The disruptive nature of the COVID -19 pandemic is – as expected – going to cause long-term economic ramifications on retailers around the world. While some retailers are suffering from a reduction of foot sales due to lockdown, others have risen to the challenge and have reinvented their models to survive the pandemic.
As such, we are now seeing a surge in the number of people shopping for their food online. Recent surveys show that British pensioners are now spending 94% more on online food deliveries than they did in April last year.
However, the increase in online demand is quickly outpacing retail fulfilment centres – a trend experienced in other countries such as Canada. It comes as no surprise that Ocado recently launched an automation-heavy fulfilment centre here, allowing food retailers to offer home delivery.
Is it working?
The move to increase online capacity by retailers seems to be working as online sales now make up more than 10.2% of all grocery sales – a 2.8% increase from last month.
However, although the over 65s are spending more on online grocery shopping, households are now shopping for groceries less often than they did in previous months. The grocery sales growth is now at 5.5% compared to 20.6% in March. This change in shopping behaviour can be attributed to the government’s advice on minimising the number of shopping trips.
According to Thomas Bereton, a retail analyst at GlobalData: “Online food shopping is an avenue that food retailers have to consider. While home delivery has always been considered unprofitable to food retailers, this increase in online food sales due to Covid-19 should see more businesses offering it.”
Bereton adds that the customer fulfilment centres (CFC) model, such as the one offered by Ocado in Canada, seems to be an ideal solution for food retailers wanting to tap into the 29.2% rise in the number of global consumers shopping for food online.
This trend will continue if the lockdown period goes beyond May 7th. Before COVID-19, Friday and Saturday were the most popular shopping days, but it is now getting trickier to find a quiet time to shop throughout the week. This could back the trend of more people opting for home deliveries, even post COVID-19.