TORONTO — Online grocery sales are projected to reach $250 billion by 2025, according to new research from  Mercatus and Incisiv. That would be a more than 60% increase over pre-pandemic estimates and would represent 21.5% of total grocery sales.

That projection is among the findings in “eGrocery’s New Reality: The Pandemic’s Lasting Impact on U.S. Grocery Shopping Behavior,” a survey of nearly 60,000 American shoppers.

Source: Mercatus

“This comprehensive survey proves that COVID-19 has fundamentally changed the way shoppers approach their grocery options – so much so that we now expect to see online sales reach an unprecedented $250 billion by 2025,” said Mercatus president and CEO Sylvain Perrier. “The growth of online grocery in 2020 and its predicted long-term impact, coupled with customers’ continued loyalty to brick and mortar, make it clear that these avenues must complement each other in creating a great customer experience across a grocer’s entire brand. In order to round out the loyalty to online channels, this data makes it clear that brands should make investments in digital functionality, especially regarding product search, discovery and product information.”

A summary of the report is available here.

Online grocery’s growth has rapidly accelerated during the pandemic with 43% of shoppers having shopped online in the last six months compared to 24% just two years ago, according to the report. The top three reasons shoppers have shifted to online shopping are COVID-19 concerns (62%), convenience (62%) and time savings (42%). Additionally, 66% of all respondents who shop online rate real-time inventory visibility as very important. Compared to brick and mortar, there is far less loyalty for pure-play online retailers with only 8% of shoppers switching to an online-only operator such as Amazon.

The report also found a shift in the demographics of online grocery shoppers. People aged 45 and older have made the most dramatic shifts to online shopping with 46% adopting a new fulfillment method (e.g. curbside) and 35% ordering groceries online for the first time. Grocery retail brands have an opportunity to retain these new online customers, provided the experience matches up with shopper expectations.