Online purchases are a small part of grocery sales at present, but within a few years, the average U.S. household will spend $850 annually on food and beverage purchases over the internet, according to an estimate by Nielsen and the Food Marketing Institute (FMI). A consumer group warned on Wednesday that digital grocers “are generally undermining Americans’ efforts to eat well” by flooding shoppers with pop-up ads and promotions for junk food.
“Already grocery websites are rife with promotions,” said the Center for Science in the Public Interest after examining the practices of six national chains. “More than half of food and beverage promotions on online retailers’ home pages and search result pages were for unhealthy products, and more than three-quarters of food- and beverage-related emails sent [by retailers] promoted unhealthy products.”
Many of the gimmicks used in grocery stores to encourage impulse buying and to promote purchases of soda, chips, candy, and cookies are appearing in online sites, said the CSPI. “Position and placement matter just as much with digital marketing as they do at the supermarket,” said Margo Wootan, CSPI vice president for nutrition.
“Our latest industry report that surveys members on their health and wellness programs … suggests that 70 percent of our members were extending healthy promotions online,” said an FMI spokeswoman, referring to the 2019 Retailer Contributions to Health and Wellness report. She said a quick visit to websites for three of the companies in the CSPI report found links for “a fresh start,” “smarter choices,” or “fresh favorites.”
“Retailers use search and purchase histories to craft targeted promotions that take advantage of individual vulnerabilities,” said the CSPI report. “In a system that favors the largest industry actors, farmers and produce companies are not the only ones who lose out. Customers, especially those with less income, have less exposure to healthy foods.”
As a remedy, the CSPI recommended that the Federal Trade Commission study the marketing practices of online grocers, including the use of a customer’s purchases and personal data in shaping website and email promotions, and banning retailers from sharing customers’ purchase and search histories with food companies. Food retailers “should redesign grocery websites to support healthy eating, rather than undermine it,” said the CSPI, with such steps as highlighting healthy foods in promotions on their sites and in emails to customers, and featuring healthy options in product-search results.
To help SNAP shoppers, the consumer group said the USDA should require retailers to highlight healthy foods and beverages, use price promotions to encourage the purchase of healthy foods, and provide information on unit pricing “so that price-sensitive customers can more easily compare product value.” The USDA is running a pilot program for online grocery shopping by food stamp recipients with the goal of offering the option nationwide.
“In as few as five [to] seven years, 70 percent of consumers will be grocery shopping online,” said Nielsen and FMI in a 2019 report. “Omni-channel shopping has passed the tipping point, with online grocery shopping on an accelerated path to industry saturation.” The report estimated that Americans would spend $100 billion a year, or $850 per household, by 2022 or 2024.
The CSPI report, “Scroll and shop: Food marketing migrates online,” is available here.