According to the Brick Meets Click/Meracatus Five Year Grocery Sales Forecast, online grocery sales in the U.S. will experience an annual growth rate of 11.7% over the next five years. This increase will result in online grocery sales accounting for 13.6% of total grocery sales by 2027, an increase over its current 11.2% (2022). David Bishop, a Partner at Brick Meets Click stated, “Now more than ever, grocers need a grounded view of the future market while simultaneously strengthening the customer experience to protect their base business and improving the profitability of this higher cost-to-serve mode of shopping.”
Total grocery sales are anticipated to grow at a CAGR of 7.4% over the same period. Inflation is expected to fuel nearly three quarters of the projected gains for in store sales but less than half of the gains for online sales. The report also found that health concerns will continue to be a driving factor for the demand for online grocery. The fastest growing section will be pickup grocery, expected to grow 13.6% in the next five years, with delivery growth rate projected at 10.8% and ship-to-home growth rate of 8.0%.
The CEO and President of Mercatus, Sylvain Perrier had a few suggested strategies retailers can use to increase margin such as a lower cost pickup service, using multiple delivery services and utilizing retail media. As Sylvain Perrier stated, ““When it comes to achieving online channel profitability, my advice to grocery retailers is: Work smarter, not harder, and focus on the fundamentals.”