Online Grocery Sales Will Near $500B by 2028, FMI Report Says

Why It Matters

The forecast signals that digital grocery is no longer optional—retailers must master omnichannel fulfillment to protect growth and margins as in‑store sales lag behind.

Key Takeaways

• Online grocery projected $452B in 2028, 11.6% CAGR.
• Omnichannel shoppers now 94% of grocery customers.
• Delivery accounts for ~80% of e‑commerce orders, pressuring margins.
• Small online baskets limit retailer profitability versus in‑store stock‑up trips.
• Amazon and mass merchandisers hold 61% of online grocery market.

Pulse Analysis

The FMI and NielsenIQ outlook places online grocery on a trajectory that dwarfs traditional store growth, with sales expected to climb to $452 billion by 2028. This surge reflects a broader shift toward digital convenience, as 94% of shoppers now blend online and offline channels. While in‑store sales are projected to grow at a modest 0.62% CAGR, e‑commerce’s 11.6% pace underscores the urgency for grocers to embed digital capabilities into their core strategy, or risk losing relevance in an increasingly fragmented market.

Yet the path to capturing this growth is fraught with operational challenges. Delivery now represents roughly 80% of online grocery orders, a model that strains margins due to third‑party logistics costs and the need for rapid fulfillment. Moreover, consumers tend to place smaller baskets online—only 16% of digital trips qualify as stock‑up visits—limiting average order values compared with in‑store shopping. These dynamics favor large players like Walmart and Amazon, whose scale and proprietary delivery networks enable faster, cheaper service, further squeezing conventional grocers.

To stay competitive, retailers are doubling down on omnichannel integration and technology. Mobile apps that fuse loyalty programs with digital coupons are already boosting engagement, while AI‑driven product recommendations promise to expand basket sizes by surfacing relevant items at checkout. Retail media networks and streamlined mobile checkout experiences also help differentiate brands. As AI adoption climbs—64% of consumers have tried generative tools—grocers that leverage these insights to personalize the digital shelf will be better positioned to convert browsers into higher‑value shoppers and sustain growth in the evolving grocery landscape.