Online grocery sales jump 15.5% as in-store food sales slide 2.8%

A widening split in the grocery aisle

American grocery spending is moving in two directions at once. Circana's latest U.S. CPG Demand Signals report found that online food and beverage sales rose 15.5% year over year in the four weeks ending Oct. 4. Sales through physical stores fell 2.8% over the same stretch, and total sector sales slipped by just under 1%.21 The overall decline matters most here. Online growth is no longer lifting the whole category. It is pulling a larger share out of a pie that has stopped growing. Circana said strong digital gains could not make up for weaker sales at brick-and-mortar and convenience stores.27

Coverage of the report mostly agrees on these numbers, but outlets read the timing differently. The Independent tied the online surge to the start of holiday shopping and cited Adobe's forecast that about $1 of every $4 in fourth-quarter retail sales happens online.27 It also described the measurement window as Sept. 28 to Oct. 4, a single week. Grocery Dive and Circana's own framing describe a four-week period.2127 The seasonal explanation also fits the data poorly. Brick Meets Click's surveys show that online grocery growth has run above 20% for eight straight quarters.2 Holiday shopping may add to the gap, but it did not create it.

Delivery is doing the heavy lifting

Brick Meets Click's third-quarter figures fill in the picture. The firm found that U.S. online grocery sales rose 20.7% from a year earlier and reached a record 20.9% of total grocery spending, while in-store sales for the quarter fell.2 Delivery grew more than 30% and accounted for about three-quarters of the overall increase. Pickup grew only in the mid-single digits and lost share to delivery.2 Grocery Dive's summary of the data matches those figures.21

This shift inside the online channel may matter as much as the online-versus-store split. Pickup still needs a trip to the store's parking lot, so it keeps the shopper close to the store. Delivery takes the trip away entirely. In a June analysis, Brick Meets Click said two newer services, ultra-fast delivery and same-day ship-to-home of fresh groceries, were reducing the need for quick trips to physical stores.7 It estimated that same-day orders made up nearly 80% of delivery orders in the first quarter, and that orders filled within an hour or less made up 18%.7 Digital Commerce 360 reported that delivery windows as short as 30 minutes were driving the growth.10

The habit is also spreading and deepening. In September, nearly 64% of U.S. households bought groceries online in the month, a record. Order frequency rose almost 14% in the quarter, and 17% of monthly users tried delivery, pickup and ship-to-home within the same month.2 About 81% of households have now bought groceries online at least once.5 Brick Meets Click also found that shoppers' stated intent to reuse a delivery or pickup service within 30 days has risen from 56% in 2024 to 62% this year.2

One data point suggests the pace may be easing. Brick Meets Click said online sales grew just over 16% in September, down from nearly 25% in August. The firm still called that momentum strong.1 That September figure is close to Circana's 15.5%, which suggests the two firms see similar trends despite different methods.

Traditional grocers grow online but stall overall

Earnings from traditional supermarket chains show the same pattern. Kroger reported flat comparable-store sales in its latest quarter while its digital business grew 20%. Ahold Delhaize's U.S. comparable sales rose less than 1% while its e-commerce grew more than 14%. Albertsons posted negative same-store sales alongside 11% digital growth.21 Each of these chains is winning online and still failing to grow overall. That suggests much of their digital growth comes from their own in-store shoppers switching channels, not from new spending.

At the same time, the biggest online players are taking a growing share. Brick Meets Click estimated in June that Walmart was nearing 40% of U.S. online grocery sales, helped by delivery within an hour.7 Amazon gained share by adding fresh groceries to its same-day network.10 Reported figures show Walmart's store-fulfilled delivery grew 43% in its most recent quarter, and Amazon says it now offers same-day perishable delivery in 2,300 U.S. cities.11 Brick Meets Click partner David Bishop has framed the key question for traditional and regional grocers as how to grow and stay relevant without giving up margin or customer experience.10

Circana's spending data explain some of the in-store weakness. Shoppers are cutting waste, trimming extras without trading down on quality, and balancing price tiers, pack sizes and store brands. Private-label sales rose slightly while national brands fell about 1%.21 Perishables, which have long drawn people into stores, declined. Circana singled out produce, which has struggled since this summer's cyclospora outbreak.2129 Packaged categories such as snacks, beverages and shelf-stable meals grew.21 Store traffic depends on fresh food, so weakness in produce hurts stores more than it hurts online channels.

The convenience premium and the $17 billion bet

The online shift raises a cost puzzle. One commentary noted that about two-thirds of Americans call groceries unaffordable, yet many pay markups approaching 40% on third-party apps.28 A price comparison cited by the Daily Mail found an Instacart basket cost 32% more than the store price once taxes and fees were included.14 Brick Meets Click's Bishop said some newer services focus on speed while others try to help shoppers avoid overpaying.2 That split suggests price-conscious shoppers are sorting themselves among services, often toward membership programs from the big retailers, rather than giving up on delivery.

That backdrop helps explain DoorDash's agreement to buy Instacart for about $17 billion, or $65 a share, at least three-quarters in cash.1619 DoorDash says it will keep the Instacart brand and app. Members now paying $9.99 a month for both DashPass and Instacart+ would pay a single fee, and Instacart users would get access to about 50,000 more stores.15 DoorDash CEO Tony Xu presented the deal as a way to give retailers of every size a chance to compete with the largest companies, which he said have pulled ahead by investing in technology and fast delivery.15

Coverage of the deal largely agrees on the logic but splits on the risks. A Morningstar analyst said restaurant delivery is maturing and that growth now lies in more frequent, higher-value orders such as weekly grocery shops.16 GlobalData's Neil Saunders argued that competition from Walmart and Amazon makes fee increases unlikely.14 He also raised concerns about regional grocers depending more on a single e-commerce provider.12 A Forbes analysis said the combined company would account for roughly 77% of U.S. delivery-platform spending. It added that critics put its share of third-party grocery delivery near 60%.19 Wedbush analysts said antitrust risk could depend on whether regulators define the market as all grocery sales or only delivery platforms.20 The deal is not expected to close until late 2027 or early 2028.15

The two sides would compete more than cooperate on any regulatory market definition. Walmart is the largest U.S. grocer with 21% of spending, according to Numerator, while Costco and Amazon each hold 8%.15 Among delivery platforms, Instacart's share has fallen from 26% to 18% over five years as DoorDash's has grown from 44% to 59%.15 Measured against all grocery, the merger looks like a response to Walmart. Measured against third-party delivery, it looks like consolidation.

What it adds up to

The evidence supports a firm conclusion. The split between online and in-store sales is structural, not seasonal, and delivery is driving it. Market-size estimates vary widely: Brick Meets Click puts 2025 U.S. online grocery sales at about $127 to $130 billion, while broader definitions place the market at $200 to $330 billion or more.2314 Even so, the direction is the same across Circana, Brick Meets Click and grocers' own earnings. Online is gaining share, and stores are losing it in a market that is barely growing.

For regional supermarkets, the online growth they report is mostly protecting business they already have. Whether to build their own delivery or rent it from a platform used to be a tactical choice. With the leading marketplaces merging, it is becoming a strategic one. One commentary warned that grocers who outsource their digital storefronts risk giving up customer data, loyalty and retail-media revenue, much as hotels did to online travel agencies.28 Others argue that the platforms are the only realistic way for smaller chains to match Walmart's and Amazon's speed.15 Regulators reviewing the DoorDash-Instacart deal will effectively decide which of those views wins out.