Global Grocery Market Report and Forecast 2024-2032

Global Grocery Market Size

The global grocery market value reached approximately USD 3.87 trillion in 2023. The market is projected to grow at a CAGR of 4.70% between 2024 and 2032, reaching a value of around USD 5.87 trillion by 2032.

Grocery Market Outlook

• As per the survey conducted by Brick Meets Click on 1,704 shoppers in the United States, around 70 per cent of online grocery shoppers used only one digital platform for their purchase.

• As per the industry reports, there are around 12 million grocery stores in India as food and grocery are the leading segments in the retail sector. This is also increasing grocery consumption in India.

• Aldi, Coles, Woolworths, and Metcash are the prominent grocery retailers in the Australian market.

Grocery Market Growth

The rapid expansion of the food and beverage sector, the growing chain of supermarkets and retail stores, and the rising demand for daily household products are some crucial market drivers. A significant percentage of shoppers prefer in-store shopping for food items and household goods as it allows them to inspect the quality of items. Several stores also offer the provision of store discounts and coupons on bulk shopping, which is a rising trend in the grocery market.

Some grocery stores also offer the facility of pre-ordering deli items online, so the consumers do not have to wait in queues. Some grocery retailers are offering the provision of electronic shelf labels which can offer detailed product information upon scanning the QR code.

As per the payment systems provider Ingenico, around 25 per cent of the shoppers use online grocery shopping apps. Additionally, Amazon, in November 2023, announced that  the provision of its online grocery shopping will be available to non-prime customers as well, to compete with the market giants such as Instacart and Walmart.

Recent Developments

In June 2024, Ola, which is a leading Indian ride-hailing company, decided to enter the grocery delivery market via the Open Network for Digital Commerce (ONDC). The company has already captured nearly 30% of the total food orders on the ONDC network. This move can expand Ola’s business and help it to captilise on the growing online delivery grocery market share in India.

Industry Outlook

Rising Consumer Food Spending and Digital Grocery Sales

According to The U.S. Department of Agriculture (USDA) in 2022, consumer food spending patterns varied widely among different countries, reflecting their economic statuses. Nigeria, Kenya, Burma, and Bangladesh had some of the highest shares of total household spending on food, each exceeding 50%. These countries also had relatively low average per-person spending on all goods and services, typically under USD 10,000 annually. This indicates that in lower-income countries, a larger proportion of household budgets is dedicated to food due to limited overall spending capacity, thereby positively impacting grocery industry revenue.

Middle-income countries like Ukraine, Ethiopia, and India had food spending shares around 30-40%, with average total expenditures between USD 5,000 and USD 20,000 per person. This range suggests a transition where economic development allows for more diversified spending, though food remains a significant expense. Moreover, the ongoing development in Indian economy due to rapid population increase can promote the expansion of grocery industry in India.

High-income countries such as the United States, Switzerland, and Australia, with average per-person spending exceeding USD 40,000, had the lowest food spending shares, generally below 15%. In the United States, for example, households spent less than 10% of their budgets on food despite high overall expenditures. This trend underscores how greater wealth enables more spending on non-food items and services, reducing the relative burden of food costs.

In terms of distribution channel, online grocery shopping is the fastest-growing market trend. As per industry articles, in 2023, the digital grocery sales landscape across selected countries underwent significant transformations. China significantly contributed to the growth of the grocery industry in 2023 as sales reached USD 196.3 billion, which were equivalent to 11.2% of its total digital sales. The substantial increase can be attributed to China's rapid adoption of e-commerce platforms, widespread internet usage, and the integration of advanced technologies in the retail sector.

The United States also saw considerable growth in digital grocery sales, which rose to USD 59.5 billion in 2023 from USD 50.9 billion in 2018, representing 3.5% of its total digital sales. This growth reflects the increasing consumer shift towards online grocery shopping, driven by factors such as improved digital infrastructure, greater investment in e-commerce by grocery retailers, and the convenience offered by online shopping platforms.

Japan, the United Kingdom, and South Korea also experienced notable increases in digital grocery sales, which has also increased demand of grocery market. Japan's sales reached USD 46.5 billion, accounting for 9.9% of its digital sales with a CAGR of 7.8%. The United Kingdom's sales grew to USD 22.1 billion, representing 7.9% of its digital sales and a CAGR of 8.7%. South Korea's digital grocery market expanded to USD 21.3 billion, which made up 14.2% of its digital sales. These figures indicate robust growth in regions where digital infrastructure is well-developed and consumers are increasingly turning to online shopping for convenience and variety.

How Does the Global Grocery Market Maintain Consistent Demand and Customer Loyalty?

• Established distribution networks.

• Strong brand loyalty and customer relationships.

• Essential nature of products ensures consistent grocery demand growth.

• Diverse product offerings catering to various consumer needs.

• Integration of advanced technologies for efficient operations.

What Opportunities Exist for Growth and Innovation in the Global Grocery Market?

• Expansion into emerging markets.

• Growth in online grocery shopping and delivery services.

• The potential for strategic partnerships and mergers can provide grocery market opportunities.

• Increasing consumer preference for organic and health-focused products.

• Technological advancements in inventory management and customer engagement.

How Are Economic and Competitive Pressures Affecting the Global Grocery Market Share?

• Economic downturns impacting consumer spending.

