North America Online Grocery Market Outlook, 2028

North America is expected to have a significant market share in the global online grocery shopping market due to the presence of large retailers who own big wholesale shops and provide online grocery shopping services. North America is home to several key players, including Walmart; Instacart; Amazon.com, Inc.; Target; and The Kroger Co.; among others. The early adoption of advanced technology and services along with high awareness among consumers on how to use online grocery shopping apps is spurring the market growth of online grocery shopping in North America. The ease and convenience provided by online grocery shopping further increase the demand in the region. The growing population, technological advancements, on-going urbanization, and a paradigm shift in consumer purchasing behaviours are pushing the demand for grocery shopping via online applications and websites, driving growth opportunities in the market. In January 2021, Walmart expanded its automated systems for online grocery orders for pick-and-pack shoppers. The company extended its high-tech systems that pick and pack online grocery orders. As a result of the Coronavirus pandemic, the company's online grocery orders spiked. In addition to that, consumers in North America are becoming more environmentally conscious and are seeking out sustainable options when shopping for groceries. As a result, many retailers are offering more eco-friendly packaging options and partnering with suppliers who prioritize sustainability. Delivery services such as Instacart and Shipt have experienced significant growth in recent years, providing consumers with the convenience of same-day delivery or pickup from their favourite grocery stores.

According to the research report, “North America Online Groceries Market Outlook, 2028” the market was valued at USD 59.31 Billion in 2022. Over the next five years, government and private initiatives are likely to promote the expansion of the online grocery delivery business. Walmart Canada, for example, has a USD 3.5 billion investment plan over the next five years aimed at producing significant growth and improving the online and in-store shopping experiences easier, faster, and more convenient for Walmart customers. Also, with the help of advanced technology, the home delivery option is expected to bring new growth opportunities for the online grocery delivery market over the next five years. For instance, Amazon.com Inc. intends to impose fees on online buyers for grocery orders less than USD 150, highlighting the challenging economics of delivering food to customers' doorsteps. As a result of the COVID-19 epidemic, consumer purchasing habits have changed. Consumers have increased their use of online grocery delivery services, providing a variety of market growth opportunities over the next five years. For instance, Uber introduced online groceries, first making the service available in 19 locations across Latin America and Canada. Customers in Toronto and Montreal may use the Uber app to order from store partners such as Walmart, Metro, Costco, and Rexall. Key market players, such as Amazon Fresh and Walmart Inc., play a significant role in the rapid adoption of super-fast delivery services. For instance, Metro, a Canadian grocery and pharmacy company, expanded its collaboration with Instacart. Customers may order from the retailer's Adonis banner and bargain formats Super C and Food Basics with delivery service in an hour.

Based on the report, the North America market is segmented into three countries including United States, Canada and Mexico. Among them, United States is dominating the market in 2022. The US is particularly witnessing steady growth in e-commerce sales. However, the recovery of in-store or offline shopping in line with the easing restrictions could challenge any potential growth in online sales figures. The increased proliferation of e-commerce platforms, together with rising digitization across the country, is expected to boost the growth of the US online grocery business. The Coronavirus outbreak has resulted in a significant surge in online grocery purchases in the region. This pattern is predicted to continue throughout the forecast period. The market is primarily driven by rising disposable income and an increase in people's preference for comfort. Online grocery provides an easy and convenient way of ordering groceries. It saves time, and other resources also provide an extensive range of groceries as well as non-grocery products. The rising millennial population and growing e-commerce market have also added fuel to the growth of the market. Moreover, the development of business models by dominant players and a combination of voice technology will further drive the growth of the market. Smartphones is widely used for online shopping owing to their ease of operation as they allow users to buy products over mobile applications. Thus, the growing number of Smartphone users also is anticipated to propel the market growth over the forecast period. Furthermore, the disruption of COVID-19 has directed an expansion in the number of customers purchasing grocery online in order to avoid going to department stores and restrict their social connections. Although the impact of coronavirus has caused an upsurge in online grocery shopping across the country only recently, it is anticipated to improve the consumers’ buying behaviour and positively influence the market over the long term. However, the lack of tangible evidence of the products while purchasing online groceries is a big problem that is projected to stymie the expansion of the US online grocery business. Furthermore, a lack of trust in the freshness of items is a big barrier to individuals transitioning to online grocery shopping in the country. Other obstacles, like as interaction and delivery fraud, can also limit the growth of the US online grocery business.

