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Online Food Shopping and Grocery Delivery in the U.S.: Future of Food Retailing


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Online Food Shopping and Grocery Delivery in the U.S.: Future of Food Retailing

It’s the smallest slice of the food retailing pie – yet it could very well hold the greatest potential for growth and certainly innovation in this highly mature market.

Online food shopping represents a mere 4% of online food and beverage retail sales. But retailers and manufacturers shouldn’t be lulled by the small figure into complacency about the opportunity this innovation holds. In our new report, Online Food Shopping and Grocery Delivery in the U.S.: Future of Food Retailing, Packaged Facts projects that online grocery shopping will enjoying double-digit annual growth rates over the next five years and hit the $100 billion market by 2019.

The more consumers click and shop from the comfort of their computer, the more likely it will be that those orders will include milk, bread, eggs and other staples of a food shopping trip. Of course, challenges exist for our adoption of a fully virtual grocery cart. These include how and by whom the orders are picked and assembled, how to deliver the orders to consumers promptly while keeping delivery costs low (all the while, making sure that the proper temperatures are maintained until the groceries reach the consumer), and convincing consumers that buying groceries online is as good as. or even better than, shopping in person. For more than a decade, the notorious failure of Webvan scared many potential entrants away from the online grocery business. Now, despite the challenges, online food shopping is swiftly becoming crowded with trials by competitors, although it is not yet clear which models are financially viable.

Scope & Methodology

Packaged Facts’ new report, Online Food Shopping and Grocery Delivery in the U.S.: Future of Food Retailing, examines the potentials and pitfalls of this burgeoning retail sector. The first chapter presents an up-to-the-minute overview of the business, examining business models and consumer reception, among other factors, while reviewing historical sales and projecting market growth through 2019. The second chapter profiles more than 20 companies vying for a share of this business in the United States, from long-established services like Peapod and FreshDirect, to huge general merchandise marketplaces like Amazon.com (currently in a trial with the U.S. Postal Service to provide delivery of fresh groceries to consumers’ doorsteps), to brash startups like Instacart and Uber. The final chapter profiles the state of the online grocery industry in other countries while exploring possible ramifications in the U.S., specifically, the United Kingdom, France, China, Japan, and Australia.

Sources of information include primary research examining the websites of individual service. Secondary research involved evaluating and comparing data from more than 200 articles and reports found in financial, marketing and industry publications, as well as annual reports, 10Ks, transcripts of earnings calls, and literature from individual companies; government data from the U.S. Department of Agriculture’s Economic Research Service; and other Packaged Facts reports.


