US switching off online grocery shopping

Many of the trends we see in the UK market first take place in the US and then jump across the pond, but in the case of grocery home deliveries there is a major divergence between the two markets.

While online grocery shopping continues to grow at a rapid pace in the UK, it appears to be a different story across the Atlantic. In the past week the competitive UK market has digested the news that Waitrose is scrapping its delivery charges and Ocado is to sell 4,000 Waitrose own-label products at a cheaper price than is available in the grocer’s own stores.

The former is bound to have repercussions, as the other major grocers take a close look at their delivery-charging models, and although the latter will have less impact on the wider market it does signify how desperate Ocado is to grow its share of business.

In contrast, in the US, Albertsons announced that it is to stop its home delivery for online orders in all its markets. The only thing it is retaining in certain areas is online ordering for collection in-store, which it says customers regard as a convenient way to shop.

The divergence in the two markets must largely be down to the high density of delivery drops achievable in the UK whereas the vast distances between shoppers in the US does not justify the cost to retailers of offering home delivery services for low margin grocery products. This is undoubtedly why it is still viable in higher density conurbations like New York where FreshDirect is a popular service.

This is at the heart of why Tesco is the world’s biggest online grocer and the significantly larger US market has nothing that comes close to comparing with it.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: