When Amazon announced its deal to buy Whole Foods, the instant analysis was that groceries would be the next big thing in online shopping. If so, there is a lot of room for growth since a sliver of Americans – 9 percent, according to Gallup – say they order groceries on the internet at least once a month.
The number of regular shoppers is smaller still: 4 percent of adults order groceries online once a week or more often. By comparison, 83 percent said someone in the family goes to the store at least once a week, according to a Gallup survey conducted by phone in early July.
“Shopping for groceries online has a long way to go before it catches on with the vast majority of consumers, who mostly do their grocery shopping in person,” concludes the polling organization, while noting the potential for change. Convenience stores are siphoning away grocery traffic for one thing and Americans are spending a larger share of the food dollar on restaurant and carry-out food for another.
“At this point, online grocery shopping appears to be an adjunct to retail shopping rather than a replacement,” said Gallup. In the course of a year, almost everyone goes to the supermarket, while 84 say they never order groceries online.
Easterners and city residents are the most likely groups to buy groceries on line at present, although the rates are only modestly higher than for other regions and populations. “Working adults, perhaps because they have less time to shop, are almost twice as likely as those who aren’t working to do their grocery shopping online,” said Gallup. Income level was not a factor.
When Whole Foods is combined with Amazon, shoppers may feel more confidence in grocery shopping by Internet, analysts told MarketWatch. “It’s an issue with ‘touch and feel,'” said MarketWatch; consumers like to chose produce, meat and dairy products themselves and worry about a grocery delivery sitting for hours on the doorstep. Analysts said Whole Foods’ reputation as a high-quality grocery would alleviate concerns about getting value for their dollar online.
In the Gallup survey, Americans estimated their households spent $130 a week on food, little changed from the $125 a week reported in 2012. The figures are a median, meaning half of the households spent more and half spent less. The USDA says food prices rose by 6 percent since 2012. Gallup said its figure for weekly spending may have remained stable because of declining size of U.S. households and the rising share of money spent at restaurants. “It is possible that survey respondents are not counting increasing restaurant expenditures,” it said.
Separately, the USDA said “food away from home” prices rose by 2.5 percent a year since 2009 while grocery prices rose at an annual rate of 1.4 percent. Before 2009, the two categories advanced at a fairly consistent rate. Salaries and benefits in the food service industry have been rising steadily, says USDA, whereas lower energy and commodity prices have constrained the rise in grocery prices. In fact, grocery prices declined in 2016 by 1.3 percent, the first instance of deflation since 1967.