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Who profits from online groceries?

22032019_groceries

Who profits from online groceries?

As many millennials are now reaching the age at which they start to take over the grocery shopping responsibilities, it is not surprising to observe significant growth in demand for online shopping. On the one hand, this is nothing new: we have seen the ongoing shift to online shopping across many lines of retail. On the other hand, few (if any) have successfully cracked the code for delivering groceries to the homes of online customers while also generating a profit.

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Andrew Macken is the Chief Investment Officer of the Montaka funds and the Montgomery Global funds. He established MGIM in 2015 in partnership with Montgomery.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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5 Comments

  1. Forget robotics and the like, give us back our local farmers markets just like in many parts of Europe and Asia. There are afew generations in Oz who dont know what a real tomato tastes like, what an ungassed banana tastes like et al. Csiro and industry have given us quantity but quality is woeful. Going online will be the end. Just send us pills.

  2. Also, won’t these suppliers charge the customer more for delivery and pocket a small portion of the extra fee?

    The other interesting thing is what will be the implications for packaging, potentially products going though this new distribution route will be packaged differently so that respond better to this new route. Perhaps excess packaging will be trimmed and the products will be modular so that they can be easily moved. A better model might be for the grocer to offer a drive in pickup point like a bottle shop.

  3. A thoughtful piece Andrew but there are some holes that need more research. Coles, for example, can and does price things higher on their website shopping cart compared to their supermarkets. Also they have delivery charges. Can’t speak for the other stores though.

  4. andrew.hindmarsh.520
    :

    Probably why Aldi doesn’t deliver, no money in it . Costco will deliver if you spend 1000 and live in certain areas

  5. In relation to the pickers, robotics should be able to take over than function at the point of distribution – all that is needed is a driver but that can also be automated. Indeed, these facilities should significantly cut costs for retailers because it takes out all the costs associated with having a shop. Of course transition to this digital future will cost these retailers but it is a good investment because they will pretty much have a monopolies over distribution.

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