Convenience, hidden costs and weird substitutions: Online grocery shopping marches on
The online shopping revolution started, and ended, without the neighborhood supermarket.
And then, COVID-19 arrived in the aisles.
The share of groceries purchased online nearly tripled from 3 percent in 2019 to 8 percent in 2020, as homebound consumers scoured Amazon and Walmart websites for precious pallets of toilet paper and sanitizer and soup.
Customers have returned to the malls. But the online supermarket marches on, ringing up 10 percent of all grocery sales in 2021 and 11 percent in 2022.
Online grocery shopping “was one of the largest mass-adoption events we have ever seen,” said David Bishop of Brick Meets Click, an online supermarket analyst. “It’s too big for any grocer to ignore.”
In recent months, however, inflation, transit costs and recession fears have buffeted the online supermarket. Sales are seesawing. Shoppers are balking at $14.95 delivery fees and seemingly random substitutions for out-of-stock items. Holiday chefs are weighing convenience against the time-honored tradition of choosing one’s own Thanksgiving turkey.
The future of online grocery shopping ranks as one of the great unanswered questions in retailing. Online grocery sales totaled $7.8 billion in October, down 3 percent from October 2021, according to monthly surveys by Brick Meets Click and the research firm Mercatus. The total includes $3.4 billion in grocery pickups, $2.9 billion in deliveries and $1.5 billion in orders shipped to homes.
Online supermarkets are growing, but brick-and-mortar shopping is growing faster. And while more Americans than ever shop for groceries online, they’re using the service less often as prices rise and the pandemic eases.
“Down 3 percent is not a big number, but it’s not growing anymore,” said Peter Cloutier, commercial strategy lead for ChaseDesign, a grocery industry consultancy. “I’m one of the people who think it’s leveled off.”
Before the pandemic, most Americans didn’t know online grocery shopping was a viable option. Only 13 percent of U.S. households ordered groceries for pickup or delivery in August 2019, Bishop said.
In 2022, two-fifths of households order groceries online at least monthly, and roughly 70 percent have placed an online order in the past year.
Christina Haley, 46, a mother of teenagers in Round Rock, Texas, first tried grocery delivery in the summer of 2020. The coronavirus pandemic was raging. Supplies were short. She pivoted between Target and Amazon.
“My usual store, H-E-B, offered curbside pickup,” she recalled. “But it was in the early days, and it could be very difficult to get it scheduled. I remember my friend group making announcements when spots opened up.”
Haley gravitated toward pickup as curbside congestion cleared. She hazarded a return to the aisles after her first COVID-19 vaccine. But she still shops online, especially when she can’t find what she needs at H-E-B, or she is under the weather.
“I actually have COVID right now,” she said. Haley ordered grocery delivery this week.
Online grocery shopping isn’t just for germaphobes. Curbside pickup, favored by suburbanites and rural customers, saves time crisscrossing the aisles. Delivery, beloved to urbanites and the carless, reduces the entire supermarket transaction to a series of clicks. Both methods allow the shopper to load a virtual cart at leisure, darting back and forth to the kitchen to shake the milk carton and count eggs.
Like many New Yorkers, Reesa Graham, 44, dabbled in grocery delivery well before the pandemic. “I used to live in a fourth-floor walkup,” she said, “so I used to get grocery deliveries once a month or two, for all of the heavy s—.”
When COVID-19 descended, she spent three months in her Harlem apartment, leaving only to collect the mail, taking all of her groceries by delivery.
She never went back.
“One of the things I realized is, I can now grocery shop from anywhere, including work, during my lunch hour,” she said. “It just saves me so much time. I wrote it into my budget during the pandemic. I just never wrote it out.”
Leslie Mallard, 58, of Atlanta has switched almost entirely to grocery delivery in the pandemic years.
“I can shop in the middle of the night,” in pajamas, she said. “We’ve gotten used to the convenience now, and why would we go backwards?”
Mallard said her family alternates between Instacart and Costco. Between them, the retailers stock everything her family needs.
“My husband actually works in a grocery store,” she said. “We still find that it saves us time.”
But convenience comes at a cost. Online grocery shopping engenders fees, some explicit, others hidden. Delivery services can charge $5, $10 or even $15, not counting tips, to select, bag and carry groceries to a customer’s door, depending on how soon the shopper needs the items, the length of the delivery window and other factors.
Customers tend to pay a little more for every item they order online, a markup that isn’t generally announced in bold type on the site.
“This is not the time to be charging people more,” said Cloutier of ChaseDesign. “People are starting to notice.”
The bigger problem with online groceries, Cloutier said, lies in trusting a surrogate to do the actual shopping. Grocery store customers linger in the produce section and at the meat counter for a reason.
“When you do online grocery, you are handing over the keys to product selection to someone you’ve never met,” he said. “They’re gonna buy the cantaloupe you wouldn’t buy. They’re going to buy tomatoes that have bruises, and eggs that are broken. People are disappointed by what shows up at the door.”
Alicia McPheron, a regular at Whole Foods in Rockville, Md., has never purchased groceries online.
“I actually like picking out my food,” she said. “Veggies, fruit, meat, things like that. I like having the control to say, ‘This one looks a little bit healthier than that one.’”
And then there are the dreaded substitutions. A shopper who orders groceries online cedes a measure of control, too, over what happens if an item is out of stock.
In a February article headlined “The Bizarre World of Online Grocery Store Substitutions,” the Wall Street Journal collected war stories of online customers requesting one item and getting another. One shopper asked for strawberry-shortcake ice cream and received sausage, egg and cheese breakfast rolls. Another requested horseradish and got beets. A Pittsburgh man ordered cauliflower and wound up with raspberries.
Grocers have labored to seal cracks in the substitution system. Whole Foods allows shoppers to select a substitute beforehand, or to forego substitutions altogether.
Giant, a chain of 165 supermarkets in the Mid-Atlantic, trains employees to look for substitutes that are essentially the same item in larger or smaller scale, to match such features as organic
s or reduced salt, and to “stay within brands if you can,” said Greg Dorazio, director of e-commerce at the grocer.
The Giant chain has scored points with customers by using its own employees and trucks to select and ferry groceries, an important consideration for orders that might include rattling eggs and thawing shrimp.
“There is no other service out there that has to deliver frozen items, chilled items, ambient items,” industry parlance for shelf-stable food, “and get it all to you without breaking any eggs,” Dorazio said.
Before the pandemic, Giant delivered groceries to a small group of mostly affluent customers and tech-savvy early adopters. Online shopping peaked “in the beginning of 2021,” in midwinter’s chill, just before most Americans got their first COVID-19 vaccine shot, Dorazio said.
But online business hasn’t retreated far. Dorazio expects another surge to start right around Thanksgiving.
“We usually peak in January or February,” he said, “and it’s usually because of a snowstorm.”