BOSTON, Sept. 3, 2019 /PRNewswire/ -- Store-based sales will continue to account for the majority of worldwide edible grocery sales over the next five years, but online sales are poised to grow much faster as leading retailers continue to prioritize ecommerce by expanding their online assortment and fulfillment options, according to analysts at ecommerce insights company Edge by Ascential.
The Food & Beverage Sector Report reveals that the $2.8 trillion global edible grocery sector is projected to experience an online CAGR of 13% through 2024 – increasing total online sales to $162 billion by the end of the forecast period.
Amazon and Walmart, by far the largest edible grocery retailers in the world, will continue to go head-to-head in the race for global leadership. Amazon will grow its food ecommerce sales from $8 billion to $15 by 2024, while Walmart increases its share of the market from $6 billion to $14 billion. Individually, these figures will be more than twice as high as their nearest rival, Costco.
"We're going to see a major shift to online and omnichannel over the next few years with edible grocery," said Violetta Volovich, Associate Analyst and report author for Edge by Ascential. "The barriers to adoption and growth in this sector are coming down, and retailers are investing heavily in technology, supply chain and partnerships that will make for an easy, seamless customer experience."
While ecommerce continues to be the fastest-growing channel, the online shift of edible grocery (comprising food and beverage) has been relatively slow when compared to other categories. Approximately 3% of modern edible grocery sales currently are online, whereas the cross-category average within the global chain retail universe is about 20%, with some ecommerce-driven categories, such as electronics, approaching 50% in total online sales.
But grocers are investing in rapid digital transformation, as more than 82% of global online grocery sales are projected to come from omnichannel retail formats by 2024. About 15% will come via Pureplay, and 3% via 3P Marketplaces.
New online-to-offline strategies that facilitate the flow of products and services include leveraging store networks for click-and-collect capabilities and introducing more in-store automation to provide consumers with a more frictionless shopping experience.
To curb investment in complex supply chains that come with delivery services, and to continuously attract shoppers to physical stores, many retailers are investing in fast, store-based fulfillment or teaming up with third parties for improved last-mile logistics. Fulfillment intermediaries are becoming influencers for product discovery and brand selection, and are enabling ecommerce operations for low-cost formats such as discounters, which would otherwise not sell groceries online.
The findings are drawn from Edge by Ascential's Retail Market Monitor, which analyses how individual sectors are currently performing and how they are forecast to grow by 2024. The food & beverage category comprises ambient groceries, fresh groceries, carbonated drinks, fruit drinks, water, hot beverages, beers, wines and spirits.
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SOURCE Edge by Ascential