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Digital grocery sales are growing again across Western Europe as inflation forces higher spending, click and collect gains momentum, and mobile loyalty schemes come to the fore. 鈥�

Fifty-eight percent of US households are 鈥渆xtremely concerned鈥� about inflation: While grocery price growth has normalized, the rapid increases over the past few years continue to influence shopping behaviors.

Grocery spending under pressure: So far, the increases have largely been modest鈥攁 reflection of the fact that many companies are working through inventory they brought in either before the tariffs took effect or during their extended pause. But one area where consumers have been unable to escape the immediate effects of Trump鈥檚 economic policies is the grocery aisle.

Despite uneven adoption, AI is already proving to be a powerful force in grocery. Here鈥檚 how it鈥檚 being used today鈥攁nd where it鈥檚 headed next. AI today: Currently, 93% of grocery C-suite leaders believe AI will be a necessity to compete in the future, up from 81% in 2023, according to Grocery Doppio survey data.

As the digital grocery landscape grows more crowded, retailers must meet consumers' expectations around product selection, mobile app features, and fulfillment. 鈥淒igital grocery is no longer an emerging category,鈥� said our analyst Blake Droesch. 鈥淚t鈥檚 grown really fast over the last couple of years, and the market is pretty mature at this point.鈥� Here are three ways retailers can stay competitive, according to our Digital Grocery Opportunity report.

FTC scores another antitrust victory after judge blocks Kroger-Albertsons merger: The deal would reduce grocery competition and raise prices for shoppers, the court decided.

A more direct path: As an online-only supermarket, Ocado owns about 15% of the UK鈥檚 online grocery space but just 2.5% of the total grocery market.That means Ocado must think differently than its larger competitors.

Grocery is set to become the largest US ecommerce category by 2026.

While the company has yet to decide exactly how the brands will be divided, the current plan is to spin off most of its grocery business (excluding its sauces and spreads) into an entity worth as much as $20 billion. Bigger isn鈥檛 always better: Despite bringing together a wide array of beloved grocery brands, the Kraft Heinz mega-merger has delivered lackluster results.

In this deck鈥攐ne of seven in the series鈥攚e cover our latest ecommerce forecasts for grocery. This deck covers:. Our grocery ecommerce forecast as of Q4 2024, including breakdowns by category, sales channel, and company. This deck can help you:. Develop commerce strategy (brands and retailers). Benchmark commerce performance (brands and retailers). Develop go-to-market strategy (vendors).

Worse, many shoppers are holding grudges about price increases, particularly against grocery, restaurants, and clothing/shoes/accessories brands. 鈥淭here is a lot of emotion wrapped up in a lot of these brands,鈥� said Tassin, 鈥渆specially those that we interact with in our day-to-day lives.鈥�.

Grocery and value proposition remain core strengths. Walmart's grocery business accounts for approximately 40% of its success, according to Wolff, serving as the primary driver that brings customers into stores and creates opportunities for additional purchases.

In November, retailers made strategic moves across grocery, apparel, and beauty. Amazon turned Black Friday into a weeklong event and launched its Shein competitor, Haul. Meanwhile, e.l.f. Beauty strengthened its value proposition through a new Dollar General partnership, while Kroger announced plans for specialized Asian experience stores in North Texas. Here are our eight unofficial picks for the most interesting retailers in November.

Integrations into its loyalty program, gamified quests, location-based coupons, and aisle-aware advertising formats, match consumers鈥� requests for retailers. 55% of customers find gamification opportunities extremely/very important in their grocery loyalty programs, per a May 2024 survey from Lobyco. And 62% of customers have used a digital offer to save on groceries within the last month.

Savvy shoppers: Gen Zers shop and buy groceries on mobile more than other generations, and they鈥檙e happy to take suggestions from influencers. Clicking is faster than going to a store: 17% of consumers under age 28 ordered their most recent grocery buys on Amazon/Whole Foods, per PYMNTS. Only 6% of millennials, the next highest cohort, did the same.

A novel rewards structure: Cardholders can get 10 Fetch points per dollar spent on grocery and retail and 5 points per dollar on all other categories. Beyond that, Fetch offers additional engagement-based rewards. App use. Cardholders can earn points by engaging with the Fetch app: scanning receipts, playing games, and shopping through Fetch鈥檚 platform. Spin & Win.

How food companies are responding: The largest grocery chains aren鈥檛 yet sounding the alarm over GLP-1 users buying fewer items. The lack of concern could be because most of these players鈥攊ncluding Walmart, Costco, Kroger, and Albertsons鈥攁lso operate pharmacies. So any spending decline for groceries could be offset by more customers picking up GLP-1 prescriptions.

That far outpaces the broader grocery sector, where traffic rose just 1.8% YoY. The three grocers are also poised to benefit as shoppers scrutinize labels more closely, thanks to earlier commitments to avoid artificial dyes as well as a broad selection of healthier and organic products.

New categories include dining, groceries, and gas divisions. Behind the strategy: Southwest is following the formula from Chase鈥檚 recent Sapphire Reserve refresh鈥攈iking annual fees and deepening the bench of perks. Incorporating everyday spend categories of groceries and gas reflects Southwest's pitch to be consumers鈥� primary card across small- and high-value transactions.

Walmart鈥檚 store brands 鈥渙utperformed鈥� in Q1, CFO John David Rainey said on the company鈥檚 earnings call鈥攑articularly in the grocery sector, where penetration rose 60 basis points YoY. Its premium Bettergoods label is a resounding success story.

Older adults (60-plus) prefer grocery, gas/auto, dining, and garden-related rewards. High-income consumers (those who own more than $250,000) overindex on travel rewards. Among first-time reward users, 72.4% are drawn to grocery-related offers, making these an ideal entry point for program adoption. Read the full report. This was originally featured in the 蘑菇AV Daily newsletter.