INDIANAPOLIS, Ind. – Amazon and Whole Foods announced the expansion of their home delivery service to five additional cities, including Indianapolis, Chicago and Houston on Tuesday. While the move is certainly exciting news for Prime members, experts say it could spell trouble for traditional grocery stores.
University of Indianapolis Associate Professor of Finance Matthew Will says the business of “groceries on demand” is one that will continue to grow.
“For the next generation, this is the way it’s going to go,” Will said.
Will says the trend of grocery delivery has become fueled by millennials. He adds that with millennials moving into the proverbial “driver’s seat” as the country’s consumers, it’s only a matter of time before the trend moves from niche to the norm.
“Millennials want everything different, they want it on a phone as an app, they don’t drive as much, they’re using ride-sharing more. For them this is just a natural phenomenon, for people that are older like me we’re probably a bit more hesitant to take the food delivery. We want to touch and feel the melon, we don’t want people picking it out for us,” he said.
While the timeline of when traditional grocery stores will start to feel the sting of delivery services is unclear, Will says stores will need to quickly adapt to ensure their survival.
“The grocery store business is more susceptible to change than other industries. You must adapt, you must change your business model completely, or you’re gone,” he said.
Residents in communities underserved by grocery stores say they believe delivery options could prove to be a benefit for those who live in food deserts or have trouble making it to the store.