Online grocery sales are set to grow thanks to more options for customers, a proliferation of mobile phones and a changing customer mindset.
Online grocery sales more than tripled between 2013 and 2018, and are expected to quadruple from 2018 to 2023, according to market research firm Packaged Facts new report, “Online Grocery Shopping in the U.S., 2nd Edition.”
Leading the growth in online grocery sales will be an increasing number of options for consumers who are become more open to trying online shopping or using online options more frequently to purchase their groceries.
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,” said 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.”