Trendspotting: It could be a prosperous five years for eGrocery sales
Trendspotting: It could be a prosperous five years for eGrocery sales
It’s not front page news that food shopping is more expensive than it has been in a while — and prices show no signs of decreasing anytime soon. With that in mind, Brick Meets Click expects growth in grocery spending to slow over the next five years.
Online sales, however, are expected to outpace in-store spending by about 5 percent. According to the Brick Meets Click U.S. Grocery Sales 5-Year Forecast: 2025-29 report, the online segment (pickup, delivery and ship-to-home) should account for 17 percent of all grocery sales by the end of 2029.
In 2024, annual eGrocery sales finished up just above 9 percent versus 2023, driven by promotion-fueled year-over-year growth in the high teens during the second half of the year, offsetting the absence of growth during the first six months. The surge in eGrocery 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, eGrocery 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, eGrocery is forecasted to contribute nearly 40 percent of the gains in 2025 and more than 50 percent 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 percent and 40 percent of today’s eGrocery sales, respectively, and that the topline view includes ship-to-home, a service that most grocers don’t offer,” said David Bishop, partner at 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.”
The adoption of a more restrictive immigration policy by the current administration is one factor contributing to the forecasted slowdown in sales growth. Changes in trade policy, i.e. tariffs, can trigger rapid and significant shifts in buying behaviors due to higher prices. While political uncertainty makes it very difficult to predict how tariffs will impact the grocery market, the forecast calls for grocery-related inflation to run between 2.7 percent and 1.2 percent through 2029.
Pending legislation linked to supplemental nutrition assistance programs at the federal and state levels could impact growth rates for grocery sales both in-store and online. The proposed changes threaten to reduce payments overall, make it harder for people to qualify for assistance, and/or restrict the types of products eligible under the programs. Approximately 22 million, or 17 percent, of all households receive SNAP benefits as of January 2025, so reductions will likely trigger further changes in what, where, and how much is purchased.
“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, eGrocery’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.”
