Slower growth in overall grocery spending is anticipated during the next five years, but the online segment is projected to increase at a CAGR of 8.9% — more than five times faster than the 1.7% rate expected for the in-store segment according to the new Brick Meets Click report, U.S. Grocery Sales 5-Year Forecast: 2025-29.
In addition, the online segment, which includes pickup, delivery and ship-to-home, will account for 17% of all grocery sales in the U.S. by the end of 2029, according to a news release.
In 2024, annual e-grocery sales finished up just above 9% versus 2023, driven by promotion-fueled year-over-year growth in the high teens during the second half of the year, offsetting the absence of growth during the first six months, the release said. The surge in e-grocery sales has continued into this year, and as a result, the online segment is expected to post similar relative gains for 2025, with delivery continuing to drive most of the year-over-year growth.
With online sales expected to grow 5.2 times faster than in-store sales, e-grocery will account for nearly half of the grocery market’s total absolute dollar growth over the next five years, with in-store driving the rest, the release said. That said, e-grocery is forecast to contribute nearly 40% of the gains in 2025 and more than 50% of the gains in 2029.
“As firms, especially grocers, review our new five-year forecast it’s important to keep in mind that mass, and Walmart (excluding Sam’s Club) now account for nearly 50% and 40% of today’s e-grocery sales, respectively, and that the top-line view includes ship-to-home, a service that most grocers don’t offer,” said David Bishop, partner for Brick Meets Click. “Given these factors, we encourage firms to leverage this national forecast as a guide for examining their regional trade areas in terms of competitive set, household demographics and growth opportunities.”
The adoption of a more restrictive immigration policy by the current administration is one factor contributing to the forecast slowdown in sales growth, the release said. In fact, the administration employed a similar, albeit less draconian approach during its first term, which caused immigration to decrease at a CAGR of 9% for the first three years, excluding 2020 due to COVID-19. Applying a similar rate through 2028 results in a 54-basis-point drag on the five-year e-grocery sales CAGR, the release said.
Changes in trade policy (i.e., tariffs) can trigger rapid and significant shifts in buying behaviors due to higher prices. While political uncertainty makes it difficult to predict how tariffs will impact the grocery market, the forecast calls for grocery-related inflation to run between 2.7% and 1.2% through 2029; this encompasses food at home, housekeeping supplies, pet products, personal care products, alcoholic beverages at home and tobacco and smoking products, the release said.
Pending legislation linked to the Supplemental Nutrition Assistance Program (SNAP) at the federal and state levels is a “gray swan” that could impact growth rates for grocery sales both in-store and online, the release said. The proposed changes threaten to reduce payments overall, make it harder for people to qualify for assistance and/or restrict the types of products eligible under the programs. Approximately 22 million, or 17%, of all U.S. households receive SNAP benefits as of January 2025, so reductions will likely trigger further changes in what, where and how much is purchased, the release said.
“Grocery retail has always been a dynamic business, but the rate of change over the last five-plus years has disrupted shopping patterns, especially for delivery and value formats, like Walmart, and that disruption is not disappearing anytime soon,” Bishop said. “Before the pandemic, e-grocery’s draw was largely about saving time, during the pandemic it was about protecting your health, and today it’s often more about saving money and time.”
The Brick Meets Click 5-Year Grocery Sales Forecast is an annual initiative that projects how grocery sales are expected to change overall, as well as across in-store and online, offering a deep dive into each service method (pickup, delivery and ship-to-home). The forecast is based on a proprietary model that leverages Brick Meets Click research and insights along with secondary sources from various government agencies.