E-Commerce Drove 70% of Grocery Growth in 2025, Reinforcing that Walmart Suppliers Need Channel-Specific Strategies.

Online sales contributed more than 70% of total grocery sales growth in 2025, despite representing about 20% of grocery spending, according to a new report from FMI—The Food Industry Association and research firm NielsenIQ. For Walmart suppliers, this disproportionate growth concentration demands fundamentally different approaches across channels where customer behavior, basket composition, and competitive dynamics diverge sharply.

U.S. online grocery sales increased nearly 19% last year, totaling $325 billion, with projections reaching $452 billion by 2028, the FMI research found. The trajectory suggests suppliers must allocate resources to capture growth where it actually occurs rather than where sales volume currently concentrates.

Small Basket Frequency Requires Different Product Architecture

E-commerce shopping occasions include smaller baskets containing just one to three items, while stock-up trips with 12 or more items account for only 16% of total e-commerce spending, according to the FMI/NielsenIQ report. This basket fragmentation means Walmart suppliers need price-pack architectures optimized for frequent, small purchases rather than bulk value propositions.

Suppliers should develop smaller pack sizes and single-serve options specifically for Walmart’s digital channels, where customers make targeted purchases rather than pantry loading. Products positioned for stock-up trips may need companion SKUs designed for impulse addition to small digital baskets.

Food categories showing fastest online growth, including beverages, meat, coffee, and prepared foods at 18.8% expansion, represent immediate optimization opportunities. Suppliers in these categories can use Walmart Connect’s Sponsored Product ads to capture visibility in digital search results where small basket purchases concentrate.

WFS Enables Speed Requirements That Drive Channel Growth

Average delivery time decreased to about two days versus four days in 2021, with speed becoming a key competitive differentiator, the report found. For Walmart suppliers, Walmart Fulfillment Services provides the infrastructure to meet these speed expectations through 1-day and 2-day shipping capabilities that enhance product visibility with “Fulfilled by Walmart” badges.

WFS participants see an average 50% GMV lift on items with the “Fulfilled by Walmart” tag and a delivery promise of two days or less, according to Walmart data, due to faster shipping badges and stronger placement in search results. Products optimized for WFS fulfillment requirements position suppliers to capture the channel driving 70% of growth.

WFS handles storage, picking, packing, shipping, and returns, allowing suppliers to focus on optimizing for small basket frequency rather than fulfillment logistics.

High-Income Digital Shoppers Create Walmart Connect Opportunities

Online spending increased 29% for households with incomes of $150,000 or more versus 10% for households earning under $25,000, according to FMI/NielsenIQ. This income skew creates opportunities for Walmart suppliers to use Walmart Connect’s advanced targeting capabilities to reach higher-income digital shoppers with premium positioning.

Walmart Connect’s retail media network generated $6.4 billion in advertising revenue in 2025, providing suppliers with precision targeting based on shopping behavior, demographics, and purchase history. Suppliers can use Display ads to reach high-income audiences with elevated product messaging while maintaining value positioning in traditional search results.

The platform’s Insights Activation feature integrates with Scintilla data to identify media strategies based on customer behavior patterns, enabling suppliers to optimize campaigns for the income demographics driving 29% online growth.

Scintilla Data Illuminates Channel Performance Differences

Walmart’s Scintilla platform (formerly Walmart Luminate) provides suppliers with Digital Landscapes insights that reveal how customers find and select products in online versus in-store environments. The platform tracks metrics including sales, category performance, customer penetration, and web traffic across both channels.

Scintilla subscribers outpaced non-subscribers with total omnichannel sales increasing 15% and digital sales growing even faster, according to Walmart Data Ventures. The performance gap suggests suppliers using Scintilla data to optimize for channel differences capture disproportionate growth.

The platform’s upcoming AI-powered intelligence tool will help suppliers understand key metrics and interpret them for channel-specific optimization. Suppliers can use Shopper Behavior data to identify which products perform better in small basket digital purchases versus large basket in-store trips.

Resource Allocation Must Follow Growth Rather Than Current Volume

When e-commerce contributes 70% of grocery growth from 20% of current spending, supplier investment allocation cannot remain proportional to current sales volume. Trade spending on Walmart Connect advertising, WFS optimization, and Scintilla data subscriptions must shift toward the channel driving growth.

Category management conversations with Walmart should focus on capturing online growth acceleration rather than defending in-store market share. The FMI data suggests suppliers who optimize for digital channel requirements while maintaining omnichannel consistency position themselves to capture disproportionate growth.

Walmart’s infrastructure provides the tools for this optimization: WFS for speed requirements, Walmart Connect for targeted advertising, and Scintilla for performance measurement. The path to 25% digital share by 2028 means suppliers must use these platforms to capture growth where it concentrates rather than where it historically occurred.

Success requires channel-specific approaches that acknowledge different customer behaviors, optimize for different fulfillment requirements, and capture growth where the FMI data shows it actually happens in the 70% of expansion driven by digital channels representing just 20% of current grocery spending.

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