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Online grocery sales projected to reach almost $120 billion by 2028

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Online grocery shopping
Total online grocery sales are projected to reach almost $120 billion annually by the end of 2028.

A new forecast shows online grocery sales are on pace to grow three-times faster than in-store sales over the next five years.

Overall grocery sales in the U.S. are forecast to grow at a compound annual growth rate (CAGR) of 1.6% through 2028, according to the new U.S. eGrocery Sales Forecast from Brick Meets Click. This is considerably slower than the 5.6% posted over the five years ending in 2023, which were powered by the pandemic and price inflation.

However, online grocery sales are projected to increase at a CAGR of 4.5%, more than three-times faster than the 1.3% rate anticipated for the in-store segment over the next five years. Total online grocery sales, which includes the delivery, pickup and ship-to-home methods, are projected to reach almost $120 billion annually by the end of 2028 and account for 12.7% of total grocery sales in the U.S., up 170 basis point (bps) compared to 2023.

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Online grocery sales forecast
SourBrick Meets Click/Mercatus 5-Year eGrocery Sales Forecast, April 2024.
Online grocery sales forecast
SourBrick Meets Click/Mercatus 5-Year eGrocery Sales Forecast, April 2024.

Excluding ship-to-home, since most grocers do not offer this service, delivery and pickup sales combined are expected to represent 10.7% of total grocery sales in five years. Pickup sales are expected to grow faster (5.4%) than delivery (4.4%) or ship-to-home (2.8%) through 2028, and pickup is expected to remain the dominant method, accounting for nearly half (47%) of all online grocery sales at the end of five years. 

“Two factors are creating significant headwinds that impact our eGrocery forecast. First, the market is maturing. Nearly all of the people interested in online grocery shopping have used it at least once by now,” said David Bishop, partner at Brick Meets Click. “Second, even though inflation has recently fallen faster than expected, its cumulative effect continues to drive a flight-to-value behavior in grocery shopping and that will slow topline sales growth.” 

The Brick Meets Click forecast also identifies order frequency as the most important growth driver through 2028, as expanding the active user base will prove more challenging. In addition, building higher average order values (AOVs) will largely be the result of a customer mix that includes a higher share of repeat customers, who spend more compared to first-time customers. 

“It’s clear that creating stronger connections with existing customers is essential to driving higher spending and order activity,” said Mark Fairhurst, global chief growth officer at Mercatus, sponsor of the report. “Expanding personalization efforts to include targeted offers or tailored recommendations, will play a vital role in increasing repeat purchase behavior and eGrocery sales.”

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