US Online Grocery Retailing Market Report 2022
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“Rapid adoption of grocery ecommerce amid the pandemic required retailers to move quickly in an evolving digital landscape. Consumers are continuing to adapt to life amid COVID-19, as convenience and value overtake pandemic concerns as drivers for online shopping. In the years ahead, ecommerce will grow to comprise a higher share of the total market, and retailers have an opportunity to re-invent online platforms to deliver personalized and enjoyable digital shopping experiences.”
– Brittany Steiger, Senior Analyst – Retail & eCommerce
This Report looks at the following areas:
- The impact of COVID-19, inflation, supply chain constraints and other market factors on consumer behavior and the online grocery market
- Where consumers shop and what they look for in their primary online grocer
- Motivators and barriers to shopping online for groceries
- Consumers’ online grocery shopping behaviors and preferences
- The evolution of omnichannel shopping
Collapse All
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Overview
- What you need to know
- This Report looks at the following areas
- Definition
- Market context
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Executive Summary
- Top takeaways
- Market overview
- Figure 1: Total US sales and fan chart forecast of online groceries*, at current prices, 2016-26
- Figure 2: Category outlook, 2022-27
- Opportunities and challenges
- Reinvent store pickup to take advantage of the BOPIS boom
- Enhancing the shopper journey with personalization
- Focus on fresh
- Invest in technology that supports last-mile fulfillment
- Impact of inflation and supply shortages on online grocery
- Key consumer insights
- eCommerce remains elevated, but the store is still the preferred grocery channel
- Consumers who try ecommerce are satisfied and sticking with it
- Consumers shop online to save time – replacing pandemic factors as the top driver
- Lack of consumer confidence in fresh foods and substitutions a major barrier
- Online shoppers like shopping list features, to the detriment of impulse shopping
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Market Size and Forecast
- Upward trajectory of ecommerce expected to reach 20% of total market within five years
- Figure 3: Total US sales and fan chart forecast of online groceries*, at current prices, 2016-26
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- Figure 4: Total US sales and forecast of groceries*, at current prices, 2016-26
- Upward trajectory of ecommerce expected to reach 20% of total market within five years
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Segment Performance
- Health and beauty still comprise the majority share of ecommerce, but food and beverages continue to grow
- Figure 5: total us online sales of groceries*, by segment, at current prices, 2016-21
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- Figure 6: Total US online sales of groceries*, by segment, at current prices, 2019 and 2021
- Health and beauty still comprise the majority share of ecommerce, but food and beverages continue to grow
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Market Factors
- Shifts in the pandemic have an impact on consumer behavior
- Inflation and rising costs will shift the online grocery landscape
- Figure 7: 12-month percentage change, Consumer Price Index – All items versus food at home items, 2021- 22
- Figure 8: US gasoline and diesel retail prices, 2001-22
- Technological innovation carves out new possibilities for online grocers
- Government leaders crack down on rapid delivery and dark stores
- Impact of climate change on grocery ecommerce
- Figure 9: Town & Country Markets all-electric delivery fleet, 2022
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Competitive Strategies and Market Opportunities
- Competitive strategies
- Kroger leverages Ocado partnership to revolutionize digital expansion strategies
- Figure 10: Kroger + Ocado announce plans for US expansion, 2022
- Grocers lean into BOPIS solutions to keep convenience coming
- Figure 11: Opie Drive-Thru Grocery; Fresh Street pickup-only grocery, 2021 and 2022
- Instacart pivots to expand service offerings for retailers
- Figure 12: Instacart unveils platform suite for grocers, 2022
- Walmart exerts its dominance in the online grocery channel
- Figure 13: Walmart promotes delivery services to consumers and third-party partners, 2021 and 2022
- H-E-B and Albertsons leverage livestream shopping
- Figure 14: H-E-B virtual cooking classes, seasonal soups, 2022
- Market Opportunities
- Enable smarter substitutions and personalized shopping through AI and machine learning capabilities
- BOPIS is a buoy to online grocery channel
- Strengthen service offerings through online personal shoppers
