Pandemic buying has workers at Roundy’s busy keeping grocery stores stocked to meet customers demand. Milwaukee Journal Sentinel
Area grocers have a message for anyone using their online pickup or delivery services: Be patient.
Driven by the coronavirus pandemic, online grocery shopping has exploded as people seek to buy food while avoiding human contact.
What was once a convenience for busy families is now seen as a necessity by anyone concerned about contracting COVID-19, which is proving to be highly contagious and sometimes deadly, especially for older people or those with underlying medical conditions.
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Grocers have been scrambling to meet demand, with many saying their online programs are at capacity.
Slow, then supersonic
The online portion of the retail food business was supposed to see steady growth during the coming years until it eventually became a widely-accepted — and perhaps dominant — way to buy groceries.
“Most prognostications had that happening seven to 10 years from now,” said Rick Shea, president of Shea Food Consultants, a Minneapolis, Minnesota, grocery and consumer packaged goods consulting firm.
Instead, it happened over the course of about 72 hours in mid-March.
Talk about a shock to the system.
“Online ordering has just skyrocketed,” said Ted Balistreri, one of the family co-owners of the Sendik’s Food Markets grocery stores in metro Milwaukee.
Sendik’s has hired more than 100 people since mid-March — nearly 60 of them for the online grocery side of the business — since the pandemic first took hold in Wisconsin and the U.S.
“We are increasing our capacity to get these orders out just as soon as we possibly can,” Balistreri said. “The system wasn’t built for a 10- to 15-times (normal) increase in volume overnight.”
Crews at the stores have rallied to meet demand, not only online but across the business.
“Our team has been phenomenal,” Balistreri said. “They take their role in the nation’s food supply so seriously. They want every customer to get the products that they need.”
Sendik’s is an independent operator of 13 grocery stores and four smaller format Fresh2Go markets in Milwaukee and its suburbs.
The same thing is happening with larger-scale grocers.
“Over the last three weeks, online orders have increased approximately 350 percent,” said Jim Hyland, a vice president for communications at the Milwaukee-based Roundy’s division of Kroger. “Our (employees) are picking orders from 2 a.m. to 7 p.m. (each day) in order to keep up with the demand.”
Roundy’s operates 106 Pick ’n Save and Metro Market stores in Wisconsin and is the grocery market share leader in the state. All but a handful of its stores offer pickup and delivery options.
Crews across the company are working overtime to meet demand.
Other online retailers have also seen huge spikes in demand. Amazon said this week it has hired more than 80,000 employees to meet the surge in demand from people buying items online and having them delivered.
The digital company, now one of the world’s largest retailers, said 700 of those new employees are in Wisconsin.
Process takes time
The explosion in online business means that an order that prior to the pandemic was usually processed in a matter of hours now can take days.
“Scheduling has been tough,” Shea said. “You have to wait a day or two just to get a pickup time or a delivery time.”
So, if you’re a consumer, try to order for what you will need two to four days out and anticipate what groceries you will need at that time.
The fierce demand is proving to be a great testing and proving ground for the services.
“This is the biggest trial vehicle that pickup and delivery services could ever have,” Shea said. “The retailers are gearing up to make their pickup and delivery systems as efficient as possible and this is giving them the volume to do it.”
Grocers have been aggressively hiring to meet the demand.
“We are currently at capacity with our pickup business,” Hyland said. “We have been hiring additional help to optimize order flow and shorten the window for pickup and better serve our customers.”
The online order and pickup model allows consumers to purchase and pay for their groceries online and then have them loaded into their car by a store employee.
What happens when pandemic ends?
As the popularity of the services continue to grow during the pandemic, the question is what happens when the outbreak peaks and restrictions are eased.
“My sense is once we come off lockdown, there will still be a high penetration of pickup and delivery services,” Shea said. “People like the convenience.
“I think it is definitely going to be a new normal where pickup and delivery is going to be a much larger percentage of the overall food dollar,” he added.
The digital portion of the business likely will have staying power, Balistreri said.
“I think as we get to open the economy back up, there is still going to be a segment of the population that is going to want to have that sense of security of either having groceries delivered or available for curbside pickup,” Balistreri said.
Still, the online portion of the business will never replace the trip to the grocery store.
“Online will grow, but it’s still going to be a small portion of our sales,” Balistreri said.
“The way we look at it is it’s a tremendous service to our customers,” he added.
Roundy’s expects continued growth in its digital business and its parent company, Kroger, is actually testing a pickup-only store model.
The next flu season
Once things return to normal, the memories of this pandemic will be fresh in the minds of those who are at risk.
“Even if all the restrictions are lifted, you know that come next flu season in November December and January, that people are going to practice social distancing and they are going to do more pickup and delivery,” Shea said.
There are also costs involved in assembling the online orders. Where traditionally consumers do the picking, move the merchandise through the checkout, pay and then load their cars, retailers will need staff to do those things.
“In the short term, retailers have been kind of eating a portion of that cost because they want the traffic,” Shea said. “They recognize that pickup and delivery could be the future and it’s important to have it as a service.”
Retailers will have to figure out a way to handle those costs.
There are various fees and charges for the services, especially delivery.
Some have flat fees for unlimited pickup and delivery (Amazon Prime service is an example) while others have a fee for each order.
It’s best to check with your store and ask what the charges are.
A check of grocers in Wisconsin shows prices online are almost always the same as prices in the store.
Among retailers, Pick ’n Save is not charging for pickup service right now, Hyland said.
Where the online grocery trend actually ends up is anyone’s guess.
“Companies are investing in the pickup and delivery side of it but it’s far from settled as to what’s actually going to happen,” Shea said.
The pandemic has moved online grocery shopping to the top of the industry’s list.
“It’s a hot topic,” Shea said.
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