Market Report: e-Grocery Infrastructure 2021

Executive Summary

The pandemic accelerated e grocery growth; lack of previous investments has led to a disparate & nascent vendor landscape

The grocery sector

  • Consumers have been able to buy groceries online since the late 1990’s, but traction remained muted compared to general e commerce
  • This lack of traction stemmed mainly from the structural heritage in the grocery sector, where the core focus was on stores/property portfolios, partnerships with fmcg/cpg and improving efficiencies in the supply chain
  • Adding to the structural inflexibility was low margin goods, three temperature zones, expiry dates, fragile goods, and large baskets (30 60 items)
  • As evidence of the inherent structural challenges in the grocery sector, many pureplay e grocers have partnered with legacy grocers to gain access to a supply chain
  • Amazon appeared to have acknowledged this with their $13.7bn acquisition of whole foods in 2017

Pandemic for grocers

  • Whilst the pandemic poured rocket fuel on online sales, very few legacy grocers actually surpassed 10% online as a share of revenue (only tesco reached above 10% online in fy2020 according to stiqs research)
  • Many online pureplay grocers experienced huge growth that, for a few, also exposed supply chain limitations, including access to more delivery vans, employees, etc.
  • In north america, instacart turned into an overnight sensation and possibly the top e grocer globally
  • Funding inflows increased with larger rounds mainly targeting new e grocery models, such as q commerce

Pandemic for vendors

  • In 1h20 most grocers froze, delayed or indefinitely postponed non critical projects; although many projects resumed in 2h20, there was a lack of new projects
  • In 1h21 e grocery infrastructure experienced increased m&a activity among software platforms, and acquisitions included locai , freshop and shophero
  • Whilst e grocery experienced huge growth, ecommerce also rocketed and mhe vendors serving both sectors reported healthy 2021 order books in h1, mainly from e commerce customers; one likely consequence was expanding lead times across the mhe sector
  • Interviews suggested that inquiries had increased and more vendors had decided to join the sector

E grocery infrastructure innovation

  • A major side effect of grocer’s lack of investments in e-grocery has been a highly sporadic technology vendor landscape with a majority of vendors also serving non-food retail (among other industry verticals) and there were very few vendors with proven end to end solutions
  • Whilst e grocery infrastructure startup activity increased in 2015 & 2016, prior to this, most r&d activity was mainly driven by grocer’s internal teams
  • Takeoff technologies first mfc went live in 2018/2019 and fuelled an intense, yet to be resolved, debate of where to fulfil e grocery orders centrally or locally

“potential” a key driver

  • Legacy grocers remained the target for larger investments and especially for mfc vendors that often cited large store estates as potential for growth
  • Pureplay e grocers were increasingly active buyers of e-grocery infrastructure

Barriers to growth

  • Interviews suggested a key barrier to further growth was legacy grocer’s roi expectations
  • However, the complexity of grocery retail was also often quoted; adding complex automation equipment to brick & mortar stores brings additional challenges; branding was also an important topic for many grocers, often preventing network effects

The future?

  • At the time of writing this report there was increasing interest in ‘amazon go’ technology… Potentially to focus on in store inventory accuracy, a well known problem
  • And, whilst many grocers were struggling with multi channel retail, axfood and alibaba freshippo were deploying omni channel capabilities


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  • Alert Innovation (Founder)
  • Asis Automation (Representative)
  • Atrato Capital (Finance)
  • Attabotics (CRO)
  • AutoStore CPO
  • Blue Yonder (VP Retail Industry Strategy EMEA)
  • BotsAndUs (CEO)
  • Brain Corp (VP of Product & Marketing)
  • Caja Robotics (Chairman & CEO)
  • Cleveron (Chief of Sales & Marketing)
  • Colib (CEO & Co-founder)
  • Conveyco (System Integrator)
  • Daifuku/Wynright (VP Design Engineering)
  • Emporix (CEO & Founder)
  • Fizyr (CEO)
  • FoodX (VP Business Development)
  • Gophr (Courier)
  • Gradient Robotics (Distributor)
  • Grenzebach (EVP Mobile Robots)
  • GrocerKey (CEO & Co-founder)
  • Harmonize Mobility (ISO Consultant)
  • Homevalet (CEO)
  • Invata (System Integrator)
  • ITAB (Business Manager Click & Collect)
  • Jakob Beer (Expert)
  • Knapp (Sales Director)
  • Local Express
  • Locktin (Founder)
  • Lozier (VP Corporate Development)
  • Marie-Axelle Loustalot-Forest (Expert)
  • Mathem (Grocer)
  • Mercatus (VP Marketing)
  • Migros Ticaret (Grocer)
  • Modula (Business Development Director)
  • Myrmex (Chairman)
  • Nimble (CEO & Founder)
  • Ocado Solutions (Head of Communications)
  • Ottonomy (CEO)
  • Phononic (Refrigeration Tech)
  • Pulse Integration (System Integrator)
  • Retail Robotics (CMO)
  • Righthand Robotics (CSO & Co-founder)
  • SAP (Retail Business Unit)
  • Savoye (Product & Marketing Manager)
  • SSI Schaefer (VP)
  • (CEO)
  • StrongPoint Group (CEO)
  • Swisslog (Head of Solutions Management)
  • System Logistics (Head of Sales)
  • Takeoff Technologies (CEO & Chairman)
  • Teraki (CRO)
  • TGW (Industry Manager Grocery)
  • Tompkins Robotics (President)
  • TUKU Singapore (General Manager)
  • UPC (Data Expert)
  • Urbx (CEO)

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