According to a study conducted by international grocery research firm, IGD, the US grocery market is set to be worth as much as $1.722trn by 2022, with the strongest sector growth to come in the online sphere.
Whilst the US grocery market is expected to have a compound annual growth rate (CAGR) of 3.6% over the next five years, the online channel is expected to grow much more rapidly, with a forecasted CAGR of 18.1% over the same period.
“The online channel is developing at pace in the US and although many leading retailers have operated online for over 20 years, it is only in the last three years where we have seen an acceleration of investment and activity,” said Stewart Samuel, IGD’s North American Program Director.
“In the next five years, the online grocery channel will grow by $20bn and will be the main driver of growth in the US grocery market."
Stewart cites three key factors that he believes will underpin this growth: free or low-cost collection options being offered, the rise of delivery meal kit services, and retailers partnering with third party companies that will provide access to the online market for relatively low capital investment.
“A key area for retailers to focus on is to make online shopping as convenient as possible, with a particular emphasis on making it easier to order frequently purchased products,” Stewart continues.
“New technologies also have an important role to play in this space, with voice-based ordering set to revolutionise how products are ordered.”
IGD’s study also reveals that discounters are expected to prosper the most of any companies operating within the market, with IGD predicting a 7.6% CAGR for these firms, compared to the 3.0% forecast for supermarkets.