Demand for online grocery has surged during the pandemic, outstripping the delivery and in-store collection capacity of many grocers. But what of the next five years? We modeled three 2020–25 scenarios around variables such as how quickly a cure or vaccine is found and the quality of the customer experience. In all three scenarios, penetration is poised for a marked acceleration. This poses a challenge to the industry. Online grocery is usually less profitable than in-store transactions. To avoid damaging dilution, executive teams need to act now to improve the economics of the channel.
Now that Covid-19 has accelerated demand for deliveries and pickups, grocers urgently need e-commerce to start paying its way.