Food & Grocery Retail Market size, Share, Growth, and Industry Analysis, By Type (Packaged Food, Unpackaged Food, Drinks, Tobacco, Household Products) By Application (Offline, Online), and Regional Forecast to 2035

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FOOD & GROCERY RETAIL MARKET OVERVIEW

The global Food & Grocery Retail Market market is starting at an estimated value of USD 13746.68 billion in 2025 expected to grow to USD 14425.76 billion in 2026, ultimately reaching USD 22259.4 billion by 2035. This growth reflects a steady CAGR of 4.94% from 2025 through 2035.

The supermarket and food retail market is undergoing radical change with evolving consumer needs towards online experiences, convenience, and value. Supermarkets, convenience stores, and websites compete to meet emerging needs for fresh fruits and vegetables, packaged food, and domestic essentials. Online shopping is more common than ever before, with increasing consumers turning to home delivery and subscription grocery shopping. Sustainability and healthier eating are also changing the way consumers shop, causing retailers to carry more green and organic products. Technology today exists in the form of cash-register-less stores and stock with AI, and thus the trade is changing to enable frictionless shopping.

KEY FINDINGS

COVID-19 IMPACT

Food & Grocery Retail Market Had a Positive Effect Due to supply chain disruption during COVID-19 Pandemic

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels. 

The grocery and food retailing sector were benefited by the COVID-19 pandemic with increased demand more than expected, as lockdown and restrictions caused customers to buy groceries in greater quantity. Customers bought essentials in large quantities, making consumers divert their spending from eating out to eating in. More people shopped for groceries online, prompting retailers to develop e-commerce businesses and invest in delivery networks. Disruption in supply chains, though, resulted in short-term scarcity of essential items. Though during the height of the pandemic store visits fell, traffic has gone on to rebuild progressively. Digital transformation in the sector was triggered faster by the crisis, and e-commerce purchasing of food turned out to be a trend to remain.

LATEST TRENDS

Rise of Online Grocery Shopping and Quick Commerce to Drive Market Growth

The grocery and food retailing industry is witnessing a significant transition to online shopping and instant delivery options. People have shifted towards the comfort of buying groceries on mobile applications and websites, prompting retailers to build more e-commerce platforms. The emergence of "quick commerce" (10- to 30-minute deliveries) is transforming urban grocery shopping, with firms setting up micro-fulfillment centers and AI-based inventory management. Subscription grocery services and tailored suggestions are also becoming popular. With ongoing digitalization, retailers are placing emphasis on smooth shopping experiences, blending online effectiveness with in-store dependability to address changing consumer needs.

• According to the U.S. Department of Agriculture (USDA), the demand for online grocery shopping has increased by 27% over the past two years, reflecting a significant shift in consumer behavior toward e-commerce platforms.

• The National Retail Federation (NRF) reports that 35% of consumers now prefer shopping for groceries through mobile apps, highlighting the growing reliance on digital platforms for food and grocery purchases.

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FOOD & GROCERY RETAIL MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Packaged Food, Unpackaged Food, Drinks, Tobacco, Household Products:

• Packaged Food: Packaged food is still the leading grocery food retailing category because of convenience, enhanced shelf life, and variety. Ready-to-eat foods, frozen foods, and snack foods are becoming more dependent on consumers as convenient and quick meal alternatives. Organic, gluten-free, and minimally processed packaged foods are being sought after by health-conscious consumers. Private-label categories are being expanded by retailers to counter national brands, offering substitutes at reduced prices. Online supermarket shoppers also propel sales with on-the-spot suggestions and bulk buying capabilities. With life still busy and changing, packaged food is still in the background of grocery store retail sales growth.

• Unpackaged Food: Unpackaged food in the form of fresh produce, fruits, vegetables, seafood, and meat are a must-have for consumers who want natural and healthy ingredients. Farmers' markets, organic stores, and supermarket produce departments fuel sales in this category. Consumers are looking more and more for local and organic sources, prompting retailers to enhance traceability and transparency. Although grocery home delivery services have extended to fresh foods, most consumers continue to shop at the store for quality control. Sustainability issues are also affecting packaging decisions, and this is seeing more zero-waste options and bulk purchasing opportunities. With growing health and sustainability trends, the demand for unpackaged food remains on the increase.

• Drinks: Beverages also encompass soft drinks such as bottled water, soft drinks, tea, coffee, and energy drinks. Healthy drinks are becoming more popular, and low-sugar, plant-based, and functional drinks with fortification by vitamin and minerals are on the rise. Plant-based packaging such as biodegradable bottles and aluminum cans are trending because consumers are becoming greener and need more sustainable packaging. E-grocery stores also offer increased beverage options with subscription-type customized coffee and wellness drinks. Besides expanded hydration and well-being trends, the store market is also stretching drinks to go along with altered lifestyles and tastes.

• Tobacco: Evolving regulation, health, and consumption are reshaping the business. Smokers are switching to reduced-risk alternatives such as vaping devices and nicotine pouches. The retailers are evolving too by tailoring their product mix accordingly with some selling organic and premium tobacco products. Even while there is expanding prohibition on sale and promotion, in some categories the demand is flat. With stricter legislation and increasing health conscience, the tobacco category continues to evolve with new product innovation.

