Online grocery sales set to grab 20 percent market by 2025

February 2017
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Online grocery shopping could grow up to USD 100 billion on food-at-home items by 2025.

Around a quarter of US households currently buy some groceries online, up from 19% in 2014, and more than 70% will engage with online food shopping within 10 years, according to "The Digitally Engaged Food Shopper" report from Food Marketing Institute and Nielsen. It also found that of those who will buy digitally, 60% expect to spend about a quarter of their food dollars online in 10 years.

The report also found millennial shoppers surveyed were more willing to buy groceries online in the future than other consumer groups. It also pointed out that roughly 3 in 5 grocery shoppers today are looking for sales or coupons on their mobile devices before entering the store and that just over half will use mobile apps to shop at the store.

A key takeaway of the FMI-Nielsen report is that online grocery spending could grow during the 2016-2025 forecast period from 4.3% of the total US food and beverage sales to as much as a 20% share, or reaching more than USD 100 billion, based on the most upbeat scenario. In 2016, online grocery sales were about USD 20.5 billion.

The most optimistic outlook has online grocery sales growing at a compound annual rate of nearly 20% during the 2016-2025 forecast period. Even under the most "conservative" scenario, the compound annual growth rate during the forecast period is seen rising at a 9% pace and the share of online grocery spend doubling from its current level.

The study predicts that canned goods, condiments, spices and other so-called center of store products will likely shift faster to online than traditionally perimeter items such as fresh produce and meats. The 2016 online sales were the equivalent of 764 grocery stores, based on store volume; by 2025, the digital share could become comparable to nearly 3,900 stores.