Bonnie Russolillo is one of millions of Americans forced by the pandemic to buy groceries online. The experience was better than she expected—the broccoli crowns were perfect and she was mostly pleased with the substitutions for out-of-stock items.
But here’s the bad news for companies that have spent billions building web supermarkets: Russolillo and shoppers like her prefer to walk the aisles themselves. “If I feel it’s safe, I’d much rather do my own shopping,” says Russolillo, who is 62 and lives on Long Island. “It’s much different than going online and looking at pictures.”
Online grocery sales have surged as much as 200% this year, according to Earnest Research, part of a broader boom in home cooking now that thousands of restaurants are closed. The $840 billion grocery industry has been one of the few bright spots amid a pandemic that has infected about 1.7 million Americans, killed almost 100,000 and crushed the economy. Walmart Inc., Amazon.com Inc. and startup Instacart Inc. are all reaping the rewards, and some e-commerce prognosticators say the online grocery industry has finally hit an inflection point promised for decades.
But how much of that spending shift will stick is guesswork. It’s difficult to predict lasting behavior changes from a fear-fueled surge—growth peaked more than a month ago. Problems with online food shopping also persist. The operations are expensive to run, and limits on capacity and inventory abound right now with supply chains upended. The shopping experience can be clunky and confusing, especially for older consumers. And one thing the pandemic hasn’t changed is that Americans still like to squeeze their cantaloupes and eyeball their rib-eyes.
Russolillo and her husband Ray learned the hard way that ordering produce online is a lot trickier than buying a box of cereal or a bag of dog food. “The picture showed a bunch of bananas. So we ordered what we thought was one bunch of bananas,” Ray says. “The delivery came and we got one banana. Who buys just one banana?”
In the pandemic’s early days it seemed as though buying online groceries would become routine—or at least pick up a sizable number of converts. “The customer demand we expected over the next two-to-four years has happened in the last two-to-four weeks,” Instacart Chief Executive Officer Apoorva Mehta said in early April, a time when most Americans were under strict stay-at-home orders. Visits to Walmart’s online grocery site that month soared more than fourfold, according to data tracker SimilarWeb, fueling the retailer’s fastest quarterly sales growth in almost 20 years.
But even in cities hardest hit by the pandemic, more than 7 in 10 people have continued to visit stores for groceries and other essentials, according to surveys by the consulting firm McKinsey & Co. In states with more relaxed restrictions, the figure is more than 8 in 10. Over one-third of shoppers say they’ll decrease their use of web groceries or stop ordering food online altogether when shelter-in-place restrictions ease in their area, according to a survey conducted for Bloomberg by Civic Science.
“We’ve already hit the high water mark and people are getting back to some normal habits,” says Kurt Jetta, founder of research firm TABS Analytics, who has been studying the grocery industry for 25 years. “People really like going to the grocery store.”
Consider Stacy Yore in Boca Raton, Florida. To call her a discerning grocery shopper would be an understatement. She likes her bananas on the small side with just a touch of green. She knows marbling enhances steak’s flavor, but prefers to pick out a lean cut herself for health reasons. And grapes, don’t get Yore started: “They have to be a particular shade of yellowish green. If they’re just green they’re sour but if they’re yellowish green they’re ripe and sweet and delicious.”
“The delivery came and we got one banana. Who buys just one banana?”