We’ve been hearing for years that physical grocery stores are in big trouble, as the popularity of online grocery shopping steadily increases. And Amazon’s recently-announced plan to purchase Whole Foods Market solidified many analysts’ opinions – grocery stores are doomed.
But maybe not, if you ask the people whose opinions really matter – grocery shoppers.
In a recent survey of grocery shoppers conducted by Morgan Stanley AlphaWise, only 15% said they were “very likely” to order groceries online in the next six months, while 37% were “very unlikely”. The top reason offered for not shopping online was a desire to physically see and feel items, particularly perishables.
Plus, why buy online and wait for delivery, if there’s a grocery store right down the street? The survey found that “convenient location” is the number-one factor for shoppers in determining where they get their groceries, followed by “lowest/best prices”.
“We believe convenient store locations and a sensory purchasing experience are factors that limit the attractiveness of online grocery to consumers,” the survey takers wrote.
Shoppers who do buy groceries online are more willing to buy their nonperishables over the internet, while buying their produce, meat and bread at their local store. According to a separate recent study from the Food Marketing Institute, baby food, pet products, household cleaning items, salty snacks and sweets are among the products most likely to be purchased online.
But not everyone is reluctant to order perishables online. A third recent survey, by the market research firm TrendSource, found that people were more willing to buy perishables when shopping online with their local grocer, as opposed to an online-only retailer.
“Perhaps shoppers find comfort in knowing their items are only traveling a short distance, or perhaps they have more faith and trust in their familiar grocery vendors,” TrendSource wrote in its report.
So could that be the real genius behind Amazon’s purchase of Whole Foods? Shoppers who are reluctant to buy all of their groceries from Amazon, might be more willing to buy online from their neighborhood Amazon-owned Whole Foods.
There’s just one catch. The Morgan Stanley survey found that 70% of shoppers who choose not to get their groceries at Whole Foods said it was because the store’s prices are too high. Whole Foods also ranked dead last among all grocers included in the survey, when it came to having convenient locations.
So Amazon may have its work cut out for it.
The good news, for all grocery retailers, is that consumers like to shop around. So plenty of stores might still be able to get a piece of the pie. 63% of shoppers in the Morgan Stanley survey said they typically buy their groceries from at least three different stores, choosing different stores for different types of purchases. Only 11% shop at just one favorite location.
“With retailers across segments serving different consumer needs, we do not see food retail as a winner-take-all industry,” the Morgan Stanley report concluded.
So don’t fret that the growth in online grocery shopping will drive your favorite grocery store out of business just yet. If anything – it may provide you with more choice than ever.
