Grocery Delivery Expands as Retailers Compete for Digital Spending

This week, Food Lion expands eCommerce, Target invests in grocery delivery, and Getir buys Gorillas.

Ahold Delhaize subsidiary Food Lion, which has more than 1,100 stores across 10 Southeastern and mid-Atlantic states, announced Monday (Dec. 12) that it is expanding its Food Lion to Go curbside pickup network, following on the heels of its delivery expansion, announced Friday (Dec. 9).

As to the former, the grocer is adding 25 more stores for pickup, and regarding the latter, the company brought delivery to two additional states. With these two expansions, the company now offers at least one of the two eCommerce fulfillment options at 86% of the locations it serves.

“With some of the busiest months ahead for our customers, we are excited to expand this convenient service to more stores in the Food Lion footprint,” Evan Harding, the grocer’s director of digital and eCommerce, said in a statement. “With the Food Lion to Go service, we provide our neighbors the option to shop through the channel they prefer, in-store or online, still ensuring they have access to the freshest groceries at affordable prices.”

The pickup expansion can be especially key to attracting online customers, considering that this fulfillment method is the most popular among shoppers.

Research from the latest edition of PYMNTS’ monthly ConnectedEconomy™ study, “ConnectedEconomy™ Monthly Report: The Gender Divide Edition,” which drew from a survey of more than 2,600 U.S. consumers in October, found that 45% of men and 36% of women buy groceries online for curbside pickup. Meanwhile, 43% and 35%, respectively, order in advance for home delivery, and 42% and 28%, respectively, use same-day delivery aggregators.

Target Expands Delivery Network

In an effort to expand its same-day delivery capabilities, Target is adding more sortation centers, facilities wherein orders that were picked in stores are organized to be sent out to consumers’ homes.

The chain’s same-day grocery and retail delivery subsidiary Shipt announced Monday in its 2022 Shipt Business Snapshot Report that Target opened six such facilities in the last year with plans to add more throughout 2023. The news comes as the retailer’s delivery business grows, with Shipt seeing an 11% increase in orders year over year.

Certainly, demand for same-day delivery is significant. Findings from the July edition of PYMNTS’ ConnectedEconomy™ series, “ConnectedEconomy™ Monthly Report: The Rise of the Smart Home,” which drew from a May survey of nearly 2,700 U.S. consumers, revealed that 33% of those surveyed had ordered products online from a same-day delivery website such as Shipt in the previous month.

Getir Closes Acquisition of Gorillas

Days after reports circulated that Turkey-based ultrafast grocer Getir would acquire German quick commerce startup Gorillas with the help of an additional $100 million investment in the latter from its backers, the sale was confirmed.

Getir officially announced the acquisition Friday.

“Markets go up and down, but consumers love our service, and convenience is here to stay,” Getir founder Nazim Salur said in a statement. “The super-fast grocery delivery industry will steadily grow for many years to come, and Getir will lead this category it created seven years ago.”

Salur’s comments reference the difficult year that ultrafast players have had, with many of the leading players retreating from markets they had only recently launched in and announcing major layoffs.

These struggles come as global inflation has many consumers reevaluating their spending, opting for lower prices over instant convenience. PYMNTS research illuminated these trends in the United States. Research from the October edition of the Consumer Inflation Sentiment study, “Consumer Inflation Sentiment: Consumers Buckle Down on Belt-Tightening,” which drew from a survey of more than 2,600 U.S. consumers in September, found that 58% of shoppers have cut back on nonessential grocery spending.