Online grocery continues to grow faster than the wider retail industry, reshaping how retailers design fulfilment networks, allocate capital, and manage cost structures.  

Expectations around speed and convenience are rising, delivery demand is accelerating, and omnichannel shoppers have become grocers’ most valuable customers. Yet the economics of online grocery remain challenging.  

Retailers are now prioritising profitability as the next phase of ecommerce maturity, redesigning fulfilment models and investing in store-based capabilities to make online growth sustainable. 

Tightening economics driven by rising delivery demand

Online grocery has become a core shopping habit rather than an occasional alternative. Over the past year, monthly ecommerce sales in the US repeatedly hit new highs, with growth often exceeding 30% year-on-year. 

Delivery has become the dominant fulfilment method, with delivered orders now representing almost two thirds of online grocery missions (Source: McKinsey data). At the same time, shoppers expect faster delivery windows and full assortment availability, placing additional pressure on retailers to balance speed, cost, and breadth of choice.

Image source: Walmart

This acceleration in demand is forcing retailers to confront the economics of fulfilment more directly. Some retailers have already reached online profitability.

Walmart announced:

we achieved ecommerce profitability, both in the U.S. as well as for the global enterprise in Q1 for the first time.

(Q1 fiscal 2026 earnings release)

Ahold Delhaize stated that:

we have already reached ecommerce profitability for 2025, on a fully allocated basis.

(H1 2025 results) 

Others expect to reach profitability soon. Kroger forecasts US$400 million in ecommerce operating profit in 2026, helping it to “establish a clear path to profitability” (FY25 earnings release). For many other retailers, particularly regional operators, the road to profitability is still on the horizon. 

Stores becoming the backbone of fulfilment 

As online demand grows, North American retailers are converging on a store first fulfilment model. Stores offer proximity to demand, lower capital intensity, and greater flexibility than large automated facilities. They are increasingly being used as localised fulfilment hubs, with orders picked directly from shelves and prepared for pickup or delivery. 

A reassessment of centralised fulfilment centres is also driving this shift. Several retailers have scaled back or paused large automated CFC projects. In late 2025/early 2026, Kroger closed three Ocado‑powered sites and has cancelled plans for new ones. In Canada, Sobeys pressed pause on its Vancouver facility and announced plans to close its Calgary site (Jan ’26). Sobeys will continue operating its Toronto and Montreal CFCs, but the Calgary closure underscores how retailers are rebalancing towards store‑led fulfilment models that offer lower risk and faster payback. 

Instead, retailers are retrofitting stores with automation or integrating micro fulfilment centres into large formats. Kroger has said it will continue to work with Ocado, embedding its technology within its own facilities, which feels like the obvious way forward for others partnering with the technology specialist. 

Walmart’s Accelerated Pickup and Delivery (APD) centres illustrate this evolution. These automated backroom facilities use robotics to sort, store, and retrieve items, enabling same day and sub-three-hour delivery. They also cut handling costs by around 20%.  

Amazon’s hybrid Whole Foods concept includes a 10,000 square foot micro fulfilment centre that uses robotics and AI to reduce costs and improve efficiency.

Manual in store picking remains the dominant US model, but it is reaching its limits. As online penetration rises, retailers are increasingly blending stores, dark stores, automation, and third-party delivery to create more flexible fulfilment networks tailored to local demand.

Source: Amazon

The operational levers improving profitability 

Retailers are deploying several levers to improve ecommerce economics. 

1. Store based picking and staging

Pickup counters, curbside zones, and staging areas are being expanded to streamline fulfilment and reduce congestion. Ahold Delhaize USA has expanded its pickup counters and curbside zones, stating that stores will function more as local fulfilment hubs, with staging areas for delivery partners like DoorDash.

2. Third party delivery partnerships

Partnerships with delivery platforms are widening coverage and reducing last mile costs. Kroger, Aldi, and Wegmans expanded partnerships with Uber Eats in H2 2025.

3. In store automation 

Automation is becoming central to profitable fulfilment. Walmart’s APD centres and Amazon’s micro fulfilment facilities demonstrate how robotics and AI can reduce handling costs and increase throughput. 

4. Hybrid fulfilment networks 

Retailers are increasingly splitting fulfilment across stores, dark stores, and third-party partners to create more flexible, locally optimised networks. 

5. Commercial levers 

Retailers are adjusting delivery fees and minimum spends, increasing basket size, and leveraging subscription-based delivery programmes. Strong private label performance and improved digital optimisation are also supporting margin improvement. 

The path forward 

North American grocery ecommerce is entering a new phase with profitability becoming the principal driving strategy. Retailers are redesigning fulfilment networks, investing in automation, and using stores as hybrid hubs to support rising delivery demand. 

If stores are now fulfilment infrastructure, the next competitive battle is not really about delivery speed anymore. It is about store footprint, format and location strategy. Retailers with the right store networks and the ability to invest in upgrading them now have an ecommerce advantage that goes beyond pure technology spend. That reframes “store first” from a cost‑saving tactic into a competitive moat that will shape which retailers win the next phase of grocery ecommerce. 

For suppliers, this shift creates clear implications. As retailers focus more sharply on profitable online growth, they will expect support on the fundamentals that influence fulfilment economics. Categories will need pack formats and value ladders that work well for store-based picking, minimise substitutions, and help build larger delivery baskets. Innovation will need to align with the realities of store-led fulfilment rather than assuming centralised automation. 

In many ways, grocery ecommerce is becoming a real estate game again. The retailers with the right store networks will have a growing competitive advantage.