New York, NY – While revenue for operators in the Online Grocery Sales industry fell during the recession, the industry's overall performance was not severely marred over the period. Over the five years to 2014, increased internet usage among Americans has driven robust growth for this industry, and revenue for online grocers is expected to continue its surge in 2014 as more companies enter the market to cater to increasing demand for internet retailing services.
Industry revenue declined in 2009 as per capita disposable income weakened and shoppers opted for lower-priced items. Some consumers even opted out of internet grocery shopping altogether, in order to avoid associated delivery charges. Nevertheless, growing incomes, falling unemployment and rising food prices have helped industry revenue and profit margins recover. According to IBISWorld Industry Analyst Will McKitterick, “Sensing heightened demand for internet-based delivery services, major companies like Amazon and Walmart are scaling up their operations. Meanwhile, a new group of highly focused online grocers, like Relay Foods, Door-to-Door Organics and others, are targeting niche markets across the country.” Companies have expanded over the past five years, building up their infrastructure to service new territories across the country. In turn, the number of industry establishments increased rapidly during the past five years
Growth of the Online Grocery Sales industry is expected to slow only slightly in the next five years, as increased consumer spending and ever-expanding internet access position industry operators for strong gains. “Rising employment will limit many consumers' leisure time, making online grocery options increasingly attractive,” says McKitterick. “Moreover, growing incomes will stimulate demand by making industry services more affordable.” However, larger competitors, such as AmazonFresh, will help drive down margins in an attempt to crowd out their competition, lowering the average industry profit margin.
Source: IBISWorld