6 Grocery Store Trends
6 Grocery Store Trends
The need for alternative grocery shopping options surged during the COVID-19 pandemic as people looked for safer ways to buy food. The Manifest surveyed 501 people about their grocery shopping habits in the past three months and found that people trust Instacart the most for grocery delivery. People have also seen their average grocery bill increase as the cost of food rises with supply chain disruptions.
Mary is worried.
She’s gone to three grocery stores in the past two hours and still can’t find a bag of flour. She’s watched as people throw piles of produce in their carts until the shelves sprawl empty down the aisles.
People are preparing for the worst, and Mary is out of luck buying food for her favorite meal.
Luckily, grocery stores have an answer.
While grocery delivery services like AmazonFresh and Instacart have always been an option for people, the pandemic created a surge in popularity for these alternative grocery shopping methods.
More stores now also offer curbside pick-up as a cheaper option for people looking to stay away from crowded store aisles and not pay delivery or service fees.
The Manifest surveyed 501 people about their grocery shopping habits during the COVID-19 pandemic and the benefits and challenges of using services like Instacart and AmazonFresh.
We found that while most people continue to shop for groceries in-store, 17% of consumers opt for alternative grocery shopping methods, and 38% of people have seen an increase in their average grocery store bill during the pandemic.
How are grocery stores responding to these changes?
While the demand for groceries grows, physical stores face larger competition from delivery services like Instacart and AmazonFresh. With this sudden switch in shopping behavior, traditional grocery stores may have to reevaluate their delivery options to compete with these big tech brands.
- Nearly two-thirds of people (62%) prefer to buy groceries in person at the store during COVID-19, while 22% opt for safer methods like curbside pickup (10%) and grocery delivery services (12%).
- More than one-third of people (38%) say their grocery bill increased during the past 3 months, indicating that people are eating differently during the pandemic.
- More than half of people (53%) trust Instacart and its partner companies the most to deliver their groceries, beating huge competitors like AmazonFresh (21%) and Peapod (5%).
- About half of people (52%) believe the main benefit of using a grocery delivery service is saving time, while only 11% use grocery delivery services because they are safer during COVID-19.
- Almost one-quarter of people (22%) say their main challenge with grocery delivery is the delivery and service fees, which add to the overall cost of groceries.
6 Grocery Store Trends
- Americans still go to the grocery store to purchase food during COVID-19.
- Not as many Americans use grocery delivery services as expected during the pandemic.
- The average grocery bill increased during COVID-19.
- People trust Instacart the most for grocery delivery.
- People use grocery delivery services because they're convenient.
- People avoid using grocery delivery services due to price.
Grocery Store Trend #1: In-Person Grocery Shopping Still Dominates the Supermarket Industry
People continue to shop in grocery stores, but they limit how frequently they shop each month, by stocking up on more items at one time.
Almost two-thirds of people (62%) continue to buy groceries from physical stores during the COVID-19 pandemic instead of using grocery delivery services or curbside pickup.
While most people still prefer to shop at stores, weekly grocery shopping has gone down 20% as people seek to limit their time in public areas.
Lisa Hugh, founder and CEO of Single Ingredient Groceries, explained how she has adjusted her grocery shopping behavior to limit her shopping trips.
“Pre-pandemic I tried to buy only exactly what I needed and not have an excessively stocked pantry,” Hugh said. “Now, my goal is a very well-stocked pantry.”
Now, my goal is a very well-stocked pantry.
With people frequenting stores to stock up on food, what are supermarkets doing to keep consumers safe?
To prevent the spread of the virus, certain national supermarket chains are requiring people to wear masks inside the stores. These supermarket chains include:
- Sam’s Club
- Whole Foods
Grocery stores also encourage consumers to social distance within the store by keeping 6 feet apart. With these measures in place, 62% of people believe it is worth the risk to shop in person at the grocery store.
Grocery Store Trend #2: Only 12% of People Have Used Grocery Delivery Services During COVID-19
While only 12% of people have used grocery delivery services during the pandemic, this change still indicates a significant uptick in the popularity of grocery delivery services. Only 3% to 4% of grocery spending previously was done online in the U.S. but has tripled to 10% or 15% due to the pandemic.
Specifically, grocery delivery service Instacart saw a 500% increase in orders and hired 300,000 new shoppers to keep up with the rise in demand.
Christina Cay, creator of C’MON MAMA, a blog about motherhood, explained how her opinion of grocery delivery services changed after trying it for the first time.
