In this article we explore how established retailers will need to upgrade their business’s capabilities in order to adapt, survive and thrive against the online grocer threat. We assess the likely impact of e-commerce on the grocery market: where it is likely profitable, what it means for bricks-and-mortar food retailers, and how they should respond.
Online shopping has long threatened bricks-and-mortar retailers in other sectors, so far it has had less impact on food retailers. While food retail has always been a tough business with major grocery chains weathering repeated attacks from new competitors and new formats, a new wave of competitive threats is emerging with online grocery coming of age. At the same time, this new format presents opportunities that some traditional bricks-and-mortar players can harness to grow profitable sales.