Ocado Sees Consumers’ Embrace of Online Grocery Return

Ocado CEO Tim Steiner said his company is benefitting from a resumption in online grocery buying.

Consumers have gone back to eGrocery following a post-pandemic rise in brick-and-mortar buying, Steiner told Bloomberg Tuesday (July 16) after the grocery technology company reported earnings showing it nearly halved its losses.

“This whole idea that customers deserted online — there may be some of that that’s true at the other grocers, but it’s not what we saw,” Steiner said. “It’s just that customers went back to their previous habits.”

PYMNTS Intelligence found that many consumers engage digitally with their grocers, The 2024 edition of PYMNTS Intelligence’s “How the World Does Digital” report, which relied on data from a survey of more than 67,000 consumers in 11 countries, showed that 40% of consumers engage in online grocery shopping at least once per a month. In addition, 20% do so weekly.

Additional research showed that consumers who engage digitally with grocers spend more than those who do not. For example, PYMNTS Intelligence’s study “Tracking the Digital Payments Takeover: Catching the Coming eCommerce Wave” found that shoppers spend $88 on their average in-store grocery purchase, while eGrocery customers spend an average of $116 on each purchase.

Additionally, the “Can New Use Cases Drive Consumer Use of Digital Wallets?” edition of the same series of reports showed that grocery shoppers who pay digitally, whether online or in-store, typically spend more. Consumers who use digital wallets to buy groceries spent an average of $96 on their most recent purchases, compared to $92 for those using other payment methods.

Ocado’s shares fell earlier in the week after an analyst said the company should “seriously consider its options” as it faces project delays and liquidity challenges, Bloomberg reported.

While Ocado envisions a future where it provides automated warehouses for supermarkets worldwide, the report said, key customers including Kroger and Canada’s Sobeys are slowing their warehouse launches, thus throwing a wrench into Ocado’s plans.

Speaking during an earnings call in February, Steiner said the reliability of eGrocers remains a challenge.

“We are over 99% items delivered as promised, 95% on-time delivery, and a great doorstep experience,” he said. “Getting the basics right in online grocery is the most critical thing. And it’s amazing — I’ve been in this industry now for 24 years — how few players there are in the world that can actually deliver what they promise to a customer on their doorstep on time.”

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