Food and Drink Internet Retailing in the US

PROSPECTS

Amazon’s entry into US groceries boosts same-day delivery services

Amazon.com Inc’s 2017 acquisition of premium grocer Whole Foods had a strong impact on groceries in the US.

Rapid expansion of curbside pick-up helps shift food and drink sales online

Alongside the rapid expansion of same-day grocery delivery services offered by grocery retailers across the country, 2018 witnessed the explosion in the number of curbside pick-up access points in hypermarkets, supermarket, and even discounters, to become an extremely important driver of value growth for food and drink internet retailing. Over the course of 2018, curbside pick-up leaders – such as Walmart Inc and Kroger Co – aggressively expanded the number of store locations at which they offered this increasingly popular service, while the likes of Whole Foods, Sprouts Farmers Market and Aldi began to pilot their own curbside pick-up services for the first time.

Meal kits struggle to attract new customers

One of the strongest trends in US food and drinks internet retailing over the review period was the rapid growth of subscription-based meal kit services. From 2017, these services delivered all the necessary ingredients required to cook a specific recipe straight to a customer’s doorstep, and were held up as one the primary drivers of growth in food and drink internet retailing.

COMPETITIVE LANDSCAPE

Walmart cements status as leader of curbside pick-up

From 2014, Kroger Co could claim to be the leader of curbside pick-up in the US, boasting a higher number of outlets that offered the service than any other grocery retailer. By 2018, however, Walmart – the largest retailer in the US – had surpassed Kroger in this area by a significant margin, as it expanded its curbside pick-up service for groceries to over 2,100 outlets.

Kroger pilots driverless grocery delivery

In December 2018, Kroger ventured into unchartered territory by becoming one of the first retailers of any kind in the US to use unmanned autonomous vehicle to deliver groceries to consumers. It partnered with Nuro – a robotics company based in Mountain View, CA – to use the firm’s R1 driverless vehicles in its delivery operations.

Aldi’s embrace of omnichannel points to food and drink internet retailing’s potential

With limited assortments of groceries sold at extremely competitive prices, discounters is often regarded as being more insulated from the threat posed by internet retailing than most other grocery retailers. However, in 2018, dominant discounter Aldi Inc demonstrated that it takes the potential threat posed by e-commerce seriously.

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