Grocery shopping has become more convenient than ever.
The rapid growth of delivery services for everything from a latte to a bag of groceries has been one of the dominant pandemic disruption stories, but curbside pickup may have a longer lasting effect on the grocery industry.
In the US, grocery pickup sales grew to $4 billion in January 2022, up from $3.9 billion the year before, whereas first and third-party delivery fell from $3.2 to $3 billion, according (pdf) to a survey from Brick Meets Click, a grocery research firm and Mercatus, an online grocery software company. In January, online grocery sales in the US reached $8.5 billion and accounted for nearly 12% of the country’s total grocery spend.
It’s not just grocery items that shoppers are interested in picking up. On Feb. 23, Target announced that customers will soon be able to pick up a Starbucks coffee from the store’s parking lot, highlighting how normal it has become to run errands, and even caffeinate, without leaving the car.
Why curbside pickup beats delivery
Curbside is more widespread than delivery. The latter is better suited for large, dense metro areas, than for many rural or suburban areas where customers are more spread out, and where driving and parking are far more convenient than in a city setting. Grocery curbside pickup is also cheaper for both retailers and shoppers, since both can avoid dealing with the extra costs of delivery. For a business like Starbucks, curbside offers another way to get orders to customers without added infrastructure like a drive through window. And, curbside pickup gives shoppers more control: It’s not ideal for groceries to be sitting outside at home for an extended period of time and finding the right delivery window can be a hassle.
Grocery pickup is likely to remain more popular than delivery as the pandemic subsides, according to analysts. Curbside has quickly become a necessary convenience for people with limited mobility or immune system concerns, like elderly and disabled folks, and for those with tight schedules, like parents, who can make a quick grocery stop after picking up kids from school, said Marshal Cohen, chief retail advisor at NPD, a consumer market research firm.
A similar situation is playing out in the restaurant industry. Out of all off-premise orders, drive-thru (52%) and carry-out (37%) were more popular than delivery (11%) in the year ending in December 2021, according to data from NPD.