Fed Policies That Drag On Retail Could Be eGrocery’s Gain, Report Suggests
New government policies liable to drag down retail growth could be to the benefit of online grocers, with U.S. online grocery sales expected to outpace brick-and-mortar by 5.2x through 2029, according to a new report from ecommerce data and consulting firm Brick Meets Click.
According to the group’s U.S. Grocery Sales 5-Year Forecast report, released today, online grocery sales are projected to achieve a CAGR of 8.9% between 2025 and 2029, compared to just 1.7% for traditional retail. That includes pickup, delivery and ship-to-home services.
In 2024, online grocery sales grew 9% year-over-year, with higher promo rates in the second half of the year helping fuel the expansion. That “surge,” the firm said, is keeping pace so far in 2025.
By 2029, the forecast anticipates ecommerce will account for 17% of all U.S. grocery sales.
Fueling that prediction are the disruptive new policies of the Donald Trump Administration, with tariffs, cuts to supplemental nutrition assistance programs (SNAP) on the federal and state levels, and the ironfist targeting of immigrants all expected to be a drag on retail grocery growth, Brick Meets Click suggested in a press release.
“Grocery retail has always been a dynamic business, but the rate of change over the last five-plus years has disrupted shopping patterns, especially for delivery and value formats, like Walmart, and that disruption is not disappearing anytime soon,” said Brick Meets Click partner David Bishop in the release.
The federal government’s “more restrictive immigration policy” is expected to result in slower sales growth, the report claims, noting that Trump’s first term led immigration to decrease at a 9% CAGR between 2017 and 2019.
Assuming a similar rate during this presidential term, Brick Meets Click expects a 54-basis point drag on grocery sales growth through 2028.
The administration’s tariff-driven trade policy is also adding to uncertainty, but has been harder to predict due to the on-again, off-again nature of the tariffs, not to mention legal challenges to Trump’s authority to even impose new tariffs on goods. Regardless, Brick Meets Click’s forecast anticipates grocery-related inflation “to run between 2.7% and 1.2% through 2029.”
Pending legislation for state and federal SNAP cuts which “threaten to reduce payments” and restrict the kinds of products that can be purchased “will likely trigger further changes in what, where, and how much is purchased,” the firm stated.
“Grocery retail has always been a dynamic business, but the rate of change over the last five plus years has disrupted shopping patterns, especially for Delivery and value formats, like Walmart, and that disruption is not disappearing anytime soon,” said Bishop in the release.
