Traditional grocers gaining ground with click-and-collection programs

The nation's supermarket retailers are positioning themselves to capture a significant majority of online grocery sales over the next decade or so.



That's according to Joe McKeska, president of Elkhorn Real Estate Partners. He made his remarks during a panel discussion at Marquette University’s annual commercial real estate conference.



“The prediction is for a significant portion of grocery sales to move online — from roughly 2% today to upwards of 20% by 2025,” said McKeska during “The Last Mile and Urbanization,” a panel discussion at the Milwaukee University’s Real Estate Strategies Conference on Sept. 18. “The ready assumption is that Amazon or other e-commerce players will take the lead, but this assessment may fail to weigh the significant progress U.S. chains have already made in developing their e-commerce capabilities, including bringing click-and-collect to their stores.”



A 25-year grocery industry veteran who previously headed real estate operations for Southeastern Grocers, and Supervalu, McKeska formed Elkhorn earlier this year in partnership with Melville, N.Y.-based real estate firm A&G Realty Partners.



McKeska noted that click-and-collect programs tend to be relatively affordable investments for traditional grocers.



“This is not the same thing as retailers having to spend significant capital to build a competitive e-commerce platform from scratch, or having to rely heavily on uneconomical home delivery services for the majority of their e-commerce sales,” he said. “In other words, traditional grocers have begun to identify ways to leverage their brick-and-mortar stores. They are rolling out more rational e-commerce business models as a bulwark against Amazon and other online companies.”



McKeska cited the impressive progress at both Walmart and Kroger, in particular, in rolling out click-and-collect programs.



“Walmart announced earlier this month that it rolled out click-and-collect to its 1,000th store,” McKeska told the audience. “That is out of roughly 4,200 stores if you factor in Walmart’s Supercenter and Neighborhood Market formats.”



For its part, Kroger aims to bring click-and-collect capability to its 1,000th store, out of approximately 2,800 in total, by the end of this year.