Grocery E-Commerce Popularity Proves Not as Profitable

A new study shows that despite the popularity growth in digital grocery retail, the profitability is not as high.

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Anna/Adobe Stock

While consumers are more interested now than ever in online grocery shopping, grocers find that their efforts in this area are not as profitable, according to a new report from Wynshop. Eighty-six percent of Wynshop of grocers who responded to the survey indicated dissatisfaction with profitability for online efforts. In 2020, these retailers saw an increase of 9.5% in revenue in digital grocery shopping but saw losses of negative 70% on online orders. Almost all grocers, 84%, worry about losing touch with shoppers by using a third-party shopping application. 

Per  PR Newswire

  • Third-party platforms like Instacart transacted almost as much business as grocers did on their own in 2020. The State of Digital Grocery: Growth at the Cost of Profitability study summarizes the inefficiencies retailers experience with digital operations and explains why grocery retailers need to focus on operational levers, upgrade their technology, and overcome their dependency on third-party platforms to plug the profit leak.

Amongst other key findings from the study, U.S. grocery retailers reported that:

  • 59% of their third-party delivery partnerships are unprofitable
  • 92% are dissatisfied with their online order picking efficiency
  • 86% are dissatisfied with their labor utilization
  • 72% lack an accurate view of their store inventory