Delivery Fees a Drag for Online Grocers
Online grocery sales still only account for approximately one percent of the $631 billion U.S. grocery market, but reports that companies like Amazon, Walmart, Peapod and Good Eggs are expanding their grocery delivery services into new test markets has raised awareness of the trend.
While most of the industry has been hesitant to expand into the online retail market due to economic factors like the heavy upfront investment costs, the logistical challenges with delivering perishable items, and the inherently low margins with selling food, global ratings agency Fitch Ratings discovered that consumers’ resistance to delivery fees is playing a role in holding back growth in the sector. With fees that range from $6 to $10 per order, it turns out most consumers are deciding the convenience of having their groceries delivered right to their door is not worth the added cost.
Fitch Ratings predicts modest growth in the online grocery market—just 2 to 3 percent over the next 10 years—and cites this slow pace of growth as a major factor that will limit the number of new entrants into the online market, while slowing the pace at which existing companies in the sector will expand.
Halifax “Port Days 2013” Focuses on the Food Chain
Canada’s Port of Halifax and Canadian National (CN) Railway are focusing on the food value chain, growth markets and cold chain strategies during the Port Days 2013 event set for September 19.
Attendees can meet and network with industry leaders from the Port of Halifax, ZIM Integrated Shipping Services, Maple Leaf Foods, Loblaws and CN Railway.
Claude Mongeau, president and CEO of CN Railway is scheduled to give a presentation from 11:45 AM - 2:00 PM Eastern.
For more information, including registration for online remote access to Port Days 2013, visit www.portofhalifax.ca.