E-commerce began its upward sales path several years ago and many retailers took advantage of consumers’ online shopping habits. But grocery stores were late to the party and as recent as 2018, online grocery sales in the U.S. made up only 2-3% of that sector’s total sales. Other developed countries such as the U.K., Japan, and South Korea were seeing about 8-9%.
Mercator Advisory Group published a research report (here) in June 2019 saying that online grocery sales would be having a breakout year reaching about $30 billion. We also expected online grocery sales to double in four years by 2023. Then Covid-19 hit last year and all e-commerce records were broken. That $30 billion figure should surpass $100 billion in 2021 as reported by eMarketer, forecasting online grocery orders to be about 7-8% of total supermarket sales.
While most consumers will return to in-store shopping as vaccination rates increase, online grocery sales will level off, but still find a wide following of customers that have grown accustomed to its convenience and immediacy. Order fulfillment via home delivery will decrease, but will be made up by the increasingly popular curbside pickup of online orders. Mercator will be doing a follow-up to our 2019 online grocery report in Q2 this year.
The following excerpt from a Chain Store Age article reports more on the topic:
Online grocery shopping is moving from a first-time trial to a habit for many U.S. shoppers.
That’s according to a report by eMarketer which found that online U.S. grocery sales jumped 54% last year to $95.82 million, giving it a 12.0% share of total U.S. e-commerce sales and 7.4% of all grocery sales.
Looking ahead, growth will slow as the vaccine rollout allows shoppers to more comfortably return to stores. But a portion of online grocery shopping will remain, pushing it past $100 billion in spending for the first time in 2021, a year ahead of previous estimates. And by 2023, online grocery sales will make up 11.2% of total U.S. grocery sales, according to eMarketer.
The growth of online grocery sales will also be driven by higher spending per buyer. eMarketer estimates annual spending per buyer at $728 for 2020 and $818 in 2021. By 2023, it expects the figure to exceed $1,000.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
