Online grocery shopping has become one of the most significant retail transformations of the past several years. What began as a pandemic-driven necessity has evolved into a long-term consumer preference, with grocery chains investing heavily in fulfillment centers, curbside pickup, delivery services, and digital platforms to support sustained growth.
Albertsons’ continued expansion of Drive Up & Go locations, faster delivery capabilities, and technology-enabled operations illustrates how grocery e-commerce is becoming a larger share of overall sales. As retailers refine omnichannel experiences, convenience—not necessity—is expected to drive the next phase of digital grocery adoption.
It was only a few years ago, pre-pandemic, that U.S. online grocery orders made up about 3-4% of total sales. High-density countries like the U.K., Japan, and South Korea were seeing 7-8%. Fast forward to 2021, and U.S. mega-chains such as Albertsons are closing in on 10% of total sales.
With big investments by supermarket chains in their fulfillment infrastructure, mainly warehouses and delivery resources, it’s not far-fetched to imagine online sales to grow even more. Consumers mostly chose delivery fulfillment during the pandemic, and many will stay with that. Now the big online ordering boost is coming from curbside pickup which will be the primary driver of future sales growth.
The following excerpt from a Supermarket News article reports more on the topic:
Albertsons Cos. could see online grocery potentially reach 20% of sales, driven by stepped-up e-commerce investment and greater consumer affinities for digital shopping and eating at home following the COVID-19 pandemic, according to President and CEO Vivek Sankaran.
Boise, Idaho-based Albertsons stands as a “stronger company today than before we went into the pandemic early last year,” adding new customers and boosting shopper frequency and retention, Sankaran told Citigroup Global Markets analyst Paul Lejuez on Friday in Citi’s Retail Madness Virtual Conference.
“Over the last couple of years, just about every important capability in our company is now data- and technology-enabled, whether it’s the promotion engine, ordering, production, automation in DCs, etc. And we have more to do,” Sankaran said. “We’ve put a lot of money and energy into our digital transformation. We are excited. We’re going to roll out a whole new suite of customer-facing applications in April. We’ve been working on it through the year. Our e-commerce business has grown tremendously. We now have 1,400 locations with Drive Up & Go [curbside pickup]. We’ll get to 1,800 before this year is over. And we are aiming for two-hour deliveries in all our markets. That’s how we see that business going.”
The rapid growth of online grocery sales demonstrates that digital grocery services have become a permanent part of the retail landscape. Investments in fulfillment infrastructure, automation, and customer-facing technology are positioning leading grocers to capture an even greater share of consumer spending as online ordering becomes routine.
As curbside pickup and fast delivery continue to improve, retailers that deliver seamless omnichannel grocery retail experiences will be best positioned to strengthen customer loyalty, increase basket sizes, and sustain long-term growth in an increasingly digital marketplace.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group