“Foodstuffs will be rolling out more online grocery stores, the first to be at a New World in a rural location in the greater Wellington region…

An industry expert has questioned the “hype” around online grocery shopping, saying it’s a difficult and expensive channel and only a small part of the grocery market. “A single Pak’nSave would count for more than the total of online sales of groceries in New Zealand.”

Tim Morris, Director Coriolis research, says Countdown’s owners Woolworths had inherited an online store – Countdown’s parent Progressive Enterprises set up an online site in 1995 – and he doubted they’d have gone down the online route if this had not been the case.

“Online groceries is a difficult place to make money – no one has cracked online grocery shopping perfectly.”  Because of problems of logistics and day-to-day management, it’s a cost adding exercise, Morris said.

“The Foodstuff store owners are not idiots. If there was a dollar in there, they’d be into it. “You are not going to be cheaper doing it,” he said. Some customers will pay for the convenience of online. “It’s trading time for money.  “The big online challenge for New Zealand is getting scale.”

Read the whole article here at Retail News.