Shownotes
This Omni Talk Retail Fast Five segment breaks down the explosive June 2025 e-grocery data from Brick Meets Click and Mercatus, which showed a 28% year-over-year surge to $9.8 billion, with delivery, pickup, and ship-to-home all posting gains of 25% or more.
Chris Walton and Jenn Hahn dig into what's really driving the growth, from the rise of the free delivery era to why time-starved consumers are leaning on online grocery harder than ever. Chris makes the case that regional grocers shouldn't just benchmark against Walmart and Amazon. They should be looking to Sweden, where grocers are making e-grocery profitable despite $35-an-hour starting wages.
They also discuss why Walmart is quietly gobbling up grocery market share, what hard discounters like Aldi are doing right, and why Jenn's 80%+ online grocery habit might be the canary in the coal mine for traditional supermarkets everywhere.
⏩ Tune in for the full episode here: https://youtu.be/k2JviUlR0-Q
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Transcripts
So a couple of notes here.
Speaker A:According to Brick Meets Click, recent Grocery Shopper survey, Delivery sales reached 3.8 billion, up 29% year over year.
Speaker A:Pickup jumped nearly 25% to 4.3 billion, and ship to home surged nearly 33% to 1.7 billion.
Speaker A:Wow.
Speaker A:Yeah.
Speaker A:All three of those jumping over the 25%.
Speaker A:The report attributes a significant share of delivery growth to the rise of what it calls the free delivery era.
Speaker A:That is the membership and subscription programs that effectively eliminate delivery fees as a barrier to adoption.
Speaker A:Meanwhile, in store grocery sales slipped during the month driven by the surge online and a continuing shift in warehouse holds.
Speaker A:Identify as their primary grocery store.
Speaker A: ore share compared to June of: Speaker A:Hard discounters like Aldi also gained roughly 1.5 percentage points in primary store share with while supermarkets lost more than 2 percentage points overall.
Speaker A:Okay, lots of numbers there, Chris.
Speaker B:Yeah, lots of numbers.
Speaker A:Lots of numbers.
Speaker B:Love numbers.
Speaker A:Yes.
Speaker A:So my question to you, the 28% year over year growth in E grocery is staggering.
Speaker A:But what jumps out most to you in this data and what's the single most important thing you think a regional grocer should be doing right now in response?
Speaker B:Okay, so to the second part of that question, I say Jen, I say look to Sweden.
Speaker B:Jen, look to Sweden.
Speaker B:And I'll explain why more in a second.
Speaker B:But before I do that, first, I want to answer the first part of that question, because I think there's a number of things to be gleaned from this data.
Speaker B:Number one, people are supposed to be cash strapped right now.
Speaker B:The macroeconomic times are tough.
Speaker B:Gas prices are high.
Speaker B:So e groceries should be.
Speaker B:E groceries should be a relatively more expensive way for people to get their groceries.
Speaker B:Because even subscription programs, when you get right down to it, those cost money.
Speaker B:They're not.
Speaker B:While they give you free delivery.
Speaker B:Like you said, the free delivery area era, not era area free delivery era.
Speaker B:They're not free.
Speaker B:They cost money.
Speaker B:So that, that tells me that the important thing to remember here is people are really time starved.
Speaker B:They're using this service because they need something that gives them time back in their day and.
Speaker B:And they're just trying to get by.
Speaker B:And so they're kind of almost leveraging up the delivery as kind of a way to just help them get through life and to fund whatever it is they need to fund.
Speaker B:The second point I'd make is ship to home surging the most.
Speaker B:That's pretty important because I wonder how much Amazon's grocery interstitial, you know, before you actually make the purchase, is starting to impact that.
Speaker B:Like, as you go and buy your HDMI cables or whatever, it's pretty palpable that they say, hey, do you want to buy an avocado?
Speaker B:Do you want to buy a banana?
Speaker B:I mean, I almost get hooked into buying bananas every time, Jen, when I see that, like, it definitely arrests you when you're in their app.
Speaker B:And so my hunch is that it's probably impacting this more than we think, as in addition to Walmart actually having the success that we've talked about on the show a lot.
Speaker B:But then finally Sweden.
Speaker B:So I joked about Sweden, and I'm dead serious about it because I was having a good conversation with somebody and I think what the regional grocers need to look at is, like, the examples are out there of, of of grocers in areas that have very tough economic challenges to deal with.
Speaker B:And so Sweden, incredibly high wage rates.
Speaker B:I was talking to the folks at Strong Point and the wage rates in Sweden, the starting wage rate in a grocery store is $35 an hour.
Speaker B:And yet they can make e groceries start to work.
Speaker B:And so, like, that's where I'd be looking.
Speaker B:I'd be going, I'd be.
Speaker B:I'd be.
Speaker B:I'd be saying to my.
Speaker B:My teams, I'd be like, let's benchmark what the heck's going on over there, or hire a consultant to do it for you.
Speaker B:Whatever it is, whatever it takes.
Speaker B:That's.
Speaker B:Those are the markets where I'd be looking very hard to say, what can we learn from them, what can we take?
Speaker B:What can we apply really quickly?
Speaker B:Because if they can make it work, you've got time to figure out how to make this whole thing work.
Speaker A:Yeah, I like that.
Speaker A:I love that it isn't about paying less to the employees that are getting it done.
Speaker A:Right.
Speaker A:It's a.
Speaker A:There's a way to do both.
Speaker A:So I, I guess I didn't realize that I would say look to Sweden, but maybe that's my response as well.
Speaker A:Chris.
Speaker B:Look to Sweden.
Speaker A:Look to Sweden.
Speaker B:Like a Seinfeld episode.
Speaker B:Look to Sweden, Jen.
