Is Online Grocery Shopping Growing Faster Than In-Store Visits?
Slower growth in overall grocery spending is anticipated during the next five years, but the online segment is projected to increase at a compound annual growth rate (CAGR) of 8.9% – more than five times faster than the 1.7% rate expected for the in-store segment, according to a new Brick Meets Click report.
The analytics and strategic insight firm's "U.S. Grocery Sales 5-Year Forecast: 2024-29" report found that the online segment, which includes pickup, delivery and ship-to-home, will account for 17% of all grocery sales in the United States by the end of 2029.
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In 2024, annual e-grocery sales finished up just above 9% versus 2023, driven by promotion-fueled year-over-year (YOY) growth in the high teens during the second half of the year, offsetting the absence of growth during the first six months. Brick Meets Click data revealed that the surge in e-grocery sales has continued into this year, and as a result, the online segment is expected to post similar relative gains for 2025, with delivery continuing to drive most of the YOY growth.
With online sales expected to grow 5.2 times faster than in-store sales, e-grocery will account for nearly half of the grocery market’s total absolute dollar growth over the next five years with in-store driving the rest. That said, e-grocery is forecasted to contribute nearly 40% of the gains in 2025 and more than 50% of the gains in 2029.
“As firms, especially grocers, review our new five-year forecast, it’s important to keep in mind that mass and Walmart, excluding Sam’s Club, now account for nearly 50% and 40% of today’s e-grocery sales, respectively, and that the top-line view includes ship-to-home, a service that most grocers don’t offer,” said David Bishop, partner at Barrington, Ill.-based Brick Meets Click. “Given these factors, we encourage firms to leverage this national forecast as a guide for examining their regional trade areas in terms of competitive set, household demographics and growth opportunities.”
Some grocers have already taken action. For example, Texas-based regional chain Brookshire Brothers has partnered with eGrowcery to adopt the e-commerce software company’s white-label solution to streamline the retailer’s grocery pickup and delivery operations.
E-commerce in general is a strategy that’s paying off for retailers, as seen in recent financial reports. Walmart U.S.’s comp sales gains in Q1 reflect strong e-commerce growth. The division achieved e-commerce profitability in Q1 for the first time, growing 21%. Delivery speed continued to help drive business, with same-day delivery expansion on track to reach 95% of U.S. households by the end of FY 2026.
Further, while Target Q1 sales fell short of expectations, one highlight of the quarter was that digital comps grew 4.7%, reflecting more than 35% growth in same-day delivery powered by Target Circle 360 and continued growth in Drive Up. To capitalize on this momentum, Target teamed with Shipt last month on a groundbreaking new service that provides delivery from more than 100 beloved retailers beyond Target, with no same-day delivery price markups that would get passed on to customers. While same-day delivery from Target has always been free of price markups, this latest offering aims to make this service from many more locations even easier and more affordable.
Meanwhile, Brick Meets Click was also quick to point out political uncertainty that may also affect e-sales, including a more restrictive immigration policy, changes in trade policy and pending legislation linked to supplemental nutrition assistance programs (SNAP) at the federal and state levels.
“Grocery retail has always been a dynamic business, but the rate of change over the last five-plus years has disrupted shopping patterns, especially for delivery and value formats like Walmart, and that disruption is not disappearing anytime soon,” said Bishop. “Before the pandemic, e-grocery’s draw was largely about saving time; during the pandemic, it was about protecting your health; and today, it’s often more about saving money and time.”
Brick Meets Click's forecast report is an annual initiative that projects how grocery sales are expected to change overall, as well as across in-store and online, offering a deep dive into each service method. The forecast is based on a proprietary model that leverages Brick Meets Click research and insights, along with secondary sources from various government agencies.
