Promotions and Shifting Consumer Preferences Drive 19% Year Over Year Growth in the eGrocery Market

The U.S. online grocery market concluded 2024 with a strong performance, reaching $9.6 billion in sales for December a remarkable 19% year-over-year (YOY) increase.

This milestone reflects the fifth consecutive month of sales exceeding $9.5 billion, bolstered by consistent growth across all fulfillment methods and strategic membership promotions, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey conducted on December 30-31, 2024.

The surge in sales during the latter half of the year highlights the critical role of aggressive promotional strategies.

Memberships and subscriptions offered discounts ranging from 33% to 80%, igniting a 17.7% YOY growth in eGrocery sales in the second half of 2024.

These promotions began in mid May and persisted intermittently, drawing in both new and returning customers.

“While subscriptions and memberships aren’t new, the deep discounts were new, and they resonated with customers by offering the opportunity for significant savings.”

David Bishop, partner at Brick Meets Click

This approach not only increased order frequency but also enhanced customer engagement and loyalty, as providers gained a larger share of grocery spending.

The success of these initiatives is evident in the annual sales data.

Although eGrocery sales saw minimal growth of 0.3% in the first half of 2024 compared to the same period in 2023, the second half delivered a significant rebound with a 17.7% YOY increase, driving total annual growth to 9%.

In December alone, delivery services led the way with $4.0 billion in sales, marking a 24.6% YOY increase and accounting for 41.7% of total eGrocery sales.

Ship to home services experienced the most dramatic growth, with sales jumping 40% YOY to $1.8 billion, representing an 18.9% market share.

Meanwhile, pickup services saw a modest 5.3% YOY growth, reaching $3.8 billion and contributing 39.4% to the monthly total.

Mass retailers continued to outperform traditional grocery operators, capturing over 50% of monthly active users (MAUs) in December, compared to 33% for grocery operators.

The trend of cross-shopping between grocery and mass retail intensified, further challenging grocers to retain customer loyalty in an increasingly competitive market.

“By leveraging AI driven personalization and integrated loyalty solutions, grocers can convert occasional shoppers into loyal digital customers, driving repeat orders and larger baskets across both online and in store channels, to fuel sustained growth.”

Mark Fairhurst, Chief Growth Marketing Officer at Mercatus

As the eGrocery sector prepares for 2025, value driven strategies and digital innovation will be pivotal for growth.

Grocery retailers are encouraged to focus on enhancing customer experiences and leveraging analytics to stay ahead in the evolving marketplace.