Disadvantages Of Grocery Shopping

Because the retail grocery market is typically low margin, “typically in the mid-single digit range”.(VALUELINE, 2013) It is critical for companies to have some type of cost advantage over peers, the larger chains may be able to obtain better and cheaper access to products than the independent stores(economies of scale). Labor is also a significant cost to retail grocers, representing 50% to 53% of total operating costs (EHOW, 2013). Other operating costs (including rent, utilities, transportation, and technology) are controllable by the company. Lastly, technology costs are key in the retail grocery industry in order to increase efficiency in operations and aid marketing aids. Point-of-sale systems can help to increase inventory turnover and sales and lead to better targeted customer marketing (COUNTERPOINTPOS, 2013)

According to MarketLine, the world online retail market expanded by almost 18% in 2010 and is predicted to reach close to $435 billion in sales. The market is expected to reach a 90% growth by 2015 and exceed $827 billion in sales. Listed in an article “Ecommerce Growth Statistics”, the average amount spent by each consumer is expected to rise from $1,207 per year to $1,738 per person by 2016. That is a significant increase. That shows that people prefer to shop online than going to the actual store in today’s society. Shoppers will spend on an average of $327 billion online shopping in 2016, which is about 45% from $226 billion in 2012. It is very evident that consumers will drive ecommerce into the future; especially e-retail. In just a few years, purchases online will be more profitable than ever, with others products and services available to purchase such as mobile and social allowing consumers to shop to their convenience. For retailers and

Trader Joe’s is a major food retailer who has developed quite the name for themselves. It has well over 350 stores in over 32 states and is expected to continually grow over the next few years (Bond, 2012). For over 50 years, Trader Joe’s has been providing quality customer services, products and a unique shopping experience for its customers. They have come a very long way from when they first officially opened their doors. Trader Joe’s started when its founder Joe Coulombe wanted to find a way to differentiate his 7-Eleven stores (Schermerhorn, Osborn, Uhl-Bien & Hunt, 2012). In the food retailer industry, Trader Joe’s has developed a process that works well and

1. The grocery industry is a commoditized industry, which makes it difficult for grocers to sustain through differentiation. Buyer power is high and thus, cost leadership and operational efficiencies are critical. There is fierce competition amongst various grocery stores, with the main players such as Loblaw and A&P holding multi-banner stores in various market segments. Traditional grocery stores also lose some of their market share to drug stores, convenience stores and other retailers who have entered the industry. Threat of substitutes from fast-food and take- away outlets is not as prevalent, since many grocery stores have started stocking ready-to-eat meals and have deli services available for consumers. Competitive

Gone are the days of waiting in long lines while at grocery stores with the hopes that that person in front of you will have a speedy transaction without the delay of a price check. The grocery shopping experience is quite different than when we were children. Many of us in the Generation X, Millennials, and Generation Z era are ditching the long lines and relying on apps to fill our fridges. However, while many of us are relaxing in the comfort of our homes and ordering a week’s supply of groceries, others are bypassing the cashier and are heading directly to self-checkout.

In the United States, the food retail industry is absolutely massive. According to Statista, this industry brings in nearly 5.27 trillion dollars annually and 594.4 billion of that is from grocery store sales. In this market, the 20-ton gorilla in the room is Walmart, racking in nearly 20% of the entire market at around 118 billion dollars in 2013 according to the Harvard Business School case study. Following Walmart, Kroger and Costco own the biggest next largest slices bringing in 76 billion and 71 billion respectively. In this highly competitive market that has some of the smallest margins of any industry it can be tough to get ahead and even tougher to grow. However, Trader Joe’s has managed to pierce what was once a very small world

Grocery shopping is more diversified and evolved than ever before. Individuals across the nation have access to everything from exotic products to unique delivery services. Often, specialty stores have limited locations whereas specialty services have a limited reach. However, two retailers have expanded to hundreds of locations while adhering to unexpected market positioning for previously untargeted market segments. Whole Foods Market and Trader Joe’s have become household names while also innovating beyond regional and national traditional chains. Despite comparable size in

Online commerce was introduced to consumers in the mid-1990’s, and in the years since, it has grown exponentially. It started out virtually nonexistent and has become a multi-billion dollar industry. Nearly every retail sector has entered online commerce; clothing, electronics, home, health and grooming items, even food and groceries are starting to gain traction online. Online commerce sites rival traditional brick and mortar stores such as Walmart and Target, as well as other big-box stores. As online retailers such as Amazon continue to expand, many brick and mortar stores have been making their way online, indicative of an increasing movement towards online commerce. With more than 80% of the online population having made an online

The Internet has changed the way we do virtually everything, including the way we shop. However, shopping is not the only thing that has changed. In the last decade we have changed the way, we apply for loans, study, and even plan a vacation. Doing any of these things would have been impossible a few decades ago. At present, online banking, paying bills, ordering new services, and shopping online have become part of our daily lives. Traditional brick-and-mortar stores have been around much longer than online stores, but we cannot deny that online shopping is giving the traditional stores competition. Many consumers still choose to shop at regular brick-and-mortar stores because they like to see and

This section will analyze the background, scenario, aim and reason behind to choose this particular topic that is Online Grocery (E-Grocery).

The grocery retail industry worldwide has grown in recent years to become one of the most intensely competitive industries due to the continuous amounts of new entrants. A grocery retailer is one that sells food and other general household items. Hypermarkets, supermarkets, discounters and small grocery retailers are all under the grocery retail umbrella. Between 2003 and 2008, the grocery retailing industry accounted for 45% of store-based retail values sales over the world. The figures

1. As a customer, what do you want from an online grocery store? How does consumers’ behaviour differ when shopping for groceries on-line vs. off-line? What are the implications of these differences on the operations of an on-line vs. off-line store?

Marketed as ‘America’s healthiest grocery store’ the company has successfully grown to 408 stores across the world with sales of $14 billion in 2014 (Whole Foods Market, 2015). The firm is positioned as an upmarket grocery due to the emphasis on natural, organic origins, and as a result are able to charge a premium for their products. Through efficiently running its operations and stores, Whole Foods are able to maintain healthy 4.02% profit margins (Financial Times, 2015) and operating margins well above the American grocery store industry average at 6.58% (Bloomberg, 2015). Looking at 2015’s quarter 1 figures it is clear to see that Whole Foods have had a hugely successful year with sales of $4.7 billion, up 10% from the same period last year. Furthermore, they opened 9 new stores and have signed a further 11 new leases.

     The main substitute to buying your food from a grocer is going out to eat. A 2002 Gallop poll shows that Americans eating more meals outside of the home than ever before. When examining today’s changing supermarket consumer in Progressive Grocer, Buck Jones made this observation: “To get the total picture we need to look outside the supermarket arena at how customers are using other retail outlets to satisfy the needs that we could be addressing.” The success

Internet Research. 2005, Vol. 15 Issue 3, p335-352. 18p that consists of seven focus groups from different parts of the country tried finding about the perception of consumers on the concept of online grocery. The research indicated some positive and some negative beliefs, which were remarkably congruent across groups. In the minds of consumers, while the concept has advantages of convenience, price and product range. Disadvantages, such as the loss of the recreational aspect of grocery shopping could act as mental barriers where one bad experience can result in permanent disapproval of the