Tuesday, November 5, 2013

Online grocery sales pose no threat to supermarkets, says Moody's

Moody's Investors Service said last week that it doesn't think online grocers pose a significant threat to brick-and-mortar stores, pointing out that the online grocery business accounted for only 0.5% of the overall grocery spend last year.

The company believes online sales are not likely to grow to more than 1% to 1.5% of grocery sales over the next five years.

"Online grocery shoppers skew toward households with annual income of $100,000 or more, " said Moody's. "For most people, home delivery of fresh food is too expensive."

Moody's added that "the logistical challenges associated with delivering perishables and fresh food at a reasonable profit and at a cost that is attractive to price-sensitive and skittish consumers is a major barrier for both aspiring entrants and existing food retailers."

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