The future of the grocery business is web based ordering and automated delivery to the buyer. Amazon will crush other grocers due to first mover advantage and their massive technology workforce.
Walmart has online pickup now. You order your groceries using their app, schedule a time, and pull up to get your groceries. It’s amazing. My wife and I order all our groceries this way. Since the minimum order price is $30, we’re wasting far less food and placing more orders. Before we’d go to Costco every two weeks, buy a bunch of perishables that would then go bad before we ate them.
It has saved us money and we love it. If there’s a problem we can immediately go back to the store and get a replacement or a refund.
Amazon needs to compete with THAT, and the customer service for when there’s an error, if they want to “crush” brick and mortar stores. Frankly, I don’t see what value they’d add compared to this.
Demographics will work against these legacy retailers and grocers. The elderly who are stuck in their ways and like physical stores will become less mobile while the younger generations would prefer more convenient choices.
Grocery pickup is absurdly useful. You ever had a hiking pack to whoever is bagging or try and fill it while doing self-checkout? It's not bad in all honesty but it's still more annoying than just picking it up curbside. Plus the side benefit on not whipping some kid in the face with bag straps because I turned around too fast.
Amazon bought Whole Foods a few years back.
Is grocery store overhead avoidable for Amazon? Amazon's biggest wins have come in places where carrying costs are not just large but easily reducible.
Books are heavy, bulky, and have extremely high product variety, so physical stores are large and require heavy curation. They're also stable, nonfragile, and open for artificially discounted consumer shipping via media mail. Amazon started there and won heavily because a warehouse in Omaha can win on variety and price nationwide.
Clothes are bulky and high-variety too, with different sizes adding 3x to 10x multipliers on product count. Physical clothing stores generally involve large spaces (fitting rooms, backroom with stock), heavy employee presence (reshelving, customer service), and high loss (theft, damage). Online sales suffer from the inability to try things on, but clothes are stable, relatively nonfragile, and lightweight. Amazon parlayed cheap shipping into generous return policies and avoided all the other overhead.
Large appliances are a similar story; highly varied, hard to stock, hard for consumers to take home, easy to store and ship in quantity.
But groceries? They come with huge carrying costs, definitely, and making grocery stores presentable is quite demanding. But many of those costs are inherent. Frozen goods need to stay frozen; lots of produce is too unappealing to sell; bulk produce (e.g. broccoli) stays moist, needs to be investigated for decay before it spreads, and requires steady turnover; delicate produce (e.g. herbs, greens) can't be stacked or treated roughly and turns over incredibly fast. Further, much of it has to be sourced and distributed fairly locally - and god help you if you let mislabeled or fraudulent products into your supply chain.
None of that dooms order-for-delivery groceries, but it means the pickers for those products will be going on-demand to a relatively local destination which looks relatively like an existing grocery store. There are efficiencies to be had like not needing prime "on the drive home" real estate and discarding checkout lanes, but it's nowhere near the same efficiencies as warehoused national distribution like clothing.
What sounds more likely to me is an increasing split into three different classes of food sale. Stable bulk goods reward the centralized model with cheap carrying costs, whether that's CostCo or Amazon, and can be sold on price above convenience. Staple perishables (milk, lettuce, apples, etc.) get sold on demand with localized distribution where possible - we already see farmer's markets staying in business but including not-actually-local goods like bananas. And speciality goods get sold by dedicated retailers both in person and online; spices and hotsauce are already better bought online, while exotic perishables are best found at boutique stores that don't try to compete with chains on staples. There's plenty of room in all that for Amazon and delivery groceries, but no obvious market dominance like we saw in other fields.
Who expects veggies to last two weeks.
Ain't helping that storing different kinds of veggies and fruit properly can be a science of its own [0].
[0] https://www.rd.com/health/healthy-eating/foods-never-store-t...
The US market probably has special practical problems that European markets don't have (low population density outside about five cities, in particular), but it's hard to see how Amazon will automatically beat the likes of Tesco in this just because they're a tech company.
And I think the ordering side is more important than you think. Doing a weekly shop with Amazon's awful website would be a miserable process; Tesco et al are already far ahead, there. I'm sure Amazon can catch up, but the idea that it has first mover advantage (except maybe in the US) is ridiculous. The big supermarkets also already have an extensive pre-existing warehouse system.
Even if last mile delivery has a driver, operational costs will be far lower.
Weirdly, when I was in San Francisco recently, I went to a Whole Foods (an Amazon owned supermarket). It didn't have automated checkouts at all! I'm unconvinced that Amazon is actually a leader in automated supermarkets.
RE the large real estate footprint, that's usually leased (at least here). As demand for physical supermarkets drops, they can just stop renewing leases.
I really can't imagine younger people going to physical grocery stores in the future.
Walmart owns the majority of its store locations.
Near to me, in North Dublin (Nice and close to the Airport; good access to Dublin Port), Tesco have their distribution centre. It's massive. Clearly visible from just about anywhere [0]
If I recall correctly, Wallmart in the USA were doing this back in the 90s ...
Food logistics is an entirely different ball-game compared to just shipping boxes full of entertainment electronics and plastic toys.
With food, you suddenly have to be mindful about things like the handling of the produce, storage conditions, uninterrupted cooling chains, health standards, best-before dates of products and a whole lot of other factors/regulations that don't apply to the current bulk of products sold by Amazon.
That was SuperQuinn right?
I remembered ordering from them back in the day. They had their own dialup (not over Internet) and a Desktop App that really worked quite well!
They were serious innovators ... couldn't do enough to "Crown the Customer", as old Feargal would have said.
Too bad property prices overtook their business model!
EDIT: Yeah, Tesco online shopping only became available here in 2000. Superquinn was definitely first.
I may be the exception for now, but everyone has their breaking point on lazy service. It's just a matter of when the goodwill runs out.
> You can usually have your shopping delivered between 10am and 9pm Monday to Friday, 10am and 7pm on Saturday, and between 12pm and 5pm on Sunday.
I assume other supermarkets are similar.
Apparently the slots are one hour, not two hour. I live basically beside a supermarket so just buy stuff on my walk home, so I'm rusty on how these services behave.
I do think it may be a slightly different question in the US; most US cities are much less dense than your average European city, which will presumably change things a bit. I don't see Amazon taking over the market in Europe, though.
Never used them, because their offers are a tad too expensive and their minimum is more than I spend a week, but it would pretty much be a no brainer if I had small kids to pick up.