Recently, Seeking Alpha, a large online community focusing on investing, published an article (How The COVID-19 Crisis Could Provide Long-Term Tailwinds) about grocery and e-commerce shopping using Kroger as a case study and the article featured AMC Global’s recent studies on consumer behavior regarding eating and shopping habits during the pandemic.
In the piece, author Chuck Walston shares that at the end of June, reports from Kroger displayed double-digit increases in revenues and sales. He states: “I see Kroger as a dynamic company. I believe the pandemic will provide long-term tailwinds, and I contend the company’s initiatives are bearing fruit.” Despite strong competitors in the marketplace, Kroger’s e-commerce sales have nearly doubled since the start of the COVID-19 pandemic.
When it comes to ecommerce grocery shopping, there are some obstacles. A few of these include: higher price costs, higher delivery costs, and lower profit margins. There are positives to stores offering online shopping like Kroger, and studies show that “20% of shoppers will switch retailers if online shopping is not offered, and 74% of those surveyed said when satisfied with their online shopping experience, they are likely to increase spending by up to 12%.” COVID-19 has brought many new customers to Kroger, and they are continuing to shop with Kroger. Online shopping had increased before the pandemic began, and has only increased since. Consumers want groceries delivered or placed directly into their cars. This is for convenience combined with wanting to avoid going into the large grocery stores and risking exposure.
Rodney McMullen, the CEO of Kroger says that, “when a customer first switches to online, it typically takes three or four years before that customers’ profitability is the same as when they shop in the store. But what we find is we get a significantly higher share of that customer’s total household spend.” So although there are negatives for grocers when it comes to online shopping, in the end it will result in positives. Another plus is that since restaurants have closed, home-cooked meals are gaining popularity.
To support the article, Walton references: “A study by AMC Global indicates Americans' eating habits may be altered by the pandemic. The research determined 32% of those surveyed intend to consume more home-made meals after the virus subsides. Until a vaccine is developed, 14% of consumers are reluctant to eat in a restaurant.” Consumers also intend to focus more on saving in the near future, so making meals at home instead of eating out will be a main focus for many. To learn more, check out our study.
For the complete article, please visit Kroger: How The COVID-19 Crisis Could Provide Long-Term Tailwinds