The Future of Grocery Shopping in 6 Charts

With restaurants, cafeterias and sports stadiums either closed or operating at limited capacity during the pandemic, business has been good for the nation's grocery stores. Walmart's U.S. grocery unit, for instance, generated $208 billion during the 12-month period ending January 31, up 8% compared to the previous year. Kroger, Costco and Albertsons have all seen similar results. Apart from more revenue, life in quarantine has also altered behavior and accelerated trends in the grocery industry. Below are some highlights from half a dozen recent reports aimed at showing what might be next for shoppers, retailers and manufacturers. Online grocery booms The first chart shouldn't come as a surprise. In its "State of Grocery Report," analytics company 1010data reveals online grocery sales surged more than 500% in April. Although rates have come down since then, they still remain very much elevated compared to 2019 levels. "Today, mass delivery, buy online, pickup in-store (BOPIS) and curbside pickup sales are happening in previously unthinkable proportions," the report said. Investment in grocery delivery spikes In a sign of confidence people will continue wanting food and beverages delivered to their doors, funding for meal and grocery delivery companies hit $8.6 billion in the first quarter of 2021, up nearly 120% compared to the preceding quarter, according to CB Insights’ "State of Retail Tech" report. In March, for instance, Philadelphia-based delivery startup Gopuff raised $1.15 billion in new capital, doubling its valuation to $8.9 billion. The company's order volume increased 400% during the first half of 2020 compared to the same time a year prior. Shoppers get comfortable ordering fresh groceries on the web While online shoppers have long been OK with purchasing shelf-stable goods through digital channels, they've shown some resistance to fresh items. The pandemic seems to have changed this. In its "US Online Grocery Survey 2021," Coresight Research found a greater percentage of people who purchase groceries online now put fresh fruit and vegetables in their carts (up 13.4 percentage points). Similar increases occurred for frozen food, bread and other baked goods and fresh dairy products, meat, fish and eggs. Alcohol goes online Another product that saw rapid online adoption during quarantine was booze. Using Nielsen data, a new report from Zenith shows online sales of alcohol skyrocketed in the weeks following the outbreak. The Publicis Groupe media agency forecasts alcohol brands will increase digital ad spend 9.2% per year until 2023 to keep pace with the change in consumer habits. Digital sales captured just 1% of all off-premise alcohol volume in the U.S. in 2019, according to research group IWSR Drinks Market Analysis, but that figure is expected to hit 7% by 2024. Demand for plant-based options escalates Data from Instacart's new "Plant Power" report suggests plant-based food has grown from a niche category into something approaching mainstream throughout the pandemic. "Searches for terms like 'plant-based,' 'meatless,' 'vegetarian,' and especially 'vegan' took off on Instacart as consumers looked for healthy at-home meals during 2020 lockdowns," Laurentia Romaniuk, Instacart’s trends expert and senior product manager, said in the report. "And this trend is turning into a long-term lifestyle—search popularity has been growing even more in 2021." U.S. retail sales of plant-based food climbed to $7 billion last year, up 27% compared to 2019, according to a report from the Good Food Institute and the Plant Based Foods Association. Private labels maintain momentum In 2020, food and beverage private label brands, such as Costco's Kirkland Signature line and Kroger's Simple Truth, continued to chip away at the market share held by name brands, according to another report from Coresight Research. Store brands, which tend to be cheaper, outpaced name brands in sales growth for the fourth consecutive time last year, increasing 13.7% compared to 2019. Last month, Target and Amazon each introduced a new private label food brand. "Like countless other retailers, we make private brands available to give customers more choices, quality products and low prices," an Amazon spokesperson told Adweek in April. 2021 Looks Promising for Retail Exits—If Investors Don’t Get Too Greedy