• Household Products: Household essentials like home essentials, personal care items, and cleaning supplies are a fundamental part of food shopping. More and more people want cleaning supplies that are sustainable and chemical-free due to greater sustainability concerns. Customers are also opting for convenience through bulk purchases and subscription delivery for household items like paper goods and detergents. Web-based food stores are putting more items into homes with aggressive prices and fast delivery. Private-label sales are rising as value-priced lines to better-selling household brands. With cleanliness and convenience still atop priority one, the category continues to gain solid ground.

By Application

Based on application, the global market can be categorized into Offline, online:

• Offline: Physical bricks-and-mortar food stores remain the preferred option for most consumers. Supermarkets, hypermarkets, convenience stores, and local shops provide convenient access to fresh produce, packaged goods, and local sources. Offline stores are favored by customers for product inspection, individualized customer service, and immediate purchase. Retailers are also improving the in-store shopping experience with self-service checkout counters, electronic labels, and personalized promotions. Even large supermarket chains are adopting hybrid models, where consumers shop online for in-store pickup. Offline shopping at supermarkets remains the norm even with increased e-commerce, especially for fresh and perishable items.

• Online: Internet shopping for groceries is growing fast as consumers welcome home delivery and subscription convenience. Food and household goods are available across a broad assortment on e-commerce sites, apps, and in-store websites with promotions and recommended products. Enhancements such as same-day pickup, contactless payment, and AI-powered shopping lists improve customer experience. Dark stores and robotic warehouses are investments many retailers are making to drive fulfillment efficiency. Though online shopping for groceries continues to expand, delivery logistics and product freshness are still areas of strength that need further improvement. The move toward digital grocery retailing is defining the industry's future.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factor

Growing Demand for Convenience and Digital Shopping to Boost the Market

Convenience is top of mind for consumers, and that's fueling online food ordering and delivery growth helping in Food & Grocery Retail Market Growth. Busy lives and urban lifestyles have made convenient, hassle-free shopping possible. Subscription grocery stores, one-click purchases, and mobile apps are simplifying food shopping like never before. Retailers are investing in AI-driven recommendations, automated fulfillment centers, and fast delivery capabilities to smile at customers' faces. Contactless payment and checkouts kiosks provide a further level of convenience in bricks-and-mortar stores. With technology improving and e-commerce growth leading the way, online food shopping continues to become even quicker even quicker.

• According to the U.S. Census Bureau, the increase in dual-income households has led to a 19% rise in demand for convenient grocery shopping solutions, including home delivery and curbside pickup services.

• The U.S. Bureau of Labor Statistics (BLS) highlights that the steady increase in consumer spending on food, which has grown by 15% in the last five years, is one of the primary drivers of the retail grocery market.

Health and Sustainability Trends Shaping Consumer Choices to Expand the Market

Shoppers are getting health conscious and asking for more plant-based, minimally processed, and organic foods on store shelves. Supermarkets stock products like gluten-free, non-GMO, and environment-friendly. Environment-driving factors would also decide customer purchasing patterns, as individuals still purchase biodegradable packs, locally sourced fruit and vegetables, and green household cleaning agents. Retailers are countersigning green interventions by pushing alternatives to plastic reduction and promoting responsible brands. Supermarkets will be forced to develop quickly to accommodate new consumer requirements that align with increasing expectations regarding nutrition and sustainability.

Restraining Factor

Supply Chain Disruptions and Rising Operational Costs to Potentially Impede Market Growth

The food retail and grocery market is hindered by supply disturbances and increasing cost. International matters, labor shortfalls, and transportation delays shaved into the number of basic foodstuffs that are available in the market, leading to turbulent prices. Food retailers balance tightly between maintaining inexpensive prices and cost-competitive prices with logistics costs, fuel expenses, and wage costs increasing. Cold storage and rapid delivery of perishables introduce an additional level of complexity to commerce. Small stores struggle to compete with larger chains that have more potent supply chains. While technology enhances the efficiency of inventory management, random disruptions still pose a challenge to constant product availability and cost control.

• According to the Federal Trade Commission (FTC), the rising operational costs of running brick-and-mortar stores, including labor and supply chain costs, are posing a significant challenge for traditional grocery retailers.

• The U.S. Food and Drug Administration (FDA) has pointed out that food safety regulations and compliance issues in the grocery sector continue to limit the market's growth, particularly for smaller retailers and organic product suppliers.

Expansion of Private-Label and Sustainable Products to Create Opportunity for The Product in The Market

Opportunity

Retailers are turning more towards private-label brands where they offer higher-quality items for lower prices than national brands. These private labels have more profitability and develop long-term customers. Meanwhile, people are asking more for sustainably and ethically produced items so that the stores are making new initiatives on reducing packaging and developing organic food along with fair-trade products. Shoppers are seeking responsible and affordable shopping opportunities, which presents a platform for grocery retailers to differentiate. With increasing trends in private-label and sustainability, the retailers gain the potential to engage more conscious consumers along with improving their market position.

