Making home shopping work - study on attitudes towards grocery shopping

American Demographics, July, 1997 by Tim Cavanaugh

When it comes to grocery shopping, most people say theyd rather be doing something else--anything else. Two-thirds of adults actively dislike shopping for food, finds a new study by two professors in the Food Marketing Department of Philadelphias St. Josephs University. Most say the most pleasant part of the experience is the trip to and from the store.

Responses like these suggest theres a ready market for home shopping, which allows consumers to buy groceries over the phone, by fax, or from their computers. But home grocery shopping has been anything but successful.

Its common knowledge in the trade that nobody is making money at it, says Robert Linneman, one of the study authors. Sales are relatively low--less than 1 percent of the total--and most operators say they are losing money on home-shopping services.

Linneman and his co-author, Patrick Kirschling, believe the problem is promotion, not unwillingness on the part of consumers. Thirty-six percent of grocery shoppers are even willing to pay a fee for the convenience of home shopping, especially those aged 18 to 50.

But supermarket chains are reluctant providers. Many dont want to spend money promoting a service that isnt immediately profitable. Its so labor-intensive, says Joanne Gage, vice president of consumer services for Golub Corporation of Schenectady, New York, which owns the Price Chopper supermarket chain. Its difficult to crunch the numbers and make it effective so you are not spending more on labor than you are getting in sales.

Maine-based Hannaford Brothers Company may have the answer. The owner of the Shop n Save supermarket chain uses a central ordering system and warehouse to fill home-shopping orders. Most grocers pull orders off store shelves, which is labor-intensive. Central fulfillment, if fully automated, could cut the cost of providing home-shopping services by half, the St. Johns researchers say.

For more information, contact Robert Linneman or Patrick Kirschling at (610) 660-1611.