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Industry Updates

Grocery App Downloads Skyrocket as Consumers Switch to Online Ordering

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For big-box retailers like Walmart that rely on grocery sales for 56 percent of its total revenue, according to financial and investing advice company The Motley Fool, capturing a majority of online sales is imperative as more consumers switch to this method to practice social distancing.

The COVID-19 pandemic has introduced more consumers to online grocery shopping. Nearly half of all consumers recently reported buying groceries online for the first time and one-third purchased groceries for online pickup or delivery in the past seven days, according to a survey conducted by Gordon Haskett Research Advisors.

Last year, just 4 percent of grocery sales in the United States came online, according to Nielsen. Downloads of Instacart, Walmart’s grocery app and Shipt increased 218 percent, 160 percent and 124 percent respectively, when compared to the same week last year, according to CNN.

Doug Baker, vice president of industry relations at FMI, a trade group for food retailers, told CNN that consumer behaviors shift in times of disaster. In response to COVID-19, “people are learning new skills and how to shop online as a result of what we’re experiencing today,” he said.

As a result, retailers are ramping up online ordering and pickup services. Walmart, for example, has been preparing for the shift to online ordering for the past few years. The company increased its number of pickup and delivery locations, as well as introduced a delivery subscription service, Delivery Unlimited, last year.

According to The Motley Fool, Walmart is grabbing 58 percent of new online sales while Amazon and Kroger gain 14 percent and 10 percent, respectively.

“We see this unfortunate period accelerating structural changes in consumer shopping,” Credit Suisse analyst Seth Sigman told The Motley Fool.

Click here to read more about how online ordering will change the grocery industry moving forward.