  • Executive Summary
    • Overview
      • Background Perspective: The Economics of Grocery Retailing
      • Few Major Online Players
      • Online Grocer Sales Will Near $100 Billion by 2019
      • Consumer Acceptance Is Growing
      • What Consumers Seek
    • Profiles of Online Grocery Services
      • The Field Is Getting Crowded
      • Amazon.com: AmazonFresh and Amazon Prime Pantry
      • Artizone Offers Local Artisanal Online Food Shopping
      • FreshDirect Focuses on High Quality Fresh Foods
      • Google Pilots Google Shopping Express
      • Kroger Tests Click-and-Collect
      • Peapod Uses Supermarkets to Fulfill Orders
      • `Walmart To Go' Grocery Service in Test Market Stage
    • Online Shopping Abroad
      • Online Grocery Shopping Booming Worldwide
      • U.K. Is the World's Most Developed Market for Online Grocery Shopping
      • Tesco Is Europe's Biggest Online Grocer
      • France: Retailers Offer Drive-Thru Pick-Up Points
      • China Has the World's Largest Internet Population
      • Japan's Online Grocery Services
  • Overview
    • Online Grocery Services
      • Background Perspective: The Economics of Grocery Retailing
      • Few Major Online Players
      • Online Grocer Sales Will Near $100 Billion by 2019
        • Table U.S. Online Sales of Foods and Beverages, 2013-2019 (in millions of dollars)
      • A Sector with Unique Challenges
      • Consumer Acceptance Is Growing
      • Investments and Trials Proliferating
      • Online Grocery Business Models
      • Store-Based vs. Warehouse-Based Fulfillment
        • Table Store-Based Fulfillment vs. Warehouse Fulfillment
      • "Dark Stores" or "Shadow Warehouses"
      • Going the "Last Mile": Delivery vs. Click-and-Collect
        • Table Delivery vs. Click-and-Collect
      • USPS Delivers … Groceries?
      • Other Online Grocery Providers and Services
      • Courier Services and Personal Shoppers Provide Fast Service
      • Farm-to-Fridge Online Delivery Services
      • Meal Kit Delivery Services
      • Business-to-Business Sales
      • Top-Selling Products
      • Choice vs. Efficiency
      • Niches Based on Shopping Occasions
      • Location, Location, Location
      • Facebook and Twitter Are Testing "Buy" Buttons
      • Six Major Online Retailers Add Unit Pricing Online
      • Online Shopping May Cost Impulse Sales
      • Consumer Research
      • The Harris Poll
      • Private Label Buyer
      • MyWebGrocer Study Breaks Out Online Shopper Types
      • Fusion Marketing
      • Brick Meets Click
      • PwC (PricewaterhouseCoopers)
      • Etailing Solutions Studies Consumer Satisfaction
      • What Consumers Seek
      • Rating the Online Grocery Sites
  • Profiles of Online Grocery Services
    • The Field Is Getting Crowded
    • Alice.com's Direct-to-Consumer Site for Goes Bankrupt
    • Amazon.com: AmazonFresh and Amazon Prime Pantry
      • U.S. Postal Service Testing AmazonFresh Deliveries
      • Is AmazonFresh Preparing for a Major Rollout?
      • Amazon Prime Pantry
      • Amazon.com's Grocery & Gourmet Food Store
      • Coca-Cola Partners with Amazon.com to Re-Launch Surge Soda
      • VineMarket.com, an Amazon Website for Consumers with Food Allergies
      • Amazon Dash: The Magic Wand
      • Droning On?
    • Artizone Offers Local Artisanal Online Food Shopping
    • Blue Apron
    • CobornsDelivers Partners with General Mills for Frozen Meals
    • Food52 Combines Social Network, Recipes, and Online Retailing
    • Fresh Nation Shops Farmers' Markets
    • FreshDirect Focuses on High Quality Fresh Foods
    • Good Eggs, a High-Tech Online Farmers Market
    • Google Pilots Google Shopping Express
    • Honest Green
    • Instacart, the Darling of Investors
    • The Kroger Co. Is Testing Click-and-Collect
    • mySupermarket Lets Consumers Comparison-Shop Groceries
    • MyWebGrocer: Marketing Services for Bricks-and-Mortar Grocers
    • Peapod Uses Supermarkets to Fulfill Orders
    • Relay Foods Targets Suburban Shoppers with Click-and-Collect
    • Safeway, Inc.: Online Shopping and Delivery from Local Stores
    • Schwan's Home Delivery Specializes in Frozen Foods
    • ShopRite Offers Online Shopping from All its Stores
    • Uber Tests Grocery Deliveries
    • Walmart Still Testing `Walmart To Go' Grocery Service
    • Whole Foods Market Partnering with Instacart for Deliveries
    • Yummy.com Delivers Groceries in 30 Minutes
    • Other Retailers Experimenting with Online Grocery Shopping
  • Online Shopping Abroad
    • Online Grocery Shopping Booming Worldwide
    • U.K. Is the World's Most Developed Market for Online Grocery Shopping
      • Tesco Is Europe's Biggest Online Grocer
      • Ocado Operates Online Only
      • Survey of British Consumers
    • France: Retailers Offer Drive-Thru Pick-Up Points
      • Groupe Auchan
    • China Has Largest Internet Population
      • Yihaodian
      • Alibaba Group Holding Ltd.
    • Japan's Many Online Grocery Services
      • Rakuten Ichiba
      • Amazon.co.jp
      • Yahoo! Shopping
      • Seven & I: Ito-Yokado's Net Super and Seven-11
      • Oisix Specializes in Organic and Low-Pesticide Products
    • Australia

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