Hi everyone, Blake here.

Brick Meets Click reported in June that US eGrocery sales have now held year-over-year growth above 20% for six consecutive quarters, and the reason they give has less to do with shoppers changing their minds than with fulfillment getting faster. Delivery is where most of that growth has landed, and delivery costs more to fulfill than pickup does, which puts a cost problem in front of regional grocers at the exact moment the channel starts to matter to their business. Most of this edition is our read on where that cost actually sits, which parts of it you control, and which parts you signed up for without necessarily deciding to.

The full Brick Meets Click report is this month's Featured Insight, and it's worth reading end to end rather than taking our summary of it, since the monthly detail behind these numbers carries more than any excerpt of it can.

🚛 Delivery passed pickup. Now the Economics have to work.
💬 Featured Insight: Brick Meets Click

For most of the last five years, pickup was the sensible answer to online grocery, and it was the right answer. Shoppers came to the store, the retailer avoided the last mile, and the cost structure held together well enough that a lot of regional grocers built their entire digital operation around it. That logic still works. What changed is that it no longer covers the whole market.

In August 2025, Brick Meets Click measured delivery at $5.0 billion, or 45% of total US online grocery spend, against pickup at $4.1 billion and 36.5%. Delivery had picked up close to six share points over the prior twelve months, and pickup had given up roughly the same. Delivery sales that month rose 30% year over year with average order value up 10%, while pickup slipped 4% on lower order frequency and per-order spending that came in under inflation, moving from $4.3 billion down to $4.1 billion. The market around both grew nearly 14% to a record $11.2 billion.

Pickup did not stay down. Brick Meets Click reported that pickup reached a new high by November 2025, and that delivery's gains that month came without pulling pickup down with them. They flagged that as a point regional grocers should pay attention to, precisely because pickup carries the lower cost structure of the two.

So the story here is not that pickup is dying. It's that delivery has become the largest segment in a market that has now held year-over-year growth above 20% for six consecutive quarters through the first quarter of 2026, and delivery costs more to fulfill than pickup does.

Brick Meets Click is specific about the mechanism. They attribute the sustained growth to two fulfillment innovations, ultra-fast delivery and sub-same-day fresh shipping, and they say those innovations are eroding the need for quick trips to the physical store. They also credit those same innovations with letting Amazon and Walmart take share.

That is the part regional grocers should read twice. The growth in delivery is not coming out of pickup alone. Some of it is coming out of the fill-in trip, which is the highest-frequency reason a shopper walks into a store.

Coresight's ninth annual US Online Grocery Survey, fielded June 4 among 2,013 consumers, shows the same thing on the preference side. Among online grocery shoppers, 66.7% said they mainly had orders delivered over the past 12 months, against 31.2% who said they mainly collected. That is a 35.5 point spread, and it's the widest Coresight has recorded in nine years of asking. In 2022 the two were roughly even.

Two independent measurements, one of dollars and one of stated preference, pointing the same direction.

Shopper preference for delivery was never the constraint. People have always preferred having groceries brought to them. The constraint was the fee.

Coresight attributes part of this year's growth to subscription programs that reduce delivery costs. David Bishop at Brick Meets Click made the same argument from the sales data back in July 2025, saying that removing an explicit fee like the standard delivery charge through a membership takes away a top barrier to usage, and that this unlocks latent demand for delivery. Once the charge stopped appearing at checkout, demand that already existed showed up.

That is why this shift is unlikely to reverse. Nothing puts the fee back in front of the shopper. The cost moved into a membership, and memberships get renewed.

Bishop put the consequence for regionals plainly in January, saying structural shifts in 2025 will create stiffer headwinds in 2026, especially for regional grocers. Reporting on those findings noted that shoppers are fragmenting spend across fulfillment methods, so regionals need to perform across delivery, pickup and ship-to-home rather than choosing one.

Which brings the question back to cost. Delivery is where the growth is, and delivery costs more to fulfill than pickup. Running it profitably is now a live operating problem rather than a strategic one.

Delivery economics usually get discussed as a single number. There are three components, and they behave differently from each other.

Pick labor. Yours to control, and the component with the most room in it.

Last mile. A negotiated per-delivery fee. Roughly fixed per order. Either the shopper covers it or a membership program does. The membership approach works better, because it buys order frequency at the same time.

Platform. What you pay for the software running the channel. Every retailer pays this. What varies is the shape.

Coresight's read is that traditional grocers face rising pressure to improve delivery economics as fulfillment costs keep climbing. That pressure lands on pick labor and platform.

