Online grocers are growing at a much faster rate than traditional brick-and-mortar grocers, according to a new report.
According to the report from Kantar Worldpanel, total worldwide sales of fast-moving consumer goods grew only at a rate of 1.6 percent in the past fiscal year, compared to a 15 percent growth in online grocery sales.
Of the total worldwide grocery market, online sales now make up 4.4 percent of that pie, which equals out to a total of $48 billion. The report predicted that, by 2025, that number will have climbed to 9 percent of overall sales for a total of $150 billion.
“With new entrants, such as Amazon, expanding rapidly, the industry is facing a shakeup,” Stéphane Roger, global shopper and retail director at Kantar Worldpanel, said in a statement.
In the U.S. alone, online grocery sales are expected to jump 157 percent in 2016 as online grocery delivery options, like AmazonFresh, Peapod and numerous other competitors, continue to flood the market.
The study found that online grocery sales in the U.S. currently remain a relatively small portion of the market but found the highest percentage of share in South Korea, at 16.6 percent, followed by Japan at 7.2 percent, the U.K. at 6.9 percent, France at 5.3 percent and Taiwan at 5.2 percent.
In the U.S., online grocery sales only account for about 1.4 percent of the current market.
“Although online sales have the potential to cannibalize in-store sales, it is vital that retailers act quickly to develop a strong eCommerce presence,” Roger believes. “The retailer that goes online first in each market can enjoy a far higher market share.”