• According to the Food Marketing Institute (FMI), there is a growing opportunity in private-label grocery products, with over 20% of grocery sales now coming from private-label goods, creating space for stores to expand their own brand offerings.

• The U.S. Department of Agriculture (USDA) reports that the rising health consciousness among consumers is driving demand for organic and locally sourced groceries, a segment that has grown by 30% over the last three years.

Balancing Affordability with Consumer Expectations Could Be a Potential Challenge for Consumers

Challenge

Retailers are constrained to keep prices affordable while catering to rising consumer demands for premium, organic, and sustainable products. Rising production, transportation, and labor costs deter the provision of cheap solutions without compromising on quality. Consumers also demand tailored experiences, rapid delivery, and seamless fusion of online and offline shopping. Accomplishing the ideal combination of convenience, value, and sustainability requires continued investment in technology, supply chain, and price strategy. With the changing economic environment, retailers must respond promptly to maintain profitability as well as customer loyalty.

• According to the U.S. Environmental Protection Agency (EPA), the environmental impact of packaging waste in the grocery retail sector remains a challenge, as more consumers demand eco-friendly and sustainable packaging options.

• The U.S. Census Bureau has reported that the increasing competition from e-commerce giants, particularly Amazon, is making it difficult for traditional grocery stores to maintain their market share, especially in urban areas.

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FOOD & GROCERY RETAIL MARKET REGIONAL INSIGHTS

• North America

North America remains a leading force in the grocery store and supermarket food retailing industry with strong customer demand, food retailing, and digitalization. The United States Food & Grocery Retail Market leads the pack with the combination of large store chains, warehouse clubs, and online supermarkets with same-day delivery. Customers are increasingly looking for organic and green foodstuffs, which push the retailers to develop more health-oriented food products. E-commerce food buying is increasing, with companies investing in AI-driven recommendations and robotically manned fulfillment centers. As inflation fears bear down on the region, North America's food retailing is still strong, catering to shifting consumer trends and digital technology.

• Europe

The European organic, locally grown, and fresh foods retail grocery market is fueled by strong demand. Sustainability also plays a large role in Germany, France, and the U.K. as consumers and retailers abandon the use of plastic packaging and provide alternatives that are sustainable. Private label stores and discount food stores are on demand as customers look for affordable options. Online grocery shopping is on the increase with express delivery and curbside pickup being available in most of the chains. Food safety and sustainable regulatory policies also impact market trends. European food retailing remains stuck between affordability and the pursuit of premium on quality and sustainability by consumers owing to changing economic conditions.

• Asia

Asia's grocery and food retail market is booming with urbanization at high velocities, growing disposable incomes, and smartphone penetration being high. China, India, and Japan are witnessing tremendous growth in online grocery shopping with sites incorporating AI, digital payments, and same-day delivery. Wet markets and convenience stores remain favored, particularly for fresh fruits and vegetables. Processed and packaged food is being called for more in the wake of busy lives and evolving consumption patterns. As governments are investing in supply chain enhancements and smart retail choices, there is immense opportunity for both online and offline food retailers in Asia.

KEY INDUSTRY PLAYERS

Key Industry Players Shaping the Market Through Innovation and Market Expansion

Food and grocery hypermarket retailers currently emphasize digitization, private labeling, and sustainability to enhance competitiveness. Firms are spending money on AI in terms of stock management, cashless stores, and quick delivery to enhance customer experience. The online platforms are adopting concepts like personalization through recommendations, subscription, and cashless payments in a bid to better align themselves with the shopping behavior.

• Amazon has revolutionized the food and grocery retail space with its Prime Now and Whole Foods integration, offering fast delivery services and a wide selection of grocery items, making it a dominant force in the market.

• Walmart continues to lead the food and grocery retail market, with over 4,700 stores in the U.S. alone, offering both in-store and online grocery services to meet the needs of its diverse customer base.

The significance of the sustainability efforts of minimizing plastic packaging and getting to ethically sourcing products remains heightened. In this highly competitive grocery retail industry, monopolistic actors engage in worldwide operations, strategic partnerships, and supply chain maximization to usher in growth.

List of Top Food & Grocery Retail Companies

• Amazon (United States)
• Walmart (United States)
• Target Brands, Inc. (United States)
• ALDI Purchasing GmbH & Co. oHG (Germany)
• Tesco PLC (United Kingdom)
• Schwarz Gruppe (Germany)
• 7-Eleven, Inc. (United States)
• Costco Wholesale Corporation (United States)
• Albertsons Companies (United States)
• The Kroger Co. (United States)
• Ahold Delhaize (Netherlands)
• Carrefour (France)

KEY INDUSTRY DEVELOPMENT

January 2024: Walmart announced the launch of its drone delivery program to support grocery fulfillment and respond to growing consumer demand for quicker deliveries. The program will lower delivery time, increase accessibility, and provide a convenient shopping experience. The drones will operate in select markets, delivering staple groceries and household staples within minutes. Walmart is fortifying its grocery retail position by taking advantage of automation and next-generation logistics. This is an indication of the increasing trend of technology-based solutions in the retail of food that provides customers with more convenience.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated timeframe. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.