Online grocery sales continued to grow in the United States, jumping 24% month over month, per a Brick Meets Click/Mercatus report. The growth from April to May is said to have been driven by retailers that have extended their capacity to handle online orders.
An increasing number of Americans are relying on online shopping as fears of the deadly coronavirus fail to subside. Although the economy is gradually opening, online shopping — particularly grocery — remains the preferred choice.
Online Grocery Sales Jump in May
Online grocery purchase in the United States continued to soar in May. Per a Brick Meets Click/Mercatus report, grocery sales jumped 24% month over month to $6.6 billion in May. An estimated 43 million Americans placed 73.5 million online grocery orders in May, at an average of $90 per order.
Also, penetration of household grocery items increased to 33% in May, up 2% from April, and more than doubled the forecast for the period before the impact of coronavirus. Retailers that expanded their capacity to handle more online orders, by offering more time slots for delivery, hiring additional workers and reconfiguring stores drive the growth in May.
Coronavirus Driving Online Grocery Sales
Online grocery dollar sales growth totaled $1.3 billion in May, the same as in April, when sales jumped 37% from $4 billion in March. Stockpiling on fears of coronavirus spreading at a rapid rate saw online grocery sales growing in February.
Total online grocery orders in May rose 18% to 73.5 million from 62.5 million in April. Average monthly purchase frequency also escalated 10% in May to 1.7 purchases per customer from 1.6 in April.
The Brick Meets Click/Mercatus May research also showed a rebound in shopper satisfaction after a low in March. Of the total consumers polled, 56% indicated they were likely to shop at the same online grocery venue again within the next 30 days compared with 50% in April and 47% in March.
U.S. online grocery sales grew 22% in 2019 and, propelled by high demand from nationwide COVID-19 lockdowns, are expected to surge around 40% this year, according to the Coresight Research U.S. Online Grocery Survey 2020. E-commerce accounted for roughly 2.6% of U.S. food and beverage retail sales in 2019, but the projected growth in online grocery activity would raise that sales percentage to 3.5%, or nearly $38 billion.
Although businesses have slowly started opening with most states easing lockdowns and stay-at-home orders, preventive measures to keep the virus at bay are likely to see people staying at home and ordering for all household necessities including grocery online. Given this situation, it would be prudent to watch out for these five stocks that are likely to rally on a sharp rise in demand for online grocery in the near future.
Reynolds Consumer Products Inc. REYN is a consumer branded and private label products company. It produces and sells branded and store-brand products which include cooking products, waste & storage products and tableware.
The company’s expected earnings growth rate for the current year is 29.7%. The Zacks Consensus Estimate for current-year earnings has improved 8.7% over the past 60 days. Reynolds Consumer Productscarries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Grocery Outlet Holding Corp. GO offers products which include grocery, dairy and deli, produce, refrigerated and frozen, floral, beer and wine, general merchandise, and health and beauty care. It also sells fresh meat and seafood and natural, organic, specialty and healthy products.
The company’s expected earnings growth rate for the current year is 24.1%. The Zacks Consensus Estimate for current-year earnings has improved 10.1% over the past 60 days. Grocery Outletholds a Zacks Rank #2.
BG Foods, Inc. BGS, along with its subsidiaries, manufactures, sells and distributes high-quality, shelf-stable, frozen food and household products across the United States, Canada and Puerto Rico.
The company’s expected earnings growth rate for the current year is 21.3%. The Zacks Consensus Estimate for current-year earnings has improved 19.2% over the past 30 days. BG Foods sports a Zacks Rank #1.
Campbell Soup Company CPB, together with its subsidiaries, is a worldwide manufacturer and marketer of high-quality, branded convenience food products.
The company’s expected earnings growth rate for the current year is 24.8%. The Zacks Consensus Estimate for current-year earnings has improved 6.3% over the past 60 days. Campbell Soup Companycarries a Zacks Rank #2.
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