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eMarketer: Online Grocery Sales to Increase 3360% by Year 2002

Online grocery sales will climb to $33.6 billion by the year 2002, an increase of 3360% versus 1998, according to figures released by eMarketer in New York City.

eMarketer, an authority on business online, also projects that the number of online shopping households will grow to 6.9 million by year end 2002, a 77 fold increase from the 90,000 households recorded in 1998.

"We've concluded that by the year 2002, although ranking in the top five Hot Growth eCommerce Categories, the grocery segment of e-commerce will not be nearly the size projected by the majority of firms which evaluate future business on the net," said Geoff Ramsey, eMarketer's Statsmaster.

eMarketer said its study shows that online groceries will achieve a penetration rate of between 15% - 20% of U.S. households by the year 2007 and account for 2% of the U.S. total grocery sales by the year 2000.

This week's eMarketer Web site takes an in-depth look at the rapidly emerging grocery segment of online business, discussing and evaluating 11 companies on the national, regional, local and chain level.

Online grocery shopping is a gateway application for new Internet users, eMarketer said. The convenience and simplicity of buying groceries online is becoming an effective lure for new users. Often a family member in a wired household, who has never surfed before, will be enticed onto the net by grocery shopping. Who ever thought the "killer app" would be a carrot?

Still, said Jonathan Jackson, an eMarketer analyst, "all indicators suggest the long-term prospects for the industry are very positive, but we believe ramp-up will be slow due to a number of factors:"

  • Entrenched consumer shopping patterns
  • The need for tactile interaction with food items
  • The logistical problems associated with starting an online grocery.

eMarketer is a resource for information on what's happening with business online.