Online grocery sales are reshaping the food retail industry as omnichannel strategies accelerate growth and redefine how Americans shop. A new report from FMI – The Food Industry Association and NielsenIQ shows online grocery sales will reach $452 billion by 2028, cementing digital commerce as the sector’s primary growth engine.
The findings make one thing clear: the old divide between brick-and-mortar and ecommerce no longer exists. Retailers now compete on how well they connect both into a seamless customer journey.
Online Grocery Sales Drive Industry Growth
Online grocery sales now account for nearly three-quarters of the sector’s total dollar growth. In 2025 alone, e-commerce contributed close to 75% of overall gains, while in-store sales stayed largely flat.
That imbalance signals a structural shift.
Digital channels continue to scale rapidly, with online grocery projected to grow at an annual rate above 11% through 2028. Meanwhile, in-store sales will inch forward at a fraction of that pace, according to the report.
As a result, online grocery’s share of total grocery spending will rise from roughly 18% in 2024 to more than 25% by 2028.
Retailers that fail to invest in digital risk are losing relevance in a market where growth increasingly happens online.
Omnichannel Becomes the Standard
At the same time, shoppers are not abandoning stores; they are blending channels.
Nearly 94% of U.S. grocery shoppers used both online and in-store options in 2025. That behavior defines the modern grocery experience: consumers browse online, compare prices on apps, and still walk store aisles when needed.
This hybrid approach forces retailers to rethink operations.
Instead of treating e-commerce as an add-on, companies now design integrated systems that link digital discovery, fulfillment, and physical stores. The goal is simple: remove friction at every step.
Retailers are also repositioning stores as destinations. They expand fresh offerings, add foodservice, and emphasize health and wellness to complement digital convenience.
Speed and Fulfillment Reshape Competition
As online grocery sales grow, execution becomes the battleground.
Delivery speed has emerged as a key differentiator. Average fulfillment times have dropped sharply, with total delivery windows shrinking from more than six days in 2018 to just over three days today.
Shoppers now expect same-day or next-day delivery, especially for food.
That pressure is forcing retailers to invest heavily in logistics. Many now rely on a mix of store-based fulfillment, regional warehouses, and third-party partners to meet demand.
Shipped and delivered orders dominate, accounting for roughly 80% of e-commerce grocery fulfillment. However, pickup remains relevant for immediate needs and perishables.
Speed alone is not enough. Retailers must also improve digital navigation, product discovery, and checkout experiences to increase basket size and repeat purchases.
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Food Categories Unlock e-Commerce Potential
Despite rapid growth, the online food sector remains underdeveloped relative to its overall market size.
That gap represents opportunity.
Online food sales jumped nearly 19% in 2025, yet many categories, especially fresh items like meat and produce, still rely heavily on in-store shopping.
Meanwhile, categories such as beverages, coffee, and prepared foods are gaining traction online. These segments benefit from convenience and bulk purchasing, which translates well to delivery.
Retailers that solve fulfillment challenges for perishables stand to capture significant growth.
Demographics and Spending Power Shape Trends
Not all shoppers behave the same.
Higher-income households account for a disproportionate share of online grocery spending and exhibit the fastest growth rates. These consumers prioritize convenience, speed, and premium experiences.
Lower-income shoppers, by contrast, focus on value. They respond to discounts, free delivery, and cost transparency.
This divide forces retailers to segment their strategies. One-size-fits-all ecommerce no longer works.
AI and Social Commerce Push the Next Phase
Looking ahead, technology will define the next wave of online grocery sales.
Artificial intelligence already influences how consumers search, compare, and select products. About 64% of shoppers have used generative AI tools, primarily for research and recommendations.
In parallel, social commerce is gaining traction. Platforms like TikTok and Instagram are evolving into shopping channels, especially among younger consumers.
Even more disruptive is the rise of “agentic” AI—systems that can plan meals, build shopping lists, and complete purchases automatically. While still early, the report warns retailers to prepare now.
Retailers Face a Clear Mandate
The message from the data is blunt.
Online grocery sales are no longer optional; they are the core driver of industry growth. At the same time, physical stores remain essential, but only as part of a broader ecosystem.
Retailers that integrate channels, invest in speed, and adopt emerging technology will lead the market. Those who hesitate will fall behind in a sector moving faster than ever.