A look at the challenges of online grocery shopping in US, where 22% of apparel sales and 30% of electronics sales happen online versus just 3% of grocery sales
Alana Semuels / The Atlantic : Tweets: @alexhern Tweets: Alex Hern / @alexhern : My own theory about why US online grocery shopping sucks is that US *offline* grocery shopping sucks in ways that have to be fixed before consumer behaviour can take to the internet http://www.theatlantic.com/...
Context & Ripple Effects
When Alana Semuels profiled the gap in The Atlantic's look at online grocery back in 2019, the numbers were stark: 22% of apparel and 30% of electronics sold online versus just 3% of groceries, with Alex Hern arguing the real blocker was that US *offline* grocery was bad enough to make shoppers default to habit rather than comparison-shop on the internet.
Four years on, the arc barely moved: Numerator put Amazon at just 3% of US grocery share including Whole Foods, UBS counted physical stores at ~90% of sales in 2022, and overall e-commerce's share of US retail had fallen back toward pre-pandemic levels by spring 2022 — making grocery the category where the digital shift most stubbornly failed to stick.
First-order effects
- Grocers and Amazon compete for a channel that is structurally tiny: with ~90% of US grocery spending still happening in stores, any online-grocery investment fights over a 3%-ish slice rather than an apparel-style migration curve.
Second-order effects
- Delivery economics stay broken at the margin — Semuels' own stint as an Amazon Flex driver showed per-drop pay falling below minimum wage after expenses, meaning the last-mile cost that makes online grocery unprofitable is baked into gig labor.
Third-order effects
- If Hern's thesis holds — that weak offline grocery formats suppress online adoption — then US grocery digitization stalls until store quality itself improves, unlike UK apparel where shoppers have already shifted back to physical stores post-pandemic.
The trend: Grocery is proving the durable exception to retail's e-commerce shift, holding near 90% in-store sales even after the pandemic briefly pulled the whole retail mix online.