Online grocery sales have risen 200% YTD, according to Earnest Research, part of a broader boom in home cooking now that thousands of restaurants are closed. The $840-B grocery industry has been one of the few bright spots during this medical emergency that has hammered the economy.
Walmart Inc.(NYSE:WMT), Amazon.com Inc.(NASDAQ:AMZN) and startup Instacart Inc. are all reaping the rewards, and some e-Commerce analysts say the online grocery industry has hit the inflection point promised for decades.
But, hang on how much of that spending shift will hold is a guess. It is difficult to predict lasting behavior changes from this fear-driven surge, its growth peaked 5 wks ago.
Problems with online food shopping persist.
The operations are expensive to run, and limits on capacity and inventory abound now with supply chains upended.
The shopping experience can be clunky and confusing, especially for older consumers. And 1 thing this C-19 coronavirus chaos has not changed is that Americans still like to tap watermelons and eye steaks.
In the early days of this chaos it seemed buying online groceries would become routine or at least pick up a sizable number of converts. It has not.
In cities hardest hit by the disease, more 70% of The People continue to visit stores for groceries and other essentials, according to surveys by the consulting firm McKinsey & Co.
In states with more relaxed restrictions, the figure is 80%+. Over 33% of shoppers say they will decrease their use of web groceries or stop ordering food online altogether when shelter-in-place restrictions ease in their area, according to a recent survey.
Limited demand and the high cost of last-mile delivery are the Key obstacles for successful online grocery ventures, volume is Key to bringing the costs down.
As retailers jockey for positions, the next few months will be critical in assessing the lasting effects of The China Virus on shopping habits.
The Big Q: Will there be enough demand to justify the costs? And what drove the rapid increase in online groceries penetration?
The Big A: Nope and it was fear of catching the virus.
Som anyone who is rooting for online grocery shopping to stay at its current rate is rooting for the virus.
Wednesday, the major US stock market indexes finished at: DJIA +553.16 at 25548.27, NAS Comp +72.14 at 9412.38, S&P 500 +44.36 at 3036.00
Volume: Trade in the NYSE came in at 1.1-B/shares exchanged
- NAS Comp +4.9% YTD
- S&P 500 -6.0% YTD
- DJIA -10.5% YTD
- Russell 2000 -13.9% YTD
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Very Bullish across the board.
Looking Ahead: Investors will receive the weekly Initial and Continuing Claims report, Durable Goods Orders for April, the 2nd estimate for Q-1 GDP, and Pending Home Sales for April Thursday.
Have a healthy day, Keep the Faith!