Consumers are creating demand for groceries from non-traditional retail sources
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EmailFrom tech-savvy millennials to seniors, more people are seeking new and convenient ways to buy their food.
The USDA Economic Research Service (USDA-ERS) tracks the purchases of food sold in both traditional and non-traditional retail settings. Traditional stores are grocery stores, including supermarkets, convenience stores and specialized stores. Non-traditional stores include such outlets as mass merchandisers, drug stores, warehouse clubs, supercenters and other retailers, such as dollar stores. They also track non-store sales from mail order, home delivery and direct sales by farms, processors and wholesalers.
According to USDA-ERS, non-traditional stores' share of food at home sales increased from 13.7 percent in 2000 to 21.5 percent in 2011. While most of this increase is due to supercenters, warehouse club stores, and dollar and drug store food offerings, home delivered groceries sales are also increasing.
Most companies providing home delivered groceries accept an order placed online. A delivery time is established and confirmed. Then, the order is fulfilled and delivered. Some companies charge a delivery fee, but many do not. As these services expand and more customers are placing orders, the costs associated with delivery are shared among more customers.
Who are the customers ordering groceries online for home delivery and why? The Neilsen Company observes that “the first generation of ‘digital natives’ are forming households. To these tech-savvy media mavens, online is a way of life for convenient, on-demand and personalized attention.” These consumers are always connected and bring with them a “what I want, when I want it and where I want it” perspective to their consumer habits. Additionally, the food preferences of these consumers, their urban lifestyles and some not owning an automobile make home delivered groceries an attractive alternative.
Working families often balance busy work schedules, commuting time, managing children’s activities and the maintenance of a household. The convenience of home delivered groceries may be worth the additional cost if they provide solutions to time management challenges.
Older people who wish to live independently in their homes are also attracted to home delivered groceries and other goods. Seniors who live alone but prefer to remain in their home as opposed to institutional alternatives find the inconveniences of shopping in a traditional grocery store limiting. Having to find transportation to and from a grocery store, shopping and then carrying bags of groceries back home are eliminated by receiving home delivered groceries. This service may allow them to remain independent longer.
Online shoppers may also find they have access to a wider variety of food than they may find at a grocery store. Others report that they make fewer impulse buys when they don’t have the distractions of shopping traditionally.
For now, consumers will most often find home delivered grocery services provided in more populated areas due to economies of scale, especially regarding delivery expenses. Michigan State University Extension does not endorse or recommend specific companies or services. However, a quick online search using the keywords “home delivered groceries” will help you locate a nearby service, if it exists. A search for the Grand Rapids, Mich. area, for example, quickly yielded three home delivered grocery services.
MSU Extension has community food systems educators who provide technical assistance and information about community food systems. Use MSU Extension’s Find an Expert search function using the keywords, “Community Food.”
