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Digital grocery budgets to rise despite losses in 2023

Digital grocery budgets to rise despite losses in 2023

U.S. digital grocery sales ended the year at approximately $121 billion, down from $128 billion in 2022, yet overall grocery sales increased 3.1% to $926 billion for the year, according to a report from Grocery Doppio as reported in Supermarket News. Despite the decrease in digital sales, executives remain optimistic and still plan to invest in its future growth.

According to the report, grocers took an estimated $19 billion loss in digital sales over the course of the year (compared to a $23 billion loss in 2022) due to unavailable or unsubstituted items, along with a $281 million sales margin loss.

“Inflation put a dent in 2023 digital grocery sales,” said Gaurav Pant, chief insights officer at Grocery Doppio. “As customers modified their shopping strategies to battle rising costs, they did more in-store purchasing. However, grocers’ technology investments for 2024 demonstrate confidence that the long-term trend for digital grocery is still up and to the right.”

Grocery executives surveyed for the report said the biggest challenges for digital grocery sales in 2024 are top line revenue growth and profitability. More than four of five executives said that improving the integration between their brick-and-mortar operations and digital systems is their top priority.

Executives also told Grocery Doppio that they plan to increase their digital grocery budgets by 8% to 14% next year, and artificial intelligence budgets will rise even more. Nearly three of four respondents expect AI capabilities to be integrated into their technology by 2025.