 million people who shopped for groceries online. And in July, a Field Agent survey found that 66 percent of its respondents expect to be buying their groceries online in the next five years.

Having said all that, in-store shopping is still the way to go when it comes to groceries for most Americans. Gallup’s 2019 found that 83 percent say that they shop at grocery stores at least once a week, which is why the biggest opportunity for grocers may be investing in curbside pickup (which many are already doing). Curbside pickup allows people to maintain their regular life schedules, and gives them an opportunity to inspect items at the store in case any need to be returned.

My guess would be this time next year, Gallup will show another year of incremental growth in online grocery shopping. But as big investments from Walmart, Kroger and Albertsons move out of testing and into real life, the adoption for online grocery shopping will accelerate soon after that.

New Data Show Increased Consumer Interest in Online Grocery Shopping

All of the investments grocery retailers are making into robotic fulfillment, curbside pickup and even self-driving delivery hinge on the idea that shoppers will migrate from their habitual shopping in-store to shopping online. That can be a big ask when talking about a product that people often want to look at and touch before buying.

But the good news for the grocer retailers investing in those technologies is that according to two recent market studies, people are getting more comfortable with and ordering more groceries online.

Yesterday, Grocery Dive reported on a Field Agent survey of 3,342 shoppers. In the survey, 66 percent of respondents said they expect to be buying their groceries online in the next five years. Right now, 97 percent of primary grocery shoppers do so in-store, according to Field Agent, but 52 percent do buy some groceries online and 21 percent are open to the possibility.

The Field Agent survey came a day after NPD Group released its own stats around online grocery grocery. From a press announcement on its findings, NPD wrote:

The percentage of U.S. consumers, ages 18 and above, who shopped online for groceries within a 30-day period, whether for delivery or pick-up in store, increased from 17 percent in the quarter ending November 2018 to 20 percent, or about 51 million consumers, in the quarter ending February 2019…

Both of these stats reinforce a study from Coresight last month that found 36.8 percent of U.S. consumers bought groceries online over the past year, which was a jump up from 23.1 percent in the firm’s 2018 survey. That represents an increase of roughly 35 million more consumers buying groceries online.

With consumer trends showing an increase in online grocery shopping, it looks like the investment retailers are making now in faster fulfillment and logistics should pay off down the road. But in addition to looking at how people will buy their groceries, both Field Agent and NPD Group also looked at where they want to receive them.

The Field Agent survey showed that 38 percent of respondents use curbside pickup, double the 16 percent that use delivery. NPD found that of those shoppers ordering groceries online, 16 percent choose delivery and 11 percent choose to BOPUS (buy online pickup in store — ed. note: cute moniker!).

How consumers pick up grocery will be something to definitely keep an eye on as it could determine where groceries put their investment dollars. Should they explore more self-driving delivery vehicles like Kroger, or focus more on automated curbside pickup like Walmart?

Record Number of Robots Shipped in 2018, Food Sector Among Big Buyers

I’m feeling some deja vu. A record number of robots were shipped in North America last year, according to new stats released yesterday from the Robotics Industry Association (RIA), part of the Association for Advancing Automation (A3). The food industry was among the top non-automotive sectors buying.

From the press announcement:

35,880 units were shipped in 2018, a 7 percent increase over 2017, with 16,702 shipments to non-automotive companies, up 41 percent. Notable growth came in areas like food and consumer goods (48 percent), plastics and rubber (37 percent), life sciences (31 percent), and electronics (22 percent).

Like the remainder in The Matrix, I feel like I’ve written this before because I did when A3 announced record shipments at the end of 2017.

For comparison, the A3’s 2017 report said that 27,294 orders for robots were placed during the first nine months of that year, with food and consumer goods accounting for 21 percent of that total. Caveat: it’s not a one-to-one comparison as the 2017 report only accounted for nine months, but you can see the general growth year-over-year, especially when it comes to percentage of shipments to food and consumer goods (an admittedly broad category) companies.

Additionally, in its press release, the A3 called out the fact that robot buyers are not just large, multi-national companies anymore; more small and medium-sized businesses are using robots now as well.

This kind of data isn’t surprising to us at The Spoon, as we spent a good part of 2018 chronicling the rise of robots throughout the food stack. From hauling gear on farms, to micro-fulfillment centers in the back of grocery stores, to robot restaurants and little rover bots delivering meals, robots are an increasingly central part of the meal journey.

I expect I’ll be writing about 2019 being another record year for robot shipments this time next year.