Grocery Chains Potentially Investing Billions On A Losing Strategy
While grocery giants such as Kroger and Whole Foods are hopping on the online grocery bandwagon, some analysts suggest these retailers may be wasting their money.
While shopping online might seem convenient, shoppers seem to prefer putting their food into actual baskets rather than online shopping carts. A report by BMO Capital revealed that 16% of New Yorkers and only 4% of LA residents purchased groceries online in 2014.
Despite the warning, retailers are still investing in the online grocery market. Kroger invested $2.7B in nutrition company Vitacost.com to help profit online sales while Whole Foods partnered with delivery startup Instacart for five years this February.
Even popular e-commerce companies like Amazon and Google have started selling their produce online only to find financial letdowns. Sometimes we just prefer to touch the avocado rather than click it to see if its ripe. [BI]
