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Walmart tops Amazon in share of online grocery; overall e-commerce customer base not expanding

Walmart tops Amazon in share of online grocery; overall e-commerce customer base not expanding

Walmart has overtaken Amazon in share of online grocery transactions, according to the annual Food and Beverages Consumables Study conducted by TABS Analytics. According to the study, Walmart had a 30% share of online food and beverage retail transactions in the last year, while Amazon had 27.1%. Last year Amazon had a 32.6% share compared to Walmart’s 30.4% share.

TABS surveyed 1,000 U.S. adults in early August about their food and beverage habits.

The “eye-popping” part of the study, according to TABS Founder and Executive Chairman Dr. Kurt Jetta, was the transaction growth shown by e-commerce grocery players like FreshDirect, NetGrocer, Peapod and Instacart, among others. Theses e-commerce grocers had a 16.7% share of online grocery transactions, up from 7.9% a year ago.

Overall, TABS found that online grocery transactions climbed 15% year over year, but penetration was flat, with a notable drop in regular buyers. That most likely means that the base of e-commerce customers didn’t expand.

TABS pointed out that e-commerce is complementing – not cannibalizing – brick-and-mortar grocery retailers. And grocery retailers are still reporting strong sales, which indicates that they are not having business siphoned away from online channels.

“Given the focus on online shopping as the nation navigates stay-at-home orders and quarantines during the COVID-19 crisis, we expected online grocery to see a massive upswing this year. But in reality, that was not the case,” Jetta said. “Since e-commerce grocery has not succeeded in expanding the pool of buyers at at time when demand is expected to be greatest, it has become even clearer that this channel will never have the scale necessary to be profitable with the current business model. New, creative approaches are needed to address pricing and streamline the supply chain.”