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Online grocery sales expected to surpass 20% of the overall market in 2026

Online grocery sales expected to surpass 20% of the overall market in 2026

According to a study released by Mercatus and Incisiv, online grocery sales will surpass 20% of the overall U.S. grocery market in the next five years, which is several years before pre-pandemic predictions.

Mercatus, a company that helps grocers sell their products on the internet, reported that grocery e-commerce sales are forecast to account for 9.5% of total U.S. grocery sales this year, up from 8.1% in 2020. Mercatus and Incisiv, which describes itself as one of the leading insights firms for consumer industry digital transformation leaders, expect online’s share to increase to 11.1% in 2022 and 20.5% in 2026.

Before Covid and its significant impact on grocery retailers, e-commerce grocery sales were expected to reach 5.4% of the total market in 2021 and ultimately climb to 14.5% in 2026.

Of nearly 42,000 grocery customers in 20 states polled for the study, 43% shopped online in 2020, up 80% from 2018. Even with relaxed restrictions in 2021, online grocery adoption rose to 49% of respondents in 2021. It’s also interesting to note that customers prefer click-and-collect over home delivery. 76% of respondents favor in-store (44%) and curbside pickup (31%), compared with 24% preferring delivery.

“Home delivery is expected to shrink to lower than pre-pandemic levels as customers shift their preference to pickup,” according to the report. “Three-quarters of all online orders are expected to be fulfilled via stores, either in-store pickup or curbside pickup. Among suburban households, delivery adoption is 80% lower as compared to urban shoppers.”

“Pickup works particularly well for both grocers and their customers in the North American market,” said Mercatus President and CEO Sylvain Perrier. “Pickup services offer grocers more control over the cost to serve online customers than third-party delivery. Online customers love the precision, flexibility and overall convenience that store pickup provides.”

The report also stated that although grocery retailers continue to drive customers “into the hands of delivery providers” like Instacart, consumers don’t like the added cost and lack of control associated with third-party marketplaces. In fact, other than their preferred supermarket, 56% of those surveyed named mass merchants like Walmart and Target as top options for online grocery shopping, compared with 33% citing online-only retailers like Amazon and 11% favoring delivery marketplaces like Instacart.