Both structures are legitimate ways to pay for a platform, and they get priced differently because they allocate risk differently. The difference shows up as volume grows.

Under a percentage model, platform cost tracks GMV. Grow the channel and the platform line grows alongside it. Under a flat fee, the two are decoupled, and incremental orders carry only their marginal fulfillment cost.

Illustrative, at a 10% rate:

A percentage model genuinely suits a retailer who is unsure the channel will work, because there is no fixed exposure if volume disappoints. Shared risk has value, and it gets priced accordingly.

A flat fee moves in the other direction. You carry fixed cost and keep the upside of each incremental dollar, so contribution margin per order improves as volume builds.

The question worth asking is whether you intend to grow this channel. If delivery stays a hedge, a percentage structure is defensible. If delivery is heading toward a meaningful share of your business, and the data above suggests it is, then model the platform component at three times your current delivery volume before your next renewal. That figure should drive the conversation, not this year's rate.

This is where our conversations tend to stall.

We ask what fulfillment looks like by the numbers. Units per hour by store. Cost to fulfill per order. Substitution rate by category. Perfect order rate. Contribution margin on a delivery order against a pickup order.

Most retailers can quote a platform rate to the decimal. Very few can quote units per hour. That cost sits inside store labor and rarely gets allocated per order or per channel, so the largest controllable component in the stack is the one going unwatched.

The tooling is part of why. A lot of grocery picking software is built around one associate picking one order on one walk through the store. Some of it was adapted from apps designed for a gig shopper filling a single customer's basket, and the single-order architecture came along with the adaptation. That works at ten orders a day. At two hundred it becomes a treadmill, and associate effort won't fix it, because the inefficiency lives in the routing.

What moves units per hour is changing the unit of work. Batch picking, so one pass through the store serves several orders. Zone picking, so the store gets divided and orders assemble in parallel. Automatic job assignment, so labor gets allocated against real order flow instead of by a manager guessing at 6 a.m.

Bishop has pointed at the same levers. In a July 2025 discussion of the free delivery era, he covered why pickup does not have to become a loss leader, including tiered time-slot pricing, and then moved to operational levers including order batching alongside revenue offsets from retail media.

Instrument before optimizing. Get units per hour, cost to fulfill, promise time and perfect order rate visible per order and per fulfillment method. Most operators find money inside the first month, usually in substitutions and batching.

Separate the three components and look at which ones you chose deliberately. Model the platform component at three times today's volume.

Then look at whether your picking tools actually support batch and zone work, or whether they can only move one order at a time.

One honest note. Sujeet Naik, the Coresight analyst on this report, argues that most independent grocers should not set out to promise groceries in 30 minutes, and that dependability should be the goal instead of speed. He makes a broader point too, that independent and regional grocers will struggle to beat Walmart or Amazon at their own game given the scale those companies can put behind technology, delivery and membership. We agree with both. Speed is not the win here. Dependability is still a measured and tuned operation, and it does not arrive on its own.

Which is where we'd put the emphasis. The regional grocers who make delivery work over the next few years will be the ones who treated it as a cost structure problem, and that work is mostly unglamorous. It's units per hour. It's knowing what a delivery order actually costs to fulfill and being able to see that number by store and by daypart. It's a platform bill that doesn't grow every time the channel does. None of that shows up in a press release, and all of it shows up in the P&L.

Since surging more than 20% year-over-year in 4Q24, total U.S. eGrocery sales have sustained that rate of growth for six consecutive quarters through 1Q26, according to the ongoing monthly Brick Meets Click Grocery Shopper Survey. This sustained hyper-growth is being fueled by new fulfillment innovations that offer even quicker cycle times for Delivery and Ship-to-Home orders.

The two distinct fulfillment innovations – ultra-fast Delivery and sub-same-day Ship-to-Home of fresh groceries – are attracting a greater share of grocery spending online and eroding the need for quick trips to the physical store. These innovations have allowed Amazon and Walmart to capture more market share by expanding share-of-wallet within their respective customer bases. In addition, while Pickup continues to post healthy gains, its growth rate is being outpaced by both Delivery and Ship-to-Home which are growing nearly three times as fast as Pickup.

Online’s share of total grocery spending has climbed dramatically on a quarterly basis, expanding from less than 15% at the end of 3Q24 to more than 19% in 1Q26. When excluding Ship-to-Home – a service most regional grocers do not offer – online's share of total spending jumped from 12% to nearly 16% over the same period.

Read the full report →