How to Start Grocery Delivery Services in the US

The online grocery market in the US has seen tremendous growth driven by changing consumer habits and technological advancements. Consumers now prefer to shop for groceries and household items online rather than visiting a traditional grocery store, leading to an increase in the demand for online grocery delivery services. 

The U.S. online grocery market is a powerhouse, demonstrating consistent growth. According to recent forecasts, the revenue in the grocery delivery market is projected to reach an astounding US$327.72 billion in 2025, with a CAGR of 8.29% (2025-2030). 

As more consumers shift to online platforms, entrepreneurs looking to start their online marketplace in the US could benefit from creating a grocery delivery platform to cater to buyer demands and achieve success. This blog informs aspiring business owners and established traditional grocery retailers looking to create an online grocery marketplace about the steps required to launch their grocery delivery service in the US. 

Why Start Grocery Delivery Services in the US

As an entrepreneur, consider the following points to understand why starting an online grocery delivery platform in the US at this time is viable for achieving online success. 

Data Supporting the rise in online grocery delivery services:

• The US online grocery market volume is expected to reach US$488.08 billion by 2030.
• The estimated annual revenue growth rate from 2025-2030 is 8.29%.
• By 2030, the number of users in the grocery delivery market is expected to grow to 187.8 million.
• The average revenue per person in the online grocery market in the US is projected to be US$2.21K for the year 2025.
• More than 150 million Americans have purchased groceries online at least once, and over 40% do so monthly.

Changing Consumer Shopping Behavior Over Time:

• Modern consumers value time-saving solutions. Online grocery delivery eliminates travel, parking, and checkout lines, making it a preferred choice for busy families and professionals.
• Online platforms serve a broader demographic, including people with mobility issues, rural residents, and those seeking specialty products unavailable locally.
• Grocery shopping is a recurring need. Once customers trust the grocery brand and platform, they tend to be loyal, leading to high retention rates and predictable revenue streams.
• Shoppers increasingly expect seamless digital experiences, from intuitive apps to real-time tracking and flexible delivery options, making online grocery delivery services a success.

Since, the data clearly states the drastic rise in the demand for online grocery shopping services in the US, entrepreneurs looking to enter the online market, must grab this opportunity, given the favourable conditions for their marketplace to achieve success.

Major Players in the US Grocery Delivery Market 

To truly understand the online grocery delivery industry, it’s essential to analyze the existing major players. Each has established itself as a famous brand name in this market with a distinct approach, as discussed in this section.

1. Kroger:

It is one of the major American grocery delivery marketplaces. The platform allows customers to shop for a wide variety of groceries with delivery and pickup options available, fulfilled by a team at Kroger or through third-party services. It emphasizes providing high quality delivery experience, making the customer’s life simpler.

• Founded: 1883
• Founder: Bernard Kroger
• Headquarters: Cincinnati, Ohio, United States
• Total Revenue: US$147.12 billion
• App Downloads: 10,000,000+ downloads
• Monthly Visits: 47.35 million

2. Instacart: 

It is one of the prominent grocery delivery services in the US. One thing to note is that Instacart does not own an inventory; rather, it offers a platform connecting customers with retailers. Buyers can browse through the marketplace and select grocery products from a wide range of stores, add them to their cart, and select a delivery option at their convenience. Additionally, Instacart provides same-day delivery as well as pick in-store options for its customers.

• Founded: 2012
• Founders: Apoorva Mehta, Max Mullen, Brandon Leonardo
• Headquarters: San Francisco, California, United States
• Total Revenue: US$3.45 billion
• App Downloads: 10,000,000+ downloads
• Monthly Visits: 46.82 million

3. Amazon Fresh: 

A product of Amazon and a major player in the US, Amazon Fresh is known for providing grocery delivery services for perishable grocery products. It offers a seamless shopping experience via website and mobile apps and provides various delivery options for the users. It was initially launched in 2007 and offered services to prime members only, but it gradually evolved to provide grocery delivery services to non-members.

• Founded: 2007
• Founders: Jeff Bezos
• Headquarters: Seattle, Washington, United States
• Total Revenue: US$650.31 billion
• App Downloads: 500,000,000+ downloads
• Monthly Visits: 2.8 billion

4. Peapod: 

Launched in 1989, it is one of the oldest companies to start online grocery delivery services in the US. It facilitates customers to order grocery products online and get them delivered to their homes through its website and mobile app. It offers a specific feature to customers that allows them to sort out the products as per their dietary requirements, making it stand out from its competition.

