Online grocery is arriving: are you prepared?

Online grocery is entering mainstream retail this year.

In the United States, AmazonFresh grocery delivery is expanding in up to 20 markets by the end of 2014. Walmart’s To Go grocery delivery and pick-up test is rolling in Denver, with management asserting ambitions to lead in this space.  Kroger’s acquisition of Harris Teeter gives this lead grocer access to 140 or so pick-up points, while its purchase of Vitacost elevates Kroger’s online retail expertise.

Broadly, Kantar Retail forecasts that total grocery sales online will rise at a compound annual growth rate (CAGR) of 12% from 2014 to 2019 in the U.S.

Lead Canadian retailers are likewise investing in this space. Loblaw has announced plans to test order pick-up in Toronto this fall. started selling grocery items online last year and its introduction of Amazon Family and Subscribe & Save signals further positioning to capture grocery sales. Sobeys has long-offered online grocery in certain markets through Thrifty Foods and, and Kantar Retail expects its efforts to expand to other urban markets as competition increases.

Walmart Canada has dramatically increased its online presence, re-launching its website and introducing consumables.  Further capabilities are expected through leverage of Walmart, Inc.’s innovation unit, @WalmartLabs.

Shopper demand is catching up. TNS Shopper 360 data found that 16% of Canadians said they have already bought groceries online at some point.  Only about half (51%) say they definitely will not buy groceries online in the next year.  As more services launch and availability increases, we expect interest in the services to rise further.

Indeed, Kantar Retail forecasts total grocery sales online to grow at a CAGR of 13% from 2014 to 2019 in Canada.

With online grocery advancing in North America, Kantar Retail is looking across the pond to the United Kingdom and France to help retailers and suppliers anticipate the sweeping changes to come.  These markets are comparatively advanced, with online grocery penetration already representing roughly 4% to 5% of sales. And strong is growth continuing, with fast moving consumer goods (FMCG)2013 online sales picking up 54% in France and 16% in the U.K., year-over-year, according to Kantar Worldpanel.

Moreover, new advancements continue to be revealed.  For instance, Walmart’s ASDA division is expanding same day grocery services to all 250 of its order pick-up locations. Tesco recently re-launched its grocery ordering website to facilitate a faster and more engaging user experience – requiring significant changes in how brands can bring their online shopper marketing activations to life.

To discuss further, join us at the Canadian Retail Forum on September 23, 2014 in Toronto where we will examine the strategic trajectories of lead retailers, including Loblaw,, Walmart, and Costco.   For an immersive deep dive in digital retailing, join us at our eCommerce Forum on September 16th and 17th, 2014 in New York City.