- Acquire third-party rapid delivery firms to emphasize speed
- Expand center aisle and general merchandise appeal via ecommerce channels
- Figure 15: Giant Foods + Ship2 Me partnership, 2022
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The Online Grocery Consumer: Fast Facts
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Grocery Shopping Overview
- Who shops for groceries
- Nearly all adults shop for groceries; many share the responsibility
- Figure 16: Grocery shopping responsibility, by gender and age, 2022
- How often they shop
- Shopping frequency is increasing as consumers shop in new ways and across multiple channels
- Figure 17: Shopping frequency, by generation, 2022
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- Figure 18: Shopping frequency by consumer shopping method, 2022
- Parents are frequent grocery shoppers
- Shopping method
- Online and multichannel shopping remains elevated, but in-store sees a rebound
- Figure 19: Shopping methods, 2022
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- Figure 20: Select Shopping Methods, year over year, 2022
- Millennials are driving multichannel shopping; older consumers stick to in-store
- Figure 21: Shopping Method, by generation, 2022
- Consumers shop online for larger stock-up trips
- Figure 22: Preferred shopping method by trip type, 2022
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- Figure 23: Preferred shopping method by trip type, by generation, 2022
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Continued Impact of Covid-19 on Online Grocery Shopping
- Online shopping remains elevated as pandemic behaviors persist
- Figure 24: Impact of COVID-19 on grocery shopping, 2022
- Who’s shopping more online
- Figure 25: Selected Impact of COVID-19 on grocery shopping, by gender, age and parental status, 2022
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- Figure 26: Target adds Starbucks pickup to its “Drive Up” service, 2022
- Online shopping remains elevated as pandemic behaviors persist
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Interest in Future Online Grocery Shopping
- Interest in online shopping continues to grow, but some holdouts remain
- Figure 27: Interest in future online shopping among in-store shoppers, 2022
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- Figure 28: Interest in future online shopping among in-store shoppers – NETS, 2022
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- Figure 29: Anticipated amount of online shopping among online shoppers, 2022
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- Figure 30: Anticipated amount of online shopping among online shoppers, by generation, 2022
- Interest in online shopping continues to grow, but some holdouts remain
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Shopping by Category
- Consumers still shop in-store for most categories, but online shopping habits hold
- Figure 31: Shopping for major categories – Online versus in-store, 2022
- Non-perishables and beverage most often shopped online; Millennials overindex in all categories
- Figure 32: Shopping for major categories – Any online, by generation, 2022
- Consumers still shop in-store for most categories, but online shopping habits hold
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Retailers Shopped Online
- Walmart and Amazon go head to head, but Walmart retains its lead
- Figure 33: Retailers shopped online, 2022
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- Figure 34: Giant Foods eliminates pickup fees, 2022
- Younger consumers drive mass merchant online grocery dominance; Baby Boomers loyal to supermarkets
- Figure 35: Retailers shopped online, by generation, 2022
- Walmart and Amazon go head to head, but Walmart retains its lead
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Usage of Online Shopping Apps and Memberships
- Paid memberships dominate; Instacart falls below direct from retailer
- Figure 36: Apps and Memberships used for online grocery shopping, by generation, 2022
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- Figure 37: Kroger highlights fuel points; Walmart+ offers Spotify Premium benefit, 2022
- Paid memberships dominate; Instacart falls below direct from retailer
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Reasons for Shopping Online
- Convenience, especially time saved, drives consumers to shop online
- Figure 38: Reasons for online grocery shopping, 2022
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- Figure 39: Walmart adds “Shop By Diet” feature, 2022
- Value to rise in importance amid escalating prices
- Figure 40: Select reasons for shopping online – Value, by generation, 2022
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- Figure 41: Afterpay polls users on Twitter about BNPL for groceries
- Younger consumers seek enjoyment when shopping online
- Figure 42: Select reasons for shopping online, by generation, 2022
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- Figure 43: Albertsons + Pinterest shoppable recipes, 2021
- In their own words: consumers describe their online shopping preferences
- Convenience, especially time saved, drives consumers to shop online
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Reasons for not Shopping Online More
- Strong preferences for in-store shopping a hold; lack of trust is a factor
- Figure 44: Shipt ad campaign highlights personal shoppers, 2021
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- Figure 45: Reasons for not shopping online more, by generation, 2022
- Asian consumers more hesitant than others to shop online
- Figure 46: Select reasons for not shopping online more, by race and Hispanic origin, 2022
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- Figure 47: Umamicart, Asian-focused online grocer, 2021
- Figure 48: Weee!, Asian and Hispanic-focused online grocer, 2022
- Strong preferences for in-store shopping a hold; lack of trust is a factor
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Online Shopping Behaviors
- Online shopping supports list-making and price comparison
- Figure 49: Online shopping behaviors, 2022
- Baby Boomers take a prescriptive approach, younger consumers more likely to shop around
- Figure 50: Select online shopping behaviors, by generation, 2022
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- Figure 51: Instacart adds features to increase value for shoppers, 2021
- Consumers look for transparency on product labels
- Figure 52: Select online shopping behaviors, product labels, 2022
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- Figure 53: Research on nutrition labeling in grocery ecommerce; Kroger “Food as Medicine” recognition, 2022
- Impulse and add-on purchases a challenge in grocery ecommerce
- Figure 54: Select online shopping behaviors, impulse and add-on purchases, 2022
- Behaviors of frequent online grocery shoppers
- Figure 55: Behaviors of frequent online grocery shoppers, 2022
- Online shopping supports list-making and price comparison
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Attitudes toward Online Grocery Shopping
- Convenience is the hook, but opportunities to innovate abound
- Figure 56: Attitudes toward convenience, by generation, 2022
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- Figure 57: Google Cloud launches Retail Search, 2022
- Fresh foods present a challenge and an opportunity for ecommerce
- Figure 58: Attitudes toward freshness, by generation, 2022
- Consumers expect a range of delivery options
- Figure 59: Attitudes toward delivery, by generation, 2022
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- Figure 60: Domino’s pizza rewards customers for picking up orders, 2022
- Rapid delivery serves up speed and convenience for those willing to pay for it
- Figure 61: Kroger, Publix partner with Instacart on rapid delivery, 2021
- Figure 62: Attitudes toward fast delivery, by gender and age, 2022
- Online experiential concepts add enjoyment and encourage impulse purchases
- Figure 63: Attitudes toward impulse and enjoyment, 2022
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- Figure 64: Thailand’s Central Retail plans supermarket in the metaverse, 2022
- Consumers are interested in ordering fresh, hot prepared meals online
- Figure 65: Attitudes toward prepared food delivery, by generation, 2022
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- Figure 66: Attitudes toward prepared food delivery, by race and Hispanic origin, 2022
- Parents are a key target market for online grocery shopping
- Figure 67: Attitudes toward online grocery shopping, by parental status, 2022
- Convenience is the hook, but opportunities to innovate abound
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Appendix – Data Sources and Abbreviations
- Data sources
- Sales data
- Forecast
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
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Appendix – The Market
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- Figure 68: Total US online sales and forecast of groceries*, at inflation-adjusted prices, 2016-26
- Figure 69: Total US online sales of food and beverages*, at inflation-adjusted prices, 2016-21
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- Figure 70: Total US online sales of health and beauty products, at inflation-adjusted prices, 2016-21
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Appendix – The Consumer
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- Figure 71: Interest in Future online shopping among in-store shoppers, by generation, 2022
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- Figure 72: Reasons for online grocery shopping, by generation, 2022
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