Jun 23, 2021 - Economy & Business

Online grocery's staying power

An illustration of a bag of groceries covered by a giant cursor all against a yellow background.
Illustration: Sarah Grillo/Axios Visuals

Online grocery was a minuscule part of food retail before the pandemic. Now, about 60% of U.S. consumers have bought groceries online in the last 12 months, and most of them plan to keep doing so post-pandemic, according to a report from Coresight Research.

Why it matters: The rise of online food shopping is leaving behind smaller chains or mom-and-pop grocers that can't afford to offer delivery — turning grocery into a survival of the biggest players.

  • It's also fueling the creation of more gig jobs, as companies like Amazon, Walmart and Instacart search for workers to feed the spiking delivery demand.
  • All this is strengthening the pandemic-induced stay-at-home economy — one which deepens the U.S.'s economic divide.

What's happening: The online grocery market swelled to $55.5 billion in 2020, an 81% increase from 2019, per Coresight, and that growth is expected to continue — albeit to a lesser extent — in 2021.

One of the big drivers of growth in the grocery delivery market is older customers, experts say.

  • "We’ve had reluctant tech adopters forced to adopt tech in ways that they wouldn’t have done in years or ever," says Betsey Stevenson, a University of Michigan economist.
  • According to Coresight's survey, 62% of current online shoppers between the ages of 45 and 60 and 55% of those over the age of 60 plan to continue to use those services as frequently or more frequently after the pandemic.
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