“Prior to the COVID-19 pandemic, I had never used a grocery delivery service in my life,” Cay said. “I have exclusively used grocery delivery services for the past 5 or more months, and I'm never turning back.”
I have exclusively used grocery delivery services for the past 5 or more months, and I'm never turning back.
While people may be hesitant to try delivery services, consumers quickly realize they can provide an easy alternative to shopping in-person.
“At the beginning, I missed going and picking out things like I was accustomed to,” Cay said. “But now, I don't think we'll ever not use a grocery delivery service. It's too easy, too efficient, too convenient, and too streamlined to give up.”
Grocery delivery provides a safe way to receive groceries on-time, and customers recognize the convenience of ordering groceries from the comfort of their homes.
For example, AmazonFresh, Amazon’s grocery delivery service, has one of the highest overall customer retention rates with 54% of customers ordering again within 30 days of their first order.
People also use curbside pickup to limit their contact with other people. One in ten people (10%) have used curbside pickup at the grocery store in the last three months. They order groceries online and then drive to the store to pick up their packaged groceries outside.
Grocery delivery services and curbside pickup offer safe and convenient options for people looking to stay away from physical stores and still receive the groceries they want.
Grocery Store Trend #3: More Than One-Third of People Say Their Average Grocery Bill Has Increased During COVID-19
With limited restaurant and eating options, people’s spending habits on food have changed. More than one-third of people (38%) say their average grocery bill has increased during the pandemic.
About one-quarter of people (23%) say their grocery bill has increased by more than $50, while 15% say it has increased by less than $50.
Only 47% of people say their grocery bill has not changed; 15% of consumers say their grocery bill has decreased.
Why Are People Spending More on Groceries During COVID-19?
Because food costs more now.
As people stockpile food and limit trips to the grocery store, there is an increase in demand on the food supply chain. Recently, companies that handle food processing have been hurrying to hire more employees to help fulfill the orders.
People are eating at home instead of in restaurants. This sudden switch in dining habits has disrupted the cadence of the food supply chain. Restaurants receive food differently than grocery stores as they are sent different packaging and have separate delivery procedures.
For example, distributors must switch from packaging milk in half-pint cartons for schools to gallon containers that people like at home.
This change puts pressure on supply and drives up prices.
Francine McQueen, founder of Marlenee PR, a freelance public relations firm, explained how she adjusted her buying due to the pandemic.
“I am buying more in bulk, although there are just two of us,” McQueen said. “I’ve purchased multiple cans, multiple packages of rice, cereal, and bags of apples. In the past, I would just buy one or two pieces of fruit, then go back to the store every few days.”
I am buying more in bulk, although there are just two of us.
With a change in grocery behavior like McQueen’s occurring nationwide, food supply chains must increase prices to stay profitable.
Grocery Store Trend #4: Instacart Is More Trusted Than Amazon (But How Does Instacart Really Work?)
Instacart is the most trusted grocery delivery service, beating AmazonFresh and national supermarket chains like Safeway and PeaPod.
More than one-quarter of people (53%) trust Instacart and its partner companies to deliver their groceries safely.
One-fifth of people (21%) trust AmazonFresh, and 5% trust Peapod with their grocery orders.
Only 4% of people trust Walmart to deliver groceries on time and safely, although Walmart recently decided to partner with Instacart in August 2020.
Instacart became a massive success almost overnight when the global pandemic forced more people to consider shopping online. Due to the coronavirus, Instacart’s expected April profit was $10 million dollars, after it sold $700 million worth of groceries in the first two weeks of April.
April 2020 was the first time Instacart became profitable since its start in June 2012. With this increase in demand, Instacart received a new round of funding that launched its valuation to $13.7 billion.
How Does Instacart Work?
Available in 85% of U.S. households, Instacart is an on-demand grocery delivery business. The grocery app and website allow users to shop from local grocery stores online. Once the shopper submits her order, Instacart sends a “personal shopper” to fulfill and deliver the order on the same day.
What Makes Instacart Different From Other Grocery Delivery Services?
While many grocery delivery services stockpile fresh produce in a large warehouse, Instacart shoppers actually shop at major local grocery stores, pick up everything on your list, and then drive to your home in their own car.
This local shopping element could be why people prefer Instacart to AmazonFresh and other grocery delivery services.
