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Retailers look to collect profit in online grocery

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September 6
1:12 PM 2013

According to a Reuters report, European retailers had gone back to turning their online food businesses profitable. This was through a click and collect grocery option. In the last decade, e-commerce had revolutionized trade in books, music, clothing and electronics. However, food segment online had seemed to be difficult to succeed in.

The same report stated that the grocery segment represented around 40% of retail sales. Food products sold online provide a profitable internet option. However, it represented a low revenue margin and is a complex business as chilled products had become pricier compared with non-perishable food items.

Even Amazon had made tentative steps into food retail, although it had been preparing expansion to 20 urban areas by 2014. Food retail trials had been conducted in Los Angeles and San Francisco. The online platform said that it would expand outside the US if the trial worked.

IGD, a food and consumer research group, forecasted that French online grocery sales would push to EUR10.6 billion by 2015 from EUR6.7 billion in 2013. Home deliveries were also seen to have pushed UK online grocery to EUR11.4 billion in 2016 from EUR7.4 billion in 2013.

Online retailers had been investing most in easy-win, drive-thru systems on existing stores. The system would allow staff pick online orders rather than go to warehouses and place automated order selection. Online orders were seen to be expensive but more efficient in the long run.

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