Grocery delivery options such as same-day or rapid delivery, as well as click and collect, remain distinct for market growth. In the United States, online grocery delivery services offer contactless and next-day or same-day deliveries. This trend may encourage small-scale grocers to enter the business by collaborating with third-party service providers such as Instacart. For example, Instacart, an ODP Corporation fully owned company, provides same-day delivery from over 1,000 Office Depot and OfficeMax locations in the United States. In addition, Walmart is continually drawing customers for its online grocery market by leveraging its proximity to its client base and current brick-and-mortar footprint. To boost sales during this pandemic, Walmart and other retail behemoths are emphasising the Buy Online Pick-up in Store (BOPIS) strategy. The number of people who shop for groceries online has more than doubled in the last few years. Amazon has dominated the US online grocery market by offering the Amazon Fresh service. Amazon's revolutionary grocery store strategy includes a collect-and-click option, which allows customers to pick up online grocery shopping within 15 to 2 hours. The e-commerce company also provides private-label products and checkout-free grocery shopping through Amazon Go. Based on the delivery type, click and collect segment is growing at higher compound annual growth rate by 2023-28.

Key players in the market are expanding their retail stores to offer online grocery delivery services across the United States. For example, Instacart partnered with 7-Eleven, the world's largest convenience retailer, to open over 4,000 new locations across the country. As a result of this expansion, Instacart now delivers to over 6,000 7-Eleven outlets, reaching nearly 60 million US households. Coupons and unique savings are being offered by online grocery sellers, which will create new business opportunities across the United States. Instacart has launched Priority Delivery, a new experience that allows customers in the United States and Canada to receive speedier grocery delivery. Customers in the country's biggest cities may now get groceries delivered in as little as 30 minutes. Functional foods and beverages are fast developing and driving the North American online grocery delivery business due to their health benefits. For example, Instacart expanded its presence in Quebec, expanding the possibility of same-day delivery availability to 90% of Canadian households. Based on the product type, the market is segmented into staples & cooking essentials, snacks & beverages, breakfast & dairy, fresh produce, meat & seafood and others. Among them, staples & cooking essentials segment dominated with more than 40% market share in 2022. Staples and cooking essentials are high volume items, which mean that they are purchased frequently and in large quantities. This makes them an attractive segment for retailers since they can generate significant revenue. They are typically non-perishable items that are easy to store and ship, making them ideal for online sales. Consumers are more likely to purchase these items online because they don't have to worry about them spoiling during transit.

Key Devleopments

• January 2023 - SPAR extended its operations in Latvia by launching a new store in Rzekne. The 265 sq. m neighbourhood shop has everything required for everyday living, including a bakery and a fresh meat sales section.
• January 2022 - Instacart expanded its partnership with Michaels, the largest arts and crafts retailer, to launch same-day delivery from more than 100 Michaels stores across Canada. In May 2022, Instacart, a premier retail enablement business in North America, collaborated with over 10 additional retailers to expand same-day delivery across the country, including food and pharmacy major Metro Inc., discount retailer Giant Tiger, specialty grocer Galleria Supermarket, and others. Following its partnership with Metro, Instacart is working with Canada's top five groceries, including Costco, Loblaws, and Walmart. Instacart offers same-day delivery to over 90% of Canadian households across all ten provinces. In September 2022, Instacart, a significant grocery technology business in North America, announced Connected Stores, a collection of six new Instacart Platform technologies that stack on top of current products, assisting grocers in combining the best of online ordering with in-store shopping for consumers.
• March 2022 -Walmart Canada announced an investment of over USD118 million in constructing a new high-tech sortable fulfilment centre in Rocky View County, Alberta, just outside of Calgary. The company's investment is intended to enhance Walmart consumers' online and in-store shopping experience to be more accessible, faster, and more convenient. The retailer intends to invest in continued growth in Alberta and across Canada.
• May 2022 - With the launch of extended drone delivery services, the retailing behemoth Walmart is now steadily elevating its aerial cooperation with DroneUp to new heights. They would be able to service potential clients in around 4 million homes spread across six US states thanks to this.
• April 2021 - FreshDirect, a pure-play online grocer, was acquired by Ahold Delhaize and private equity firm Centerbridge Partners.
• March 2021 - In collaboration with automated logistics expert Tortoise, Albertsons Cos. supermarket chain Safeway is testing a remote-controlled grocery delivery cart in Northern California.
• November 2021 - The e-commerce behemoth Amazon announced that the merger of its food businesses Fresh and Pantry into a single, consolidated store called Amazon Fresh was complete.

Major Companies present in the market:

Amazon, Alibaba, Walmart Inc, Koninklijke Ahold Delhaize N.V., Rakuten Group Inc., Supermarket Grocery Supplies Private Limited, Target Brands, Inc., Costco Wholesale Corporation, Albertsons Companies, Inc, Wegmans Food Markets, Inc

Considered in this report

• Geography: North America
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report

• North America Online Groceries market with its value and forecast along with its segments
• Country-wise Online Groceries market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Countries covered in the report:

• United States
• Canada
• Mexico

By Product Type

• Staples & Cooking Essentials
• Snacks & Beverages
• Breakfast & Dairy
• Fresh Produce
• Meat & Seafood
• Others

By Delivery Type

• Home delivery
• Click and collect

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; the author has started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organisations related to the artificial lawn industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.