The Year in Grocery Trends: 5 Essential Lessons for Grocers in 2025

One trend from the year in groceries stands above all others in shaping the industry.

While this article explores five transformative shifts that defined 2024—and connects each to valuable insights—it’s impossible not to begin with the one that redefined customer expectations and reshaped the eGrocery sector.

At first glance, it may seem like a simple discount. But the reality is far more complex. This strategy, deployed by the industry’s largest players, drove customer loyalty, heightened competitive pressures, and propelled online grocery sales to record heights.

The trend? Discounted annual memberships and subscriptions to free grocery delivery service.

These programs not only lowered the cost of delivery but also solidified year-long commitments, encouraged frequent orders, and captured a greater share of repeat online customer orders. 

For shoppers, the benefits were undeniable across segments: convenience at an appealing price.

For the grocery industry, however, the benefits were more one-sided.

While total eGrocery sales surged to levels not seen since online shopping’s peak during the pandemic, much of the growth landed squarely in the hands of the industry leaders implementing this approach—Walmart, Instacart, Amazon, and other national retailers.

This left many regional grocers facing a critical challenge: how to compete for customer loyalty and drive repeat online purchases at the same scale as industry giants leveraging discounted delivery memberships.

Beyond Delivery: Grocery Industry Lessons from 2024

Although delivery discounts defined the year, they were far from the only story.

The industry also experienced the growing prominence of retail media, an intensified focus on personalization, the fight to maintain control over customer experience, and the continued march of mass retailers like Walmart in claiming market dominance.

These grocery trends offer critical lessons for regional grocers seeking to retain loyal customers and carve out their place in an increasingly competitive market. 

By understanding these shifts and their implications, grocers can position themselves to better compete in 2025 and increase digital commerce sales in the years to come.

Delivery Discounts Reshaped Online Grocery Shopping

It’s no accident this article begins with home delivery discounts—they had the largest impact on the grocery industry in 2024.

Deep discounts on subscription programs tied to reduced or free delivery fees became a defining trend, with the industry's largest retailers and third-party delivery providers leveraging these promotions to attract and retain shoppers.

These programs didn’t just offer savings; they tapped into customer psychology, making shoppers feel as though they were walking away with more money in their pocket. 

Walmart has extended this concept even further by explicitly highlighting rollbacks, manufacturer coupons, and Walmart Cash earned at checkout. This approach reinforces the perception of value and leaves customers with a tangible sense of savings. 

This psychology encourages frequent orders—“keep saving more”—and builds long-term loyalty—“we’re transparent about your savings.” As a result, the biggest players set a new standard for the market—one that smaller grocers found difficult to match.

That’s because competing on price alone isn’t realistic for most grocers. The scale of these large retailers allows them to offer discounts that smaller players simply can’t replicate.

However, there are ways to compete effectively. By focusing on unique strengths, such as personalized service, community ties, and cost-effective alternatives like pickup, grocers can carve out a competitive edge that resonates with their customers.

To maximize these advantages and leverage customer psychology, grocers must not only provide value but also effectively communicate it. Customers won’t perceive that they’re saving unless they’re shown that it’s happening.

How Grocers Can Compete in the Age of Delivery Discounts

1. Explore Subscription-based Models to Build Loyalty

By targeting annual plans, the big players not only encouraged greater loyalty, they locked in customers for a year, giving themselves a full 12 months to establish delivery as a habitual shopping behavior. 

Grocers can launch their own subscription programs tailored to their strengths, such as free or discounted pickup, exclusive promotions, or access to local grocery products. These memberships encourage frequent purchases and foster loyalty by emphasizing unique benefits that larger retailers struggle to replicate. Grocers should also focus on retention strategies to maintain memberships beyond the first year, where retention rates are projected to stabilize at around 30-40%.

2. Differentiate Through Pickup Services

While delivery offers unmatched convenience by eliminating the need for store trips, it also poses a challenge for regional grocers. That’s because delivery disintermediates their unique in-store advantages—such as fresh, local products and high-touch service—shifting customer focus to convenience alone.

