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Grocers remain optimistic despite disruption

grocery cart

Many grocers still see online commerce as the biggest threat to their businesses.

That’s according to a survey by TD Bank, which found that many grocers are increasingly worried about e-commerce. Nearly 30% of respondents ranked new e-commerce channels as the biggest challenge to their business, followed by keeping up with evolving technology (26%) and changing consumer behaviors (25%). Grocery e-commerce sales in the U.S. will grow 18% this year, making it the fastest-growing product category online, according to 2019 data from eMarketer.  

In the TD Bank survey of food and beverage professionals, conducted at the 2019 Groceryshop conference, 76% of respondents said they expect some form of revenue growth in 2020. Most (70%) expected growth to be slow and steady as opposed to the 30% who forecast significant growth. Interestingly, among the respondents who had started thinking about financing, preparing for growth was a top priority.

Other survey highlights are below.

• Fifty-seven percent of respondents said that convenience shopping will be the biggest consumer behavior to impact their business, followed by a focus on healthier eating habits (17%), cost-conscious shopping (17%) and sustainability and environmentalism (4%).

• Brick-and-mortar continues to dominate the industry, and most respondents (56%) said that online sales represent less than 20% of total sales.

• Grocers were split on where they are making the most investments in delivery services between traditional brick-and-mortar, buy-online pick-up in-store (BOPIS) and online. 

• BOPIS narrowly beat out brick-and-mortar and online delivery as the preferred choice for 34% of respondents.

 “E-commerce is rapidly changing the way consumers buy groceries,” said Joseph Nemia, head of asset-based lending at TD Bank. “Traditionally, the industry catered to consumers shopping at brick-and-mortar stores, but this is changing with the use of technology and mobile devices offering options of online ordering, buy-online pick-up in-store and home delivery. To remain competitive, grocers need to invest in channels that deliver speed, convenience, and savings for consumers.”

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