Executive Summary

Online grocery is a massive, fast-growing market that requires brands and retailers to leverage an evolving set of skills and competencies to succeed. As several key market enablers—including demographic and behavioral shifts, improved omnichannel execution and better delivery logistics—align, the market is approaching a tipping point.

How big is the US online grocery market, and how fast is it growing?

According to our estimates, US grocery ecommerce—specifically online food and beverage sales—will grow 18.2% to $19.89 billion in 2019 and will rank as the fastest-growing product category online. We expect the category to grow at above-average rates for the next few years, but it will remain one of the least-penetrated ecommerce categories for the foreseeable future.

Who are the key players in the online grocery market?

Amazon is expected to own the largest market share of US food and beverage ecommerce sales in 2019 at 32.7%. But Walmart, Target and Kroger are all leveraging their sizeable brick-and-mortar footprints and click-and-collect capabilities to aggressively ramp up their sales and challenge Amazon.

Who buys groceries online, and how frequently do they purchase?

Online grocery buyers currently skew toward young, affluent and urban households that are pressed for time and value convenience. They are more likely to be heavy ecommerce buyers across other categories and early adopters of new technology.

What is driving growth in online grocery?

The desire for convenience, shifting consumer tastes and preferences and price/quality considerations have all bolstered demand for online grocery. Meanwhile, rapid improvements in speed and availability of same-day delivery have improved the customer experience.

What are the operational challenges in online grocery fulfillment?

Logistics and supply chain factors remain significant hurdles in generating profitable grocery ecommerce business, but better availability of click-and-collect and delivery infrastructure have made grocery ecommerce a viable option for more US consumers.

WHAT’S IN THIS REPORT? This report offers an overview of the US grocery ecommerce market, including market size and growth forecasts and key players and drivers behind this sector’s recent emergence.

KEY STAT: Only 2.0% of food and beverage sales will occur online this year, but it will be the fastest-growing ecommerce category at 18.2%.