Still, Instacart recently had its share of public issues. Instacart is now suing Cornershop, a delivery service majority owned by Uber, for IP infringement and stealing its product images, descriptions, and pricing data.
Thousands of Instacart consumers’ personal data like customer names, credit card numbers, and order histories are being sold for $2 per customer record.
With the data scandals, Instacart faced some public backlash. However, they still remain the most trusted grocery delivery company in the U.S.
Grocery Store Trend #5: Grocery Delivery Services Are More Time Efficient
As people switch to using grocery delivery services, they consider the benefits: an on-demand service versus traveling to a grocery store.
About half of people (52%) believe that the main benefit of using a grocery delivery service is saving time, not safety.
Only 11% of people believe the primary advantage of grocery delivery services is safety such as staying socially distant, indicating that grocery delivery may stay popular even after the pandemic ends.
Meanwhile, 10% of people like that grocery delivery reduces parking and gas costs, and 7% enjoy order personalization.
Saving time can be a major asset to a busy consumer. Ordering groceries online allows people to search for items quickly, select the type of food they want, and order it to their home at a time that works best for them.
Using the past order history button can also make reordering groceries easier than scanning the aisles for individual items.
Sherry Mae, CMO of Tankarium, a fish and aquarium e-commerce store, discussed how switching to delivery service impacted her life.
“Admittedly the pandemic has forced me to assess the time I spent [at the grocery store],” Mae said. “The time I save from physical grocery shopping can be used to build my skills or do relaxing activities with family and friends.”
Grocery delivery can be a huge win for busy people who are looking to shave off the hour a week they spend shopping for food and invest that time in a fitness class, social event, or other activity they want to pursue.
Food Retail Expert and Senior Vice President of Analytics at Inmar Intelligence, Jim Hertel believes online grocery shopping is here to stay: “I think a substantial portion of them will remain online shoppers.”
I think a substantial portion of them will remain online shoppers.
While the main surge in grocery shopping online is due to the pandemic, people find other benefits from using the service, including efficiency and convenience.
Grocery Store Trend #6: People Find Grocery Delivery Services Expensive
Delivery and service fees, bad produce, and inconvenient drop-off times are the top grocery delivery challenges.
Almost one-quarter of people (22%) say the main challenge with using grocery delivery is the delivery and service fees included in the price.
Meanwhile, 17% of consumers complain that they receive bad produce with delivery, and 11% say the drop-off times are inconvenient.
Only 5% of customers worry about data security and privacy, even with Instacart’s alleged recent hack.
The majority of people still shop in physical stores to buy groceries, which indicates that delivery services have room to improve, such as with fees and produce quality.
Once settling on price, people are then concerned about the quality of produce they receive from delivery services compared to picking out the items themselves.
“Obviously, produce is the item that feels like the wild card when you’re ordering online,” said Daniel Carter, founder of Zippy Electrics, an online guide to electronic riding gadgets. “But other stuff like canned goods and toiletries arrive exactly in the way we ordered them.”
People like Carter may have less control of the specific piece of fruit or vegetable they receive but recognize this is the cost of online ordering.
While delivery services could do a better job at reasonable pricing and quality assurance, loyal consumers gladly trade these challenges for the convenience of online shopping.
Grocery Delivery Services May Become Tough Competitors for Traditional Supermarkets
The COVID-19 pandemic triggered a change in grocery shopping behavior as people searched for safer ways to receive essentials.
While 62% of people still shop in stores during the pandemic, 22% of people have opted for more socially distant methods of shopping, including grocery delivery services (12%) and curbside pickup (10%).
People have also seen an increase in their average grocery bill as the cost of food surged with disrupted supply chains and limited eating options.
While food suppliers struggle to meet demands, delivery services like Instacart have seen a surge in orders. As the most trusted delivery service, Instacart faces new difficulties, including a lawsuit with Uber and an alleged data hack.
People, however, remain undeterred by the recent news and prefer Instacart over AmazonFresh and PeaPod.
People see other benefits to grocery delivery services, including saving time and order personalization.
Grocery delivery services, however, still have a long way to go in terms of customer experience: People say fees are too high and the produce selected is not always ideal.
With large numbers of people trying out grocery delivery services for the first time and liking them, supermarkets may need to prepare for long-term competition.
About the Survey
The Manifest surveyed 501 people across the U.S. about their grocery shopping habits. The survey ran July 27-31, 2020.
About 47% of the respondents were female; 40% were male and 13% declined to answer.