This is all the more reason for grocers to enhance their pickup services by making them faster, frictionless, and bundled with subscription perks or promotions. Highlighting the affordability, immediacy, and customer control of pickup—alongside its alignment with nearby locations—positions it as a smarter choice over delivery. 

3. Leverage Local Expertise and In-store Experiences

Regional grocers have a competitive edge in their connection to local communities. Personalized promotions, exclusive in-store events, and locally sourced products can create a unique grocery shopping experience that larger retailers cannot easily replicate. Combining these with tailored digital interactions reinforces customer loyalty and trust.

4. Shift Focus from Third-party Platforms to First-party Solutions

To maintain control over customer relationships, grocers should prioritize first-party platforms for online orders. Offering free pickup, exclusive perks, or loyalty rewards encourages shoppers to shift from third-party delivery services, allowing grocers to retain valuable data and build stronger customer connections.

5. Maximize the Psychological Power of Discounts

Consumers respond strongly to perceived savings, as evidenced by the success of delivery subscriptions. Grocers can harness this psychology by offering time-sensitive promotions or small, targeted discounts that emphasize value without undermining margins. Clear communication about these offers enhances perceived value, helps build trust, and encourages repeat purchases.

Learn more about delivering customer convenience while managing your cost-to-serve.

Retail Media Emerged as a Revenue Lifeline

Walmart’s ability to offer deep subscription discounts and reduced delivery fees isn’t just about scale—it’s about strategy.

One key component? Retail media.

By turning its eCommerce platform into a robust advertising channel for the food industry, Walmart generated significant profits, offsetting the cost of its discounts while funding investments in technology and customer acquisition. 

This made retail media one of the most important trends of the year.

Retail media works by monetizing digital real estate, allowing consumer packaged goods (CPG) brands to advertise directly to customers at the point of purchase.

From targeted ads to sponsored product placements, these campaigns reach shoppers when they’re ready to buy. For CPG partner brands, the opportunity to connect with highly engaged shoppers is worth paying for, creating a profitable cycle of ad income and business growth for Walmart.

But this plan doesn't just work for Walmart.

Retail media offers smaller grocers a rare opportunity to access an additional revenue stream. The strong community ties and localized audiences that local grocers possess are incredibly valuable to advertisers and especially appealing to CPG brands seeking targeted, engaged audiences.

How Regional Grocers Can Leverage Retail Media

Highlighting these loyal and engaged customers gives brands a compelling reason to advertise on your platform, offering a level of personalization that larger networks often lack.

Here’s a five-step approach for regional grocers to build an effective retail media strategy:

1: Evaluate eCommerce Traffic and Order Data

Start by analyzing your website and mobile app traffic to identify the best ad placements and opportunities for engagement. Understanding consumer behavior at every touchpoint ensures ads are strategically placed for maximum effectiveness.

2: Select the Right Retail Media Platform

Choose a solution that aligns with your operational capacity and allows for scalable growth. A platform that supports both in-house and external ad management ensures flexibility and efficiency as your network matures.

3: Optimize for Mobile and Web Traffic

Mobile usage dominates eCommerce, so ensuring your retail media network is fully optimized for mobile devices is critical. Ads should seamlessly adapt to web and mobile environments to capture maximum impressions.

4: Build In-House Expertise

Train a team to manage ad placements, create tailored campaigns, and maintain strong CPG brand relationships. This hands-on approach allows grocers to deliver better results for both advertisers and customers.

5: Track and Improve Performance
Monitor metrics such as click-through rates (CTR) and return on ad spend (ROAS) to continually refine your strategy. By analyzing the performance data collected, you can generate insights that will ensure your retail media network delivers consistent value to advertisers.

As we alluded to when talking about Walmart, retail media represents a win-win-win scenario: a new revenue stream for grocers, a valuable advertising channel for CPG partner brands, and a better shopping experience for consumers.

