RESTON, Va. -- Sales of food and groceries on the Internet outpaced all other categories between Thanksgiving and Christmas -- rising 950% between Oct. 31 and Dec. 26, compared with an overall on-line spending increase of 148% -- according to a survey of 3,000 home-based on-line users.
In contrast to food, the survey noted that purchases of toys rose 483% during the two-month period; purchases of flowers and cards rose 348%, and purchases of videos and DVDs was up 308%.
In dollars terms, food and grocery sales increased from $19 per person per week in late October to $42 in late November and $138 in mid-December, before dropping back to $71 at the end of December -- in line with the ebb and flow of all categories as Christmas got nearer and then was over, the study indicated.
It also showed that, while most people bought products for themselves early on, the percentage of gift purchases of food increased as Christmas approached.
The study was conducted by PC Data Online here in cooperation with Goldman Sachs, New York-based financial investment firm.
In an interview with SN, Cameron Meierhoefer, an internet analyst for PC Data, said the large percentage increase in food is largely a reflection of the low base from which the category started.
But the results were still significant, he said, "because we saw people examining the Web for the first time as an option for purchasing food or simply as a tool to price items or do comparison shopping as well as sometimes buying.
"As a result it's clear the Internet attracted a whole new shopper in 1999 who was looking to see what's available and how it's priced. What they discovered is that buying groceries on-line is an easy way to shop and may be something they want to make a part of their lives."
According to Meierhoefer, activity at grocery Web sites was primarily "a regional phenomenon" limited to a handful of cities, primarily Boston, "but it's now coming into New York and San Francisco and just beginning in the Washington market. It's likely to be reflected in broader market locations over time," he said.
However, on-line grocery shopping will always be a limited activity, he said. "While the Internet will certainly become a tool in the consumers' arsenal as it establishes itself as a viable alternative to supermarkets, I believe people will still depend on stores," Meierhoefer indicated. "Consumers will divide their shopping dollars between stores and the Internet, but on-line shopping will not run companies out of business -- it will simply make it easier and more convenient for people to do their grocery shopping."
He said it's still to early to pinpoint how much business Internet shopping will take from brick-and-mortar stores, "but it will probably be on the low end of the spectrum. We're not even sure at this point what percentage of buying will be done on-line for more established items."
