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The 2023 Brick Meets Click/Mercatus 5-Year Grocery Sales Forecast is out this morning, suggesting that "U.S. online grocery sales are forecast to grow at a compound average growth rate (CAGR) of 11.7% over the next five years, increasing online’s share of overall grocery spending from 11.2% in 2022 to 13.6% in 2027 … Persistent price inflation, ongoing concerns about illnesses such as COVID, RSV, and the flu, and a maturing online segment are factors contributing to the outlook."

The forecast continues:

"Total grocery sales, i.e., combined online and in-store sales, excluding the impact of price inflation, are projected to grow at a 2.5% CAGR over the next 5 years, driven by an approximately 1.7% increase in household spending and 0.8% gain in the number of households. An aging population and declining household size are weighing down both measures.

"Persistent grocery-related inflation is expected to continue at a 5-year CAGR of 4.8%, starting from 2022’s rate of 10.9% versus the prior year and tapering down to 2.8% by 2027. The impact of this ongoing price inflation is not evenly distributed. Inflation fuels nearly three-quarters of the projected gains for in-store sales but accounts for less than half of the gains expected for online sales.

"Health concerns drive the demand for online grocery to some degree, and this is likely to continue. Concerns about contracting COVID-19 motivate around 10% of online grocery’s monthly active users (MAUs), according to the October 2022 Brick Meets Click/Mercatus Grocery Shopping Survey. The recent rise of other respiratory illnesses, such as RSV and the seasonal flu, is also motivating customers to shop online for groceries.

"In terms of online grocery segments, Pickup sales are expected to grow at a 5-year nominal CAGR of 13.6% compared to 10.8% for Delivery and 8.0% for Ship-to-Home."

KC's View:

In the immortal words of Fox Mulder, I want to believe.

But I'm not sure.  Perhaps it is because - based on the Amazon news about its raising fees even as it lays off people, closes some facilities and doesn't open planned stores, - I'm not sure Amazon believes … at least, nopt in the kind of growth being projected in this forecast.

Just.  Not.  Sure.