Discover how you can use retail media to create a sustainable revenue generator for your grocery business.

Retaining Control of Customer Experience Became Essential

One of the clearest trends from this past year is based on the importance of maintaining control over the customer experience.

While third-party platforms like Instacart and DoorDash helped some grocers drive immediate sales by leveraging aggressive delivery discounts to attract increased spending from consumers, they also created dependencies that undermine long-term growth.

By relying on third-party services, grocery retailers cede control over critical aspects of their business—most notably customer data and the quality of the shopping experience. This means sacrificing the ability to personalize offers, target promotions, and build stronger relationships with shoppers. It also creates a risk of “short-term addiction,” as grocers grow dependent on platforms that prioritize their own goals over a grocery retailer's long-term profitability.

In contrast, first-party services allow grocery stores to control the end-to-end customer experience. This includes leveraging data for personalized interactions, creating consistent omnichannel experiences, and maintaining direct relationships with shoppers.

For grocery retailers, reclaiming this control is vital to fostering customer loyalty, reducing reliance on external platforms, and building a more sustainable business model.

How Grocers Can Take Control of the Customer Experience

1. Build First-party eCommerce and Fulfillment Services

Developing proprietary online shopping and fulfillment solutions is key to reclaiming control. By building a system for unified commerce, grocers can:

• Deliver seamless omnichannel experiences that connect digital channels with in-store shopping.
• Use customer data to create personalized offers and product recommendations.
• Improve order accuracy, reduce costs, and enhance convenience through better integration of services like pickup.

2. Shift Away from Third-party Platforms Gradually

While third-party partnerships can provide short-term benefits, grocers should aim to reduce dependency over time.

First-party solutions allow grocery retailers to gradually wean shoppers off these platforms by offering exclusive incentives, such as loyalty rewards and discounted fees for in-house services. This can be done by promoting first-party services through targeted campaigns, communicating a lower price or no fees for pickup, and offering other deals exclusively for app users.

Gradually shifting customer demand to proprietary platforms enables grocers to retain more control, reduce costs, and build a stronger foundation for sustainable growth.

3. Leverage Customer Data for Personalization

One of the biggest advantages of first-party platforms over third-party services is the access they provide to customer data.

This data is essential for creating personalized experiences that foster loyalty and deepen customer relationships. While the next section will explore personalization in detail, it’s important to note that first-party platforms allow grocery retailers to:

• Segment Shoppers: Identify shopping behaviors and preferences to deliver tailored offers.
• Personalize Promotions: Use purchase history to recommend discounts, products, and rewards that resonate with individual consumers.
• Target Engagement: Send timely and relevant campaigns through email, SMS, or app notifications to encourage repeat purchases and build loyalty.

By focusing on these strategies, grocers can reclaim control over the customer journey, ensure the quality of the shopping experience, and build stronger, more personalized relationships with their customers.

Click here to put your first-party eCommerce strategy into action.

Personalization is Now a Competitive Necessity

To truly own the customer experience, grocers must embrace personalization as a core strategy.

As competition intensified this past year, the ability to tailor shopping experiences to individual consumers became the most cost-effective means for grocers to retain loyalty.

It's important to note here that the type of personalization we're discussing here is about more than marketing—it’s about anticipating customer needs, reducing friction in their shopping journey, and delivering value and convenience. Modern consumers expect their shopping experiences across all retail sectors to be seamless, "made-for-me," and responsive to their preferences.

For grocers, this shouldn't be looked at as an obligation. Instead, think of it as an opportunity to deepen relationships, foster loyalty, and compete effectively against larger retailers. Advances in machine learning and artificial intelligence have leveled the playing field, making personalization scalable and effective for smaller grocers to implement.

By unifying customer data and leveraging predictive analytics, grocers can deliver targeted recommendations, timely offers, and tailored promotions that resonate with individual consumers.

In this sense, personalization allows regional grocers to bridge their traditional strengths—community connections and personal service—with the digital experiences consumers now demand.

