• US digital grocery sales will grow another 20.5% this year, reaching $147.51 billion. 
  • Walmart Inc. is the No. 1 retailer in digital grocery and will remain on top, followed by Amazon and Kroger.
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With digital grocery buyers accounting for more than half of the US population, retailers are rushing to respond, and Amazon Fresh will open dozens of new brick and mortar stores across the country over the next few years. Ultrafast grocery startup are pushing past substantial losses in an already competitive marketplace and exploring new revenue streams. Major players are expanding their service grounds to deliver groceries.

Digital grocery orders are on track for double-digit growth in the years to come, whether through click and collect or delivery. US sales are expected to double in the next five years.

Digital grocery adoption remains a key driver despite the fact that certain economic conditions may still affect its share of the market. Consumers may be less willing to pay for certain digital grocery services if the price of groceries continues to go up. The labor shortage that has put delivery drivers and other fulfillment service workers in short supply could lead to additional costs being passed on to the consumer.

US digital grocery industry size & stats 

Digital grocery is growing at a higher rate than in-store grocery. Digital will make up 11.2% of US grocery sales this year, which lags behind digitally mature retail categories but is larger with respect to absolute dollar figures. There is still a lot of room for growth.

The year 2020 was a boon for those buying groceries online for the first time. Growth won't be as significant in the years to come because it was propelled into the mainstream by the swine flu. Going forward, the annual growth of digital grocery consumers will be less than in the past.

The majority of online grocery buyers are younger than other generations and prefer same-day delivery more than others. In urban communities, an array of delivery services are vying for the attention of this age group.

Adoption will slow even as sales rise because existing digital grocery buyers will prop up the market with larger budgets. The average annual spend per digital grocery buyer will go from $856.47 in 2021 to $1,524.84 in 25 years.

The effect will be felt by both retailers and third party delivery companies. Retailers that have not yet invested in delivery services will benefit from click and collect. Click and collect is more profitable and an easier move for legacy grocers who want to expand into digital because of cost and last mile logistics.

Customer loyalty will become a main focus as brands race to take advantage of higher spenders. Amazon and Walmart will dial up investments in their memberships as a result.

Top digital grocery shopping companies 

Walmart overtook Amazon to become the leader of US digital grocery sales in 2019. The retailer has announced plans to open micro-fulfillment centers to keep up with a shift to digital across all categories.

Amazon is the only digitally native retailer in the top five. With just over 500 Whole Foods locations and 18 Amazon Fresh locations, it is not well positioned to meet the rising demand for click and collect.

Kroger is far behind Amazon in grocery sales. Kroger's digital grocery sales will only make up 53.13% of Amazon's sales in the next five years. Kroger was an early investor in the digital space, giving it a huge competitive edge over other legacy grocery stores.

The growth of the Pandemic has led to a tie between Target and Albertsons. From a smaller base, both retailers are expected to see greater growth than Walmart, Amazon and Kroger.

Third-party delivery services such as Instacart profit off the likes of these retailers and can't be directly compared, but still take up a significant chunk of the market with 28.8% of digital grocery sales in 2011. Competition is heating up among restaurant delivery companies and as retailers invest in their own delivery infrastructure, which is expected to cause Instacart's stronghold in the space to fall in the future.