Retail

Fewer people are working from home, killing a major source of business for Instacart and other grocery delivery services

A man wearing a face mask and sunglasses backwards on his head looks at a receipt while standing in front of a shopping cart at a Giant grocery store in Washington DC in 2020.
Grocery delivery companies like Instacart are increasingly catering to upper-income workers who can do their jobs from home, a survey from Morning Consult shows. Evelyn Hockstein/For The Washington Post via Getty Images
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If you work from home, you're more likely to order groceries online than someone who's commuting to and from work.

That's one of the findings from a recent Morning Consult survey. About 37% of remote workers and 32% of hybrid workers said they did all of their grocery shopping online, Morning Consult reported. But just 19% of employees who reported to an office for the whole week said the same, according to the survey.

Forty percent of in-person workers said that they did "some" of their grocery shopping online. The survey, which was conducted between January and March, surveyed 364 working adults in the US. It asked consumers about their online grocery usage, including both delivery and pick-up orders.

The decline in remote work points to a potential challenge for online grocery services: Before the pandemic, many pitched themselves as time-savers for people who were too busy with work or other obligations to go shopping for food. 

Instacart, for example, said in 2017 that it "enables customers to spend their time on things that really matter to them by giving back the time they would have spent grocery shopping each week."

But Morning Consult's survey suggests that customers with a commute to and from work are less likely than their work-from-home peers to order groceries online, said Emily Moquin, food and beverage analyst at Morning Consult.  

At first glance, it might seem that remote workers have more flexibility to make a weekday errand run like grocery shopping, Moquin said. But many employees still working from home "are doing so because they have other priorities," she said.

Remote workers tend to be high earners and have children, both characteristics that make them more likely to buy food online instead of going into a supermarket.

Then, there's being around when the order arrives, or it's ready to pick up. Customers still need to be home to put milk and produce in the fridge, and working from home makes that easier, Moquin added.

"You're thinking about your schedule for the week, and you're like 'Okay, Wednesday's my at-home day, so I'll make sure I do my shopping on Tuesday, so I'm there for Wednesday delivery,'" Moquin said.

Online grocery services prospered during the early months of the pandemic as many consumers spent more time working and hanging out at home. Online transactions grew to 11% of grocery sales, up from just a few percentage points several years earlier.

Many of the companies hoped that the habit of buying groceries online would stick around even as people returned to in-person work, school, and other activities.

But the growth of online grocery purchases has slowed. Startups promising grocery delivery in 30 minutes or less have closed up shop or scaled back. Instacart, meanwhile, has put off its planned IPO and laid off staff.

Part of the explanation is consumers returning to their pre-pandemic routines. Many employees with office jobs have been called back to their physical desks for all or part of the work week, meaning less time spent at home. 

Consumers are also dealing with rising food prices. That has made it harder to justify spending even more on delivery fees, tips for drivers, and the other costs typically associated with ordering groceries online.

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Alex Bitter
Alex Bitter is a senior retail reporter covering the gig economy, food, and retail. His work focuses major gig delivery and ride-hailing apps, including Uber, Lyft, DoorDash, Instacart, and Walmart's Spark. He is interested in everything from what it's like to work on the apps to the companies' business strategies.Some of his recent stories feature gig workers who have been deactivated on the apps, DoorDash hiring traditional employees to make deliveries, gig workers' use of bots, and gig work expanding into new professions, such as nursing.Alex has also written about Aldi's US expansionStarbucks' turnaround efforts, and the fallout from Kraft-Heinz's budget cutting. Convenience store chain Sheetz ended its "smile policy" after his reporting.Before joining Insider in September 2020, he wrote about consumer and retail companies for S&P Global Market Intelligence. He's a graduate of the University of Hawai'i at Mānoa and grew up on the Big Island.Alex lives in the Washington, DC, area, where you can find him studying ancient coins or searching for Civil War artifacts with his metal detector in his free time.Got a tip? Reach out at abitter@bjinnox.com or via encrypted messaging app Signal at +1 (808) 854-4501.