How Grocers Can Implement Personalization

1. Unify and Leverage Customer Data

As we mentioned in the previous section on customer experience, the foundation of personalization lies in data.

Grocers must integrate customer transaction histories, loyalty data, and online behaviors into a single, unified view to:

• Understand Preferences: Identify shopping patterns and product preferences.
• Target Effectively: Deliver tailored promotions and recommendations.
• Create Relevant Offers: Use informational insights to offer personalized discounts, rewards, and communications.

Unifying data enables grocers to predict what shoppers want before they ask, creating a more proactive and satisfying experience.

2. Deliver Predictive Personalization

Once data is unified, predictive personalization helps grocers act on those insights.

Advanced algorithms analyze purchase cycles, shopping behaviors, and past interactions to provide customers with the right message and the right offer at the right time. For example:

• Remind Shoppers: Send notifications for frequently purchased products before customers run out.
• Tailor Offers: Provide personalized discounts based on items a customer regularly buys.
• Simplify the Journey: Generate curated shopping lists or recommendations to streamline decision-making.

Together, this allows grocers to offer their customers content with context. The technology now exists to make this even easier for the grocer through advanced personalization features such as:

• Personalized Widgets: Tailor the experience with widgets upon user sign-in, featuring relevant offers and promotions.
• Shopper Marketing Content: Drive revenue by promoting sponsored content and products.
• Dynamic Product Collections: Showcase curated product collections through end cap widgets for easy discovery.
• Localized Offers: Create store-specific blocks and banners that highlight local promotions and content.
• Quick Navigation: Add shortcuts to popular sections of the shopping experience, enhancing ease of use.

Predictive personalization reduces effort for shoppers, and the practical application of technology advancements makes providing it easier for shoppers. The result is more convenience and loyalty for both: customers will return because the grocer has shown that they understand their specific needs.

3. Modernize Loyalty Programs

Traditional loyalty programs—with nominative benefits—often fall short of modern customer expectations.

To remain relevant, grocers must evolve these programs into personalized, dynamic systems that:

• Offer Targeted Rewards: Base incentives on individual shopping habits to increase engagement.
• Encourage Larger Purchases: Reward behaviors like consolidated orders or repeat visits.
• Seamlessly Integrate: Connect loyalty systems across digital and in-store channels for a cohesive unified commerce experience.

By focusing on relevance and ease of use, modern loyalty plans create a cycle of customer retention: strengthening current relationships and providing more data to further enhance personalization efforts.

One of the many reasons why this level of personalization is so important for grocers in particular is that it extends their traditional strengths—such as high-level, high-touch, personalized service—into the digital space. It transforms shopping from a transactional activity into a relationship-building opportunity, meeting the modern consumer’s expectations for value and convenience.

However, seamless execution is critical. Even minor technical issues, like app glitches or inaccessible promotions, can frustrate customers and damage loyalty. That’s why grocers must invest in user-friendly platforms to ensure a positive customer experience across multiple channels.

Learn how you can engage and retain customers with data-driven personalization.

Walmart’s Dominance Created New Priorities for Grocers

In 2024, Walmart extended its dominance in the grocery industry, setting new benchmarks for customer loyalty, fulfillment options, and omnichannel shopping experiences.

While its ability to offer consistently low grocery prices remains central to its appeal, Walmart’s success stems from more than just affordability and immense resources—it’s about strategic execution. By combining convenience, personalized experiences, and diversified offerings (from enhanced fulfillment options to electronic shelf labels), Walmart captured a broader demographic while expanding its market share.

For grocers, the challenge is clear: adapt to meet these rising expectations or risk losing customers.

That doesn’t mean trying to out-Walmart Walmart in terms of resources. It means learning and leaning:

• Learn from the big retailer's strategies; and
• Lean into your own strengths—community connections, personalized service, and fresh, local offerings.

We’ve already touched on how Walmart reinforces customer savings by explicitly showing the money saved or the Walmart Cash earned at checkout—a powerful way to build trust and loyalty. Smaller grocers can adopt a similar approach by calculating and highlighting cart-level savings, too. 

