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Retail Industry Updates

Online Grocery Will Break $100 Billion Barrier in 2021, eMarketer Predicts

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(iStock/SyhinStas)

It’s a bird. It’s a plane. It’s … online grocery.

And it’s soaring, alright.

In 2021, market researcher eMarketer expects online grocery sales to exceed $100 billion for the first time, even as vaccinations increase and shoppers become more comfortable returning to stores.

eMarketer said it previously — as in before the pandemic — had online grocery reaching the $100 billion milestone in 2022. By 2023, the firm expects online grocery sales will make up 11.2% of total U.S. grocery sales.

eMarketer said tens of millions of U.S. consumers became online grocery buyers for the first time during the pandemic. In 2021, the behavior will go from trial to habit for many shoppers, the New York-based company added.

Online grocery sales grew 54.0% in 2020 to reach $95.82 billion, according to eMarketer. Online grocery comprised 12 % of total U.S. e-commerce sales and 7.4% of all grocery sales.

“The pandemic pushed consumers to search for a safe and convenient way of getting essential grocery items, and many retailers adapted to that demand,” said Whitney Birdsall, an eMarketer senior forecasting analyst. “With the growing number of stores offering curbside pickup and an increase in features offered by grocery delivery apps, consumers are now presented with a variety of incentives and options to order their groceries online. A large portion of consumers who became first-time online grocery buyers during the pandemic now prefer this mode of grocery shopping due to convenience.”

The growth of grocery ecommerce sales can largely be attributed to first-time buyers entering the market, according to eMarketer. Last year, the number of digital grocery buyers ages 14 and older in the U.S. (who made a purchase at least once during the year) jumped 42.6% to 131.6 million. By 2022, eMarketer expects that more than half of the U.S. population will be digital grocery buyers.

“Many low-propensity buyers will return to their pre-pandemic purchase behaviors once the threat is sufficiently mitigated through vaccines,” said Andrew Lipsman, an eMarketer principal analyst. “Other consumers, now acclimated to the process of buying groceries online, will do so on an occasional basis. And many who developed a regular habit around buying groceries online will carry the behavior forward. Continued growth in digital grocery will now depend more on purchase frequency than new buyers entering the category.”

The growth of online grocery sales will also be driven by higher spending per buyer, said eMarketer, which estimates annual spending per buyer at $728 for 2020 and $818 in 2021. By 2023, eMarketer expects that figure to exceed $1,000.

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