Speaker A:Yeah, producer Ella.
Speaker A:I feel like we have to have some type of Sweden clip coming out of this.
Speaker A:But anyways, yeah, I mean, what I thought about was if I'm a regional grocery chain, I mean, this seems pretty simple, but it's just that we have to find a way to differentiate our delivery if we're regional from the big players.
Speaker A:Right.
Speaker A:Because at scale, they're going to do it differently and probably better in some ways than the regional players can.
Speaker A:But there has to be a way and I think that has to be very important because we can't rest our laurels on, oh, they're going to keep walking in the store for us because we're local and we're right around the corner because the data is showing something totally different.
Speaker A:So whatever that might be, campaigns marketing around how you're supporting local through E Grocery through even if you're buying online, this is how it impacts.
Speaker A:I don't know what it is.
Speaker A:Right.
Speaker A:But I think there has to be a way to differentiate and continue to look at how can our customers feel something slightly different and better if we're delivering their groceries to their doorstep than Amazon Walmart, you know, the big players.
Speaker A:And I'll, I'll make a comment on your strapped for cash piece, Chris.
Speaker A:Yeah, I agree with you.
Speaker A:Everyone's strapped for time.
Speaker A:I mean, maybe that's always the case, but I certainly hear that from everyone today.
Speaker A:But myself, I do grocery delivery and it saves me money.
Speaker A:Not only saves me time.
Speaker B:Does.
Speaker B:That's the thing.
Speaker B:It does.
Speaker B:It can.
Speaker B:Yeah.
Speaker A:So I think people are catching on to that as well, which is a whole nother situation we need to look at in grocery.
Speaker A:Like those, those purchases that I used to make if I walked in the store, but they weren't on my list.
Speaker A:Like how are.
Speaker A:They're all trying.
Speaker A:Right.
Speaker A:With the ads to get those still in front of me.
Speaker A:But honestly, when we look at our budget month to month, when I get groceries delivered, I hit it every time when I go into a store, I end up with Tupperware and sprinklers and who knows what.
Speaker A:Right.
Speaker A:Candy bars from every section.
Speaker A:So I actually find that I personally save money and time with this and I think the consumers are seeing the same thing.
Speaker B:Yeah, that's a great point, Jen.
Speaker B:That's a really good point.
Speaker B:Yeah.
Speaker B:Because it goes back to what we've talked about with smart carts the whole time too.
Speaker B:Like, you know, the, the tough part about shopping the grocery store is you don't see your bill until the very end unless you're like calculating it all up, you know, as you're shopping, which is very, very hard to do.
Speaker B:Whereas online you get that right away.
Speaker B:You can see what you're spending in relation to your budget and easily remove items, which is hard to do in a grocery store too because you can get, you know, down seven aisles.
Speaker B:You're not going back to put it away necessarily either or, you know, or you could be one of those people and I guess just put it in whatever aisle you want.
Speaker B:But I hope, no hope, I hope no one's doing that because that's just mean for the grocery, for the store associates that are working the store as.
Speaker A:A single consumer ordering that grocery people share lists.
Speaker A:Right.
Speaker A:Or share carts.
Speaker A:But I don't have my kids hanging out of the cart asking for Twinkies.
Speaker A:Right.
Speaker A:I don't have.
Speaker A:There's just not the same consumer behavior online that there is in store.
Speaker A:And so spend wise, I, I'm able to just get what I had on the list.
Speaker A:I'm at my house, I can see if I have sour cream instead of just.
Speaker A:I'll get the sour cream in case I don't have it.
Speaker A:Right.
Speaker A:There's a lot of reasons I've had to make this case to many people that delivery is actually saves me money.
Speaker A:I don't know of everyone but myself, I'm the use case.
Speaker B:That's a good point too because you're bringing up the parent.
Speaker B:No factor.
Speaker B:If you got kids, you don't have to say no.
Speaker B:You just are in total control of it.
Speaker B:And that is what it is.
Speaker B:So Jen, before we, before we move on, I'm curious, so if you are a regional grocer, is this a five alarm fire statistic for you?
Speaker A:I don't think it's surprising.
Speaker A:Are you.
Speaker A:I mean, I, I do think it's, I mean, five alarm fire, that sounds very dramatic.
Speaker A:So I'm, I'm hesitant to say yes.
Speaker B:I know.
Speaker A:I do think it's a must have.
Speaker A:I think there's only one that I'm aware of that has said they're never doing it and that's Trader Joe's.
Speaker A:They're never doing E Commerce.
Speaker A:Right.
Speaker A:But if I'm a regional grocer and I haven't figured out how to do this profitably, which most of them haven't, I would say this is my number one, one of my top focuses.
Speaker A:So one of my five alarm fires, does that make sense?
Speaker B:Yeah.
Speaker B:So yeah, basically you're saying the building's not burning down yet, but you gotta make sure the sprinkler systems are working.
Speaker B:That's kind of how I would take that.
Speaker A:We just have to be taking it seriously, which I think most of them are.
Speaker A:I think they're taking it seriously.
Speaker A:But a way to differentiate, small way to differentiate, get some creativity onto your team instead of just, hey, this is what Walmart does.
Speaker A:We're going to keep doing this.
Speaker A:It's like, how can you differentiate?
Speaker A:Should definitely be important.
Speaker A:I don't think these stats are surprising.
Speaker A:I think we all felt it.
Speaker A:I think they all knew these stats were coming.
Speaker A:So the, the stats necessarily aren't the five alarm fire.
Speaker A:But if you haven't figured out, or if you don't have big plans to figure out delivery, I think it could be a five alarm fire.
Speaker B:The ship to home is what's, is what's growing, you know, and that's, that's, that's people going directly to the retailer to get the groceries they want delivered.