• Intense competition from both traditional and online retailers.

• Rapid changes in consumer preferences influences grocery demand forecast.

• Vulnerability to cyberattacks and data breaches.

• Environmental and sustainability challenges affect supply chains.

Thin Profit Margins and High Operational Costs Challenge the Global Grocery Market

• High operational costs, especially in logistics and inventory management.

• Vulnerability to supply chain disruptions.

• Thin profit margins due to intense price competition affect grocery market revenue.

• Difficulty in managing perishable goods.

• Complex regulatory compliance across different regions.

Macro-Economic Indicators Influencing the Global Grocery Market

Gross Domestic Product (GDP) Growth:

• Overall economic health and consumer spending power.

• Impact on retail sales and market expansion.

Inflation Rates:

• Affects pricing strategies, consumer purchasing power, and grocery market dynamics and trends.

• Influence on costs of goods and services.

Unemployment Rates:

• Correlation between consumer spending and disposable income.

• Impact on retail workforce availability.

Interest Rates:

• Cost of borrowing for businesses and consumers.

• Effect on capital investment and consumer credit availability.

Exchange Rates:

• Impact on import and export costs.

• Influence on pricing of international products.

Global Trade Policies:

• Tariffs and trade agreements affecting retail imports and exports in the grocery market.

• Impact of geopolitical tensions on supply chains.

Consumer Confidence Index:

• Measure of consumer sentiment and spending behavior.

• Predictive indicator of retail sales trends.

Government Fiscal Policies:

• Taxation and government spending affect disposable income.

• Influence of stimulus packages on consumer spending.

Micro-Economic Indicators Influencing the Global Grocery Market Expansion

Consumer Demographics:

• Age, income, and lifestyle trends affect purchasing patterns.

• Shifts in consumer preferences and demand.

Market Competition:

• Number of competitors and market share distribution.

• Pricing strategies and competitive dynamics.

Supply Chain Efficiency:

• Logistics, warehousing, and inventory management effectiveness, effectively impact the growth of the grocery market.

• Impact of technological advancements on supply chain optimisation.

Cost of Goods Sold (COGS):

• Raw material and production costs.

• Influence on pricing and profit margins.

Retail Technology Adoption:

• Integration of AI, IoT, and e-commerce platforms.

• Impact on operational efficiency and customer experience.

Consumer Behavior Trends:

• As per grocery industry analysis, consumer behaviour leads to shifts in shopping habits, such as the rise of e-commerce have increased online shopping.

• Impact of health, wellness, and sustainability preferences.

Retailer Financial Health:

• Profitability, liquidity, and investment capabilities.

• Impact on market expansion and innovation.

Brand Loyalty and Customer Relationships:

• Strength of brand equity and customer retention strategies.

• Influence on repeat purchases and market stability.

Key Factors Influencing the Demand in the Grocery Market

• Shifts towards organic and health-conscious products drive demand changes.

• The rise of e-commerce platforms enhances convenience and accessibility for consumers.

• Economic stability and consumer income levels directly influence grocery demand and spending.

• Age distribution, urbanisation, and household sizes affect grocery consumption patterns.

• Fluctuations in food prices impact consumer purchasing decisions and demand elasticity.

Key Strategies Driving Price Competition in the Grocery Market

Discount Retailers:

Aldi and Lidl offer low-priced private-label products, intensifying price competition with traditional supermarkets like Tesco and Sainsbury's.

Promotional Strategies:

Major chains like Walmart and Kroger frequently use promotions, discounts, and loyalty programs to attract price-sensitive customers.

E-commerce Price Wars:

Online grocery platforms like Amazon Fresh and Ocado compete in grocery market by offering competitive prices and convenience, challenging brick-and-mortar stores.

Private Label Brands:

Retailers such as Carrefour and Asda enhance price competition by expanding their private label product lines, offering cost-effective alternatives to national brands.

Price Matching Policies:

Chains like Target implement price matching policies to retain customers who might otherwise be lured by competitors' lower prices.

Grocery Industry Segmentation

“Grocery Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Product Type

• Packaged Food 

• Unpackaged Food 

• Drinks 

• Tobacco 

• Household Products 

• Others 

Market Breakup by Distribution Channel

• Hypermarkets/Supermarkets

• Convenience Stores 

• Online Channels 

• Others 

Market Breakup by Region

• North America

• Europe

• Asia Pacific

• Latin America

• Middle East and Africa

Grocery Market Regional Analysis

Based on region, the market is divided into North America, Europe, Asia Pacific, Latin America, and Middle East and Africa. The APAC region is expected to witness an increased demand for grocery items due to the rapid growth of population, growing demand for packaged food products due to busy lifestyles, a rise in urbanisation, and the burgeoning popularity of online grocery retailers.

Competitive Landscape

The market players are increasing their innovative product offerings to gain a competitive edge in the market

• Nestlé S.A. 

• The Procter & Gamble Company 

• Unilever plc 

• The Coca-Cola Company 

• PepsiCo, Inc. 

• MONDELEZ INTERNATIONAL INC. 

• Danone SA 

• General Mills Inc. 

• Kraft Heinz Co. 

• Kellanova 

• Others

Key Highlights of the Report

Grocery Market Report Snapshots

Grocery Market Size

Grocery Market Growth

Grocery Companies

Grocery Market Regional Analysis