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The company鈥檚 core grocery delivery business growth slowed as food prices soared, which drove many consumers to look for opportunities to save, including pulling back on grocery delivery. The strategy: Instacart sought to push past those challenges by growing its higher-margin advertising and technology businesses.

The grocery question: Amazon鈥檚 decision to pull the plug on Amazon Fresh store openings underscores the difficulties the retailer has had in the physical grocery space. While the retailer hoped the convenience of its Just Walk Out tech would win it loyal shoppers, the stores offer a 鈥渟oulless shopping experience,鈥� per Winsight Grocery Business editor-in-chief Heather Lalley.

A large percentage of consumers reported making unplanned purchases of clothing (35%), groceries/food (30%), and household items (29%), according to an April 2022 survey from Slickdeals. Retailers should make sure the right impulse-purchase items are stocked around pickup counters. The pickup location should also be a point-of-sale.

Discount chain Aldi is partnering with Instacart to deploy the grocery intermediary鈥檚 Connected Stores solution. Here鈥檚 how it works:. In-Store mode on the Instacart app enables customers to see what鈥檚 in-stock, sort items by aisle, and access in-store promotions and discounts.

Local officials, including Arizona鈥檚 attorney general, are scrutinizing the impact consolidation will have on grocery competition. Kroger and Albertsons together account for nearly half of Arizona鈥檚 grocery sales.

Walmart鈥檚 click-and-collect program could also help drive holiday sales, particularly when it comes to grocery. 鈥淲hen you look at what鈥檚 going to be driving digital grocery growth over the next couple of years, a lot of it is coming from sales growth and click and collect, not delivery.

Walmart is the top destination for groceries, Target for apparel and shoes. Amazon鈥檚 recent inroads into grocery have not yet disrupted Walmart鈥檚 position as the nation鈥檚 No. 1 grocer. Last year, 77% of Walmart+ Weekend shoppers bought groceries, more than doubling Target and quadrupling Amazon in the category for their respective events.

Thrive Market, which specializes in organic, healthy groceries, launched its retail media network with Instacart. Instacart鈥檚 Carrot Ads solution will enable brands to run sponsored product and display ads on Thrive Market鈥檚 website and app. Self-service tools help brands set up and manage their campaigns, with optimized bidding options to drive specific business goals.

Aldi will deploy Instacart鈥檚 Carrot Tags in-store as part of its expanded partnership with the grocery intermediary. Whole Foods, Amazon Fresh stores, and Midwestern grocery chain Schnucks also use digital shelf tags, according to NPR. Digital shelf tags are also attracting the attention of the US government.

The big takeaway: While grocery prices are nearly flat, shoppers are increasingly focused on value. That provided an opportunity for Aldi, Walmart, and others to steal share from Kroger.

While price and discounts play a huge role in grocery purchases, ease and convenience are even more important, according to February data from Pymnts.com. But retailers can鈥檛 just count on one or the other to bring in customers.

Nothing can compare to the sky-high growth of 2020, but Instacart has managed to achieve double-digit grocery sales growth over the past two years, a trend we expect will continue into 2024. Though still a small fraction of total grocery sales, we predict Instacart鈥檚 share will grow from 1.9% in 2020 to 2.7% by 2024. 2. The battle for market share is on.

The big picture: Ad revenues are key to Instacart鈥檚 growth as fierce competition from DoorDash, Uber, and grocers themselves erodes its share of the intermediate grocery delivery market.

Behind the numbers: As has been the case for the last several quarters, the retailer鈥檚 better-than-expected results were powered by the strength of its grocery and ecommerce segments. Walmart continued to gain grocery share in Q3, which along with growth in the health and beauty category helped offset a decline in general merchandise sales.

That feeling is due to Trader Joe鈥檚 dedication to what it believes makes a good customer experience, which is slightly different than other grocery stores.

For example, Amazon and Walmart may look like grocery competitors, but Walmart鈥檚 grocery business tends to skew toward fresh foods while Amazon skews toward pantry goods. That means that even though the two companies compete on a macro level, they may not be competing for the same consumer at the same time.

More than eight in 10 (83%) US grocery shoppers consider the price when picking a grocery store, per January 2024 data by Progressive Grocer. What it means: Amid growing price sensitivity, grocery retailers can build brand loyalty by offering personalized discounts on items that their customers already buy. 3. Not all deals are created equal.

Grocery TV鈥檚 analysis showed a 14% average sales lift for CPG brands using its in-store network. Our take: Smart carts, endless aisle screens, and scan-and-shop tech bring digital ads into physical stores, tapping into the 80% of sales that happen offline.

How we got here: Consumers turned to quick-service restaurants for a speedy, inexpensive meal in the wake of rising grocery prices in 2021 and 2022. But as grocery price growth has fallen back to nearly 1%, fast-food prices continued to rise. Fast-food prices rose nearly 28% from 2019 to 2023, per the US Commerce Department. Those higher prices pushed some consumers away and led others to cut back.

It doesn鈥檛 offer free same-day shipping on grocery orders, and it no longer offers click and collect as a fulfillment option for grocery. Its membership is driven almost entirely by in-store shopping and has remained popular amid the digital disruption in retail. Costco鈥檚 success also underscores the value of a strong private label brand.

The shifting retail landscape: Adobe鈥檚 report found that shoppers chose cheaper products across a number of categories, including personal care, electronics, apparel, furniture, and grocery.

Our analysts were divided on Aldi鈥檚 ability to put a dent in Walmart鈥檚 grocery business, with analyst Suzy Davidkhanian saying Aldi doesn鈥檛 have the footprint or variety to compete with Walmart. 鈥淚t's like a one-trip-wonder kind of activity versus Aldi, which only has 驳谤辞肠别谤颈别蝉,鈥� she said. 3. Wayfair.

Meeting customers鈥� grocery needs: While Amazon has a significant grocery business, Jassy acknowledged the company has yet to find the right scalable model. It recognizes the need to expand its physical footprint, given that the vast majority of grocery sales occur offline. (Our US Grocery Retail Ecommerce Sales forecast suggests 88% of sales will be offline this year.).

Inflation鈥檚 impact: While QSRs benefited in 2022 and early 2023 from rising grocery prices driving shoppers to look for an affordable meal, the landscape changed over the past year as grocery prices stabilized and restaurant prices continued to rise. That led a sizable segment of consumers鈥攑articularly those who are lower-income鈥攖o pull back. Economic vibes influence consumer spending patterns.

Clothing is the most popular category for online purchases鈥攁nd second only to grocery products for in-store purchases, according to our September 2023 survey of 1,447 US consumers. Apparel, footwear, and accessories sales remain robust. A significant majority of consumers made a clothing purchase in the previous six months.