• Founded: 1989
• Founders: Andrew and Thomas Parkinson
• Headquarters: Chicago, Illinois, United States
• Total Revenue: US$193.1 million
• App Downloads: 2.3K downloads
• Monthly Visits: 626 million

5. Walmart Grocery: 

It is among the major players in the grocery delivery services in the US, holding the title of the largest grocer. They offer a wide variety of groceries, including fresh produce, packaged goods, and private label brands. The platform offers a vast inventory of grocery products and competitive pricing for consumers to choose from. It also leverages the use of predictive analytics to provide personalized recommendations to buyers aiming to improve the overall shopping experience.

• Founded: 1962
• Founders: Sam Walton, Bud Walton
• Headquarters: Bentonville, Arkansas, United States
• Total Revenue: US$681 billion
• App Downloads: 100,000,000+ downloads
• Monthly Visits: 526.99 million

Comparison Between the Leading Players in the US

Presented below is a table highlighting the USPs, Business Model, and Revenue Models for each grocery delivery marketplace mentioned in this section.

How to Start Grocery Delivery Services in the US

Starting the journey to create an online grocery marketplace requires a strategic and effective step-by-step approach as discussed below. 

Step 1

Conduct market research and perform competitor analysis: Before starting a grocery delivery service, entrepreneurs need to conduct market research to understand the current grocery marketing needs, know customers’ pain points and expectations, spot gaps that they can cover through their services, and make better decisions to stand out from the competition. Additionally, conducting market research will help business owners identify a niche they want to cater to and decide their target audience for grocery delivery services.

Parallely, it is essential to search for and analyze the competitors. Entrepreneurs must delve deeper into direct as well as indirect competitors and analyze their working, strategies, strengths and weaknesses such as delivery speed, product variety, user interface and user experience, examine their pricing and service models (subscriptions, how do they charge), and look for opportunities where the aspiring entrepreneurs can perform better than the competition. Apart from the above, do look at a competitor’s marketing strategies and what tactics are used by them to reach their target market.

Step 2

Choose a business model: Based on the market research and competitive analysis, select a business model suitable for the grocery marketplace. It defines a strategic workflow of how a grocery business will work. Some of the most common business models entrepreneurs can opt for are as follows:

1. Multi-vendor business model:

Entrepreneurs can create a grocery delivery marketplace that involves multiple sellers coming together and offering their products on a single platform. In this model, however, the platform itself does not hold inventory but facilitates transactions between sellers and buyers.

2. Inventory-based business model:

The grocery marketplace admin purchases and holds inventory from various sellers in a warehouse and then processes and delivers orders directly to consumers. This allows for the entire management of the supply chain without relying on a third-party entity.

3. Hyperlocal business model:

Opting for this business model allows entrepreneurs to create an online grocery platform focusing on delivering goods from local businesses to customers within a small geographical area. The major advantage of this model is that the groceries ordered take less time to be delivered to buyers.

4. Click and collect model:

This business model allows entrepreneurs to launch a marketplace for customers to order online, pay, and pick up their order from the physical grocery store. It helps in minimizing the overall time spent at a store to buy groceries, combining the seamless online shopping with a traditional in-store experience.

5. Scheduled delivery model:

Entrepreneurs can create a grocery delivery marketplace where they can enable customers to choose a particular date and time for the delivery of their grocery orders. This provides flexibility and convenience to buyers who usually have busy schedules and specific grocery delivery requirements.  

Step 3

Finalize the revenue streams: Once an entrepreneur selects a business model, it is time to choose the revenue streams for their marketplace. The chosen business model influences revenue stream, deciding the overall revenue generation, growth, and profitability of the grocery delivery marketplace. Popular revenue streams are as follows:

1. Commission from Sellers:

A percentage of each sale charged by an admin, made through their grocery marketplace.

2. Delivery Fees:

Charges are directed to customers for each grocery order/ service. These can be fixed or changed as per the order value, distance, and time.

3. Subscription Models:

Admins can offer monthly or annual memberships for vendors seeking an alternative to the commission model, allowing them to use the platform and its services. Owners can also provide buyers access to premium services like free delivery/ shipping on orders.

4. Advertising Charges:

Businesses can advertise products via banner advertisements, marketing campaigns (offers, discounts, and deals) on the grocery delivery marketplace by paying certain fees to the admin. 

5. Promotional Fees:

Another method for entrepreneurs to earn revenue is by allowing vendors to opt for sponsored listings for the products; however, certain fees will be charged for each promotion.

