Which of the following statements is true about online grocery retailers?

• A. They are unable to compete with physical stores on price.
• B. They typically have lower overhead costs compared to traditional brick-and-mortar stores.
• C. They do not require any form of inventory management.
• D. Online grocery retailers cannot offer delivery services.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the context of online grocery retailers and their business model compared to traditional brick-and-mortar stores.
2. Step 2: Analyze the statement about price competition: consider factors like cost structures, economies of scale, and pricing strategies to determine if online retailers can compete on price.
3. Step 3: Evaluate the claim about overhead costs by identifying typical expenses for online retailers (such as warehousing and technology) versus physical stores (such as rent, utilities, and in-store staff).
4. Step 4: Consider the role of inventory management in online grocery retailing, recognizing that managing stock is essential regardless of the sales channel.
5. Step 5: Assess the feasibility of delivery services in online grocery retailing, noting that delivery is a key component of the online shopping experience.