It’s about being aware of what Walmart is doing. And adapting it to fit your specific needs and strengths as a regional grocer.

That’s how you create unique and memorable customer experiences that even the biggest retailer on the planet can't match.

Five Lessons Grocers Can Learn from Walmart

1. Promote Pickup to Counter Delivery Discounts

Walmart’s delivery discounts were instrumental in increasing overall eGrocery sales this year, but grocers should focus on the more affordable alternative: pickup.

By waiving fees, offering lower prices on pickup, or bundling perks into subscription plans, grocers can position pickup as the cost-effective, convenient choice, aligning with their strengths in personal service and local convenience.

2. Streamline Fulfillment

Rather than trying to replicate Walmart’s broad fulfillment options, grocers can refine, optimize, and promote their pickup operations.

Strategies like efficient in-store picking lead to faster order completion and reduced errors that enhance customer satisfaction while keeping costs low—building on pickup’s potential as previously highlighted.

3. Use Data for Personalization

Personalization is critical for building stronger customer loyalty, as highlighted earlier.

Walmart’s success demonstrates the power of leveraging customer data to create value-filled personalized experiences. Grocers can achieve similar results by unifying data from loyalty and subscription plans alongside transaction histories.

This unified view enables tailored recommendations, customized digital coupons, timely offers, and targeted promotions, turning customer insights into actionable strategies that attract customers and retain their business.

4. Promote Private Label Offerings

Walmart has shown how private labels can balance value and quality to build loyalty.

Grocers can take this further by focusing on private label products at a lower price that emphasize local sourcing, organic options, or specialty items.

In this sense, private label growth offers grocers a chance to enhance margins and simultaneously meet evolving customer expectations. By promoting private labels prominently in-store and online, grocers can position these products as cost-effective, high-quality alternatives to national brands.

This not only improves profitability but also drives customer loyalty, making private label offerings a key point of differentiation for smaller grocery retailers.

5. Deliver Seamless Omnichannel Experiences

Walmart excels at unifying online, mobile, and in-person shopping.

Grocers can achieve this by collecting and consolidating customer data to offer personalized promotions, flexible fulfillment, and integrated loyalty plans. This strategy, as previously outlined, creates a cohesive experience that encourages repeat visits and enhances the lifetime value of customers.

By focusing on these areas, grocers can adapt Walmart’s strategies to their own strengths, ensuring they remain competitive while retaining their local identity.

Discover how you can build a best-in-class omnichannel experience that brings the traditional strengths of your grocery business into a digital customer experience.

Partner with Mercatus for a Successful 2025

The trends that shaped 2024 have made one thing abundantly clear: grocers can no longer rely on traditional approaches to compete in an industry increasingly defined by innovation, scale, and rising consumer expectations.

Delivery discounts redefined value, retail media created new revenue streams, and personalization became a cornerstone of customer loyalty. Each of the trends we’ve discussed represents both a challenge and an opportunity for grocers ready to evolve.

The goal isn’t to outspend or outscale the industry’s largest players—it’s to amplify what makes your business unique. By leveraging your local expertise, high-touch service, and commitment to fresh, quality offerings, you can deliver an experience that no one else can replicate, especially in the digital realm.

At Mercatus, we help grocers take these lessons and transform them into actionable strategies. But more than that, we provide the tools and insights to help you stand out. With our all-in-one eCommerce solutions, you’ll gain full control over:

• Fulfillment options
• Loyalty programs
• Retail media connections
• Customer data
• Personalization tools
• The entire customer experience

With Mercatus, you can strengthen customer loyalty, increase profitability, and turn the challenges of 2024 into growth opportunities in 2025.

Now is the time to act. Don’t let the lessons from the past year pass you by.

Reach out to our sales team today—and discover how our tailored solutions can help you compete more effectively, build stronger customer connections, and position your grocery business for long-term success.