Step 4

Decide on the features to include: With the rise in grocery delivery marketplaces, it is important for entrepreneurs to stand out from others, and one way to do so is to decide on the specific features to be included on the platform. Consider the following features for every user:

USERS – KEY FEATURES

Buyers	Sellers	Admin	Delivery Staff
Easy registration	Easy onboarding and store setup	User management	Efficient route optimization and navigation
Multi-vendor cart functionality	Product catalog management	Multiple revenue channels	Order assignment and acceptance
Multiple secure payment options	Order management	Product and category management	Delivery status updates
Order tracking and real-time status updates	Banner ads	Commission and payment management	Powerful Dashboard
Delivery scheduling	Subscription Plans	Reporting and analytics	Push notifications
Push notifications	Sales reports and analytics	System settings and configurations	–
Customer support	Bulk Import/ Export	Customer support management	–
–	Pin Shop on the map	Marketing toolsTax management	–

Step 5

Build an online grocery delivery marketplace/ website/ app: This is the ultimate step where an entrepreneur needs to select a development approach to create their grocery delivery marketplace, website, or app. To do so, business owners can choose from the two extensively used options as discussed below. 

• Custom Development:

One option is to build a grocery delivery platform from scratch, offering maximum flexibility and customization; however, it is highly time-consuming and expensive. It is ideal for entrepreneurs looking to establish large-scale businesses that require unique and complex functionalities.

• Readymade Solution:

The second and most convenient option for aspiring entrepreneurs is to go for a readymade solution to create a grocery delivery marketplace. These solutions come with pre-integrated essential features for all users. Additionally, it supports customizations for owners looking for extra additions to their marketplace.

One of the major advantages of readymade software is that the grocery delivery platforms are easy to setup, allowing faster deployment, and are cost-effective as it require low upfront costs.

Step 6

Get ready to launch and market the platform: The final step in the process is to launch the marketplace and promote it, making the vendors, customers, and other users aware of the same. In order to do this, it is important to apply various marketing and promotion strategies to increase the online visibility of the grocery marketplace. 

Check out the strategies that can be deployed for the same:

• SEO
• Social Media Marketing
• Content Marketing
• Paid Advertising
• Mobile Optimization
• Email Marketing

Common Challenges in Starting Grocery Delivery Services in the US

While the opportunities are vast, the path to success isn’t without its hurdles. Aspiring entrepreneurs must be prepared to tackle several common challenges:

• Building Online Presence: It is mandatory for new entrants (aspiring entrepreneurs) to establish their online presence and build brand credibility, converting users into loyal customers. However, it can be a challenge for aspiring entrepreneurs as they are new and are competing with the established players. To define the authenticity, they need to demonstrate social proof, customer satisfaction via testimonials and reviews, present case studies, and be transparent about their process.
• Inventory Maintenance: The effective and accurate maintenance of inventory across multiple stores is essential. Perishable groceries and grocery products need to be tracked regularly to ensure the availability of items and their freshness for the consumers. Out-of-stock items can lead to customer dissatisfaction and a loss in overall sales.
• Delivery Inefficiency: Ensuring timely, accurate, and cost-effective deliveries, especially for perishable goods, is a major challenge for entrepreneurs. Route optimization, real-time tracking, and efficient driver management are critical for owners to establish brand credibility.
• Competitive Market: The online grocery space is crowded with established players and numerous regional and local services looking to create an online platform. Standing out requires a strong USP, essential and unique features for all users (as mentioned in the above sections), and other effective differentiations.
• User Interface/ User Experience: A seamless UI/UX is important for the smooth running of any online grocery delivery service on a website or mobile app. Entrepreneurs must ensure that the structure, navigation functionalities, design and color, and integrated applications function smoothly. Any kind of technical or non-technical lag can lead to a loss of customers.
• Customer Loyalty: With numerous options available, customers can easily switch platforms. A seamless user experience, competitive pricing, consistent quality, and excellent customer service are vital for retention.
• No Coding Knowledge: Building a grocery delivery marketplace requires a prerequisite of knowing coding, as every element will be created from scratch. Entrepreneurs lacking technical expertise may face difficulty in entering the grocery market. They may overcome the same by hiring a team of experts, which will be expensive, or they can go for a readymade software. It comes with pre-coded functionalities along with free technical support for the aspirants. 

How Growcer Helps Solve The Above Challenges

For entrepreneurs seeking a rapid and effective market entry, a specialized grocery delivery software like Growcer provides the solution to the above challenges. This grocery delivery software helps entrepreneurs overcome the above challenges by allowing them to create a grocery delivery marketplace with pre-integrated features and functionalities. 

These include effective inventory management, stock tracking, route optimization, real-time tracking when it comes to delivery management, a seamless design allowing the smooth functioning of the marketplace, and excellent customer support for entrepreneurs and other users, as well as providing free technical assistance for 1 year. 

The next section will help aspiring entrepreneurs know more about Growcer, the go-to choice for grocery delivery software.

What is Growcer:

Growcer is a multi-vendor, ready-to-launch online grocery delivery software. It is designed to streamline the entire process of setting up and managing a grocery delