Description

Providing the most comprehensive and up-to-date information and analysis of the US Grocery Retailing and e-grocery market, including the behaviors, preferences and habits of the consumer.

While the online grocery retail market experienced solid growth in the past few years, the pandemic catapulted its trajectory ahead by years. Because of the lockdowns and travel restrictions, many consumers were forced to shop online through necessity. This saw sales grow by 39% in 2020, surpassing $100 billion for the first time.

While this shift towards online grocery shopping was done more through necessity, there will be an expected longer term effect on the market. Although some will revert to in-store shopping once the pandemic ends, many will hold onto their new routines thanks to the convenience and value of online platforms.

As the pandemic ends, online shopping will become more normalized, with consumers mixing in-store and online shopping together rather than exclusively in-store. 78% of shoppers plan to continue their digital shopping habits post-pandemic, indicating that grocery retailers who have invested in online platforms will benefit from these changed behaviours.

Read on to discover more details or take a look at all of our US Food and Foodservice market research.

Quickly understand e-grocery meaning

  • The impact of COVID-19 on consumer behavior and the grocery market, particularly grocery ecommerce.
  • Where consumers are shopping online, including who’s winning and who’s at risk.
  • How much online grocery shopping consumers plan to do in the future and who the most likely target audiences are.
  • Factors that drive consumers to shop online and barriers that prevent them from doing so more.

Covered in this report

Brands: Whole Foods, Kroger, Giant Eagle, Ocado, Big Y Foods, Amazon, Rouses Markets, Nuro, Walmart, Drone Express, Uber (Uber Eats), Gopuff, Ghost Kitchens Brands, US Foods, Hy-Vee, Quiznos, Saladworks, Publix, Save Mart Cos, Price Chopper, Market 32, Food Lion.

Expert analysis from a specialist in the e-grocery field

Written by Diana Smith, a leading analyst in the Food & Drink sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

While some new online grocery shoppers will revert back to stores, conversion will stick for many as in-store safety concerns linger and newfound purchase habits become routines. Leading retailers will continue to invest more in infrastructure improvements including tools and technology, fulfillment space and personnel, and this will give consumers even more confidence to order their groceries from the comfort of their homes.

Diana Smith
Associate Director – Retail & eCommerce

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
    • Definition
    • Market context
    • Economic and other assumptions
    • COVID-19: US context
  2. Executive Summary

    • Top takeaways
    • Market overview
      • Figure 1: Total US sales and fan chart forecast of online groceries*, at current prices, 2015-25
    • Impact of COVID-19 on grocery
      • Figure 2: Short-, medium- and long-term impact of COVID-19 on online grocery, May 2021
    • Opportunities and challenges
    • Help those who need help with online shopping
    • Focus on increasing orders from current online shoppers
    • Increase orders for quick trips, pending profitability
    • Traditional supermarkets risk customers going elsewhere to shop online
    • Transform online shopping experience from functional to personalized and fun
    • Address trust-related barriers
  3. The Market – Key Takeaways

    • Pandemic sets stage for long-term grocery ecommerce growth
    • Grocery ecommerce entails more than foods/beverages, although this is where much of the growth is stemming from
    • Down economy drives shoppers to prioritize value; many shop online for this reason
  4. Market Size and Forecast

    • $100+ billion in online grocery sales from here on out
      • Figure 3: Total US sales and fan chart forecast of online groceries*, at current prices, 2015-25
      • Figure 4: Total US online sales of groceries*, at current prices, 2015-25
    • Impact of COVID-19 on grocery
  5. Segment Performance

    • Health and beauty comprises majority share, but food and beverages are the growth driver
      • Figure 5: Total US online sales of groceries*, by segment, at current prices, 2015-20
      • Figure 6: Total US online sales of groceries*, by segment, at current prices, 2018 and 2020
  6. Market Factors

    • Continued concerns about coronavirus will sway shoppers online for a while longer
      • Figure 7: Concern regarding coronavirus exposure and lifestyle disruption – Any worried (net), March 19-April 2, 2021
    • COVID-19 reverses what was a growing trend in favor of food away from home
      • Figure 8: Sales of food at home and away from home, January 2010-February 2021
    • Food price increases in a down economy put strain on consumers
      • Figure 9: Average household spending on groceries, 2015-20
      • Figure 10: Financial health, by household income, March 31-April 17, 2021
    • Mobile shopping continues to escalate
      • Figure 11: Device used to shop online*, October 2020
  7. Companies and Brands – Key Takeaways

    • Retailers and delivery services expand ecommerce capabilities to meet current demands
    • Now is the time to ramp up efforts to drive product trial and impulse purchases online
    • Opportunity to help shoppers with their health and wellness goals
  8. Competitive Strategies

    • Micro-fulfillment centers popping up everywhere as retailers look to improve order processing
      • Figure 12: Big Y launches online grocery service upon completion of automated micro-fulfillment center
    • Retailers actively testing new delivery mechanisms
    • Drones
      • Figure 13: Kroger partners with Drone Express for drone delivery in Ohio
    • Autonomous vehicles
      • Figure 14: Walmart partners with Cruise for autonomous vehicle grocery delivery pilot
    • Keyless entry
      • Figure 15: Hy-Vee Mealtime to Go prepared foods offering
      • Figure 16: Walmart partners with Ghost Kitchen Brands to offer foodservice
      • Figure 17: Instacart’s “Beyond the cart: A Year of Essential Stories” campaign
      • Figure 18: Amazon Prime Now review
      • Figure 19: Amazon provides for families facing food insecurity
  9. Market Opportunities

