Online sales of groceries more than tripled between 2013 and 2018, according to market research firm Packaged Facts in the brand new report Online Grocery Shopping in the U.S., 2nd Edition. With a whirlwind of momentum behind it, the industry will continue to grow in coming years.
Between 2018 and 2023, Packaged Facts forecasts online grocery sales will more than quadruple as online options become more available and consumers become more open to trying online shopping or using online options more frequently to purchase their groceries.
Packaged Facts anticipates Walmart’s dominance as a grocer, nationwide presence, and large number of rural stores give it a competitive advantage in expanding online grocery shopping to much of the U.S. population.
Amazon and Walmart are currently the key participants in the market, together accounting for nearly 28% of online grocery sales. Instacart, Kroger, FreshDirect, and Peapod represent other large providers in the online grocery market, with Instacart being the largest third-party pack-and-deliver company. Looking ahead, Packaged Facts anticipates Walmart’s dominance as a grocer, nationwide presence, and large number of rural stores give it a competitive advantage in expanding online grocery shopping to much of the U.S. population.
Most of the market’s growth has occurred since 2016 as e-commerce platforms and conventional grocery stores increased both their participation and their geographic footprint with expanded service areas. For instance, in August 2017, ALDI began a partnership with Instacart in three cities to allow online orders and delivery, and by September 2018 the company announced the partnership would expand to all of its stores in the U.S.
“Three key factors have created a perfect environment for growth of the online grocery market in the U.S. over the last five years,” says David Sprinkle, research director for Packaged Facts. “There’s been increased use of mobile phones and smartphones, interfaces for websites and mobile apps have improved, and there’s been a notable expansion of crowedsourced business models to shopping and delivery.”