    • Become an online resource for wellbeing
      • Figure 20: eMeals expands the number of integrated grocery retailers
      • Figure 21: Walmart’s The Hidden world of Waffles + Mochi culinary viewing experience
    • Stimulate discovery of new foods and impulse add-ons
    • Consider developing an online marketplace
  10. The Consumer – Key Takeaways

    • Shopping frequency declines as consumers consolidate trips
    • eCommerce spikes, but won’t overtake stores
    • All product categories experiencing increased online purchases
    • Walmart > Amazon for the first time
    • Shoppers turn online to save time and money and for the fun of it
    • Consumers like the convenience, but are hesitant to relinquish control
    • Lists play key role in path to purchase, leading to less impulse purchasing
    • Opportunity to anticipate – and provide solutions for – pain points in advance
  11. Grocery Shopping Overview

    • Who’s shopping?
    • Nearly all adults grocery shop to some degree
      • Figure 22: Grocery shopping responsibility, by gender and generation, January 2021
    • How often they shop
    • Shopping frequency down due to pandemic
      • Figure 23: Shopping frequency, by gender and generation, January 2021
    • Where they shop
    • Significant ecommerce gains amid pandemic
      • Figure 24: Shopping methods, January 2021
      • Figure 25: Shopping methods, by generation, January 2021
    • Store remains preferred channel regardless of trip type
      • Figure 26: Preferred shopping method by trip type, January 2021
    • The pandemic effect
    • Online shopping, stock-ups and trip consolidation represent primary behavioral changes during COVID-19
      • Figure 27: Shopping behaviors during COVID-19, January 2021
  12. Interest in Future Online Grocery Shopping

    • Online shopping will stay high after the pandemic threat ceases
      • Figure 28: Interest in future online shopping among in-store shoppers, January 2021
      • Figure 29: Interest in future online shopping among in-store shoppers – nets, January 2021
      • Figure 30: Interest in future online shopping among in-store shoppers, by generation, January 2021
    • A third of online shoppers think they’ll do even more through digital means in the future
      • Figure 31: Anticipated amount of online shopping among online shoppers, January 2021
      • Figure 32: Anticipated amount of online shopping among online shoppers, by generation, January 2021
    • Consumers discuss the pros and cons of online grocery shopping
  13. Shopping by Category

    • All categories likely to be shopped online more in future
      • Figure 33: Shopping for major categories – Online versus in-store, January 2021
      • Figure 34: Comfort with buying fresh foods online, by generation, January 2021
  14. Retailers Shopped Online

    • Walmart advances to best Amazon
      • Figure 35: Retailers shopped online, January 2021
    • Younger shoppers drive mass merchant online grocery dominance
      • Figure 36: Retailers shopped online, by generation, January 2021
  15. Reasons for Shopping Online

    • Saving time is a given, meaning other factors likely will rise in importance
      • Figure 37: Feeding America discusses impact of increased grocery spending on parents
      • Figure 38: Reasons for shopping online, January 2021
    • Millennials drawn by experiential factors
      • Figure 39: Select reasons for shopping online, by generation, January 2021
      • Figure 40: Kroger offers easy and shoppable recipes online
  16. Reasons for not Shopping Online More

    • Consumers’ desire for control keeps them from shopping more online
      • Figure 41: Reasons for not shopping online more, January 2021
      • Figure 42: Instacart “Beyond the cart” personal shopper campaign
    • Lack of trust is a big barrier
      • Figure 43: Select reasons for not shopping online more, by generation, January 2021
    • Battle for share could come down to how delivery fees are managed
      • Figure 44: Attitudes toward delivery costs, by generation and household income, January 2021
      • Figure 45: Walmart removes $35 minimum on Express delivery
  17. Online Shopping Behaviors

    • Consumers seek tools to help them maximize productivity
      • Figure 46: Shipt promotes time and cost savings
      • Figure 47: Online shopping behaviors, January 2021
    • Millennials more willing to break routines and try new products, services
      • Figure 48: Online shopping behaviors, by generation, January 2021
    • Room to grow for personal shopping services
    • Consumers provide input into their shopping process
  18. Attitudes toward Online Grocery Shopping

    • Satisfaction with fresh foods key to higher online shopping frequency
      • Figure 49: Attitudes toward food freshness, by generation, January 2021
    • Opportunity to address pain points in advance
      • Figure 50: Attitudes toward shopping options, by generation, January 2021
    • Consumers want grocery retailers to pay attention to them and their preferences
      • Figure 51: Attitudes toward personalization, by generation, January 2021
      • Figure 52: Albertsons uses Adobe tools to offer more personalization
  19. Appendix – Data Sources and Abbreviations

    • Data sources
    • Sales data
    • Forecast
    • Consumer qualitative research
    • Abbreviations and terms
    • Abbreviations
    • Terms
  20. Appendix – The Market

      • Figure 53: Total US online sales of groceries*, at inflation-adjusted prices, 2015-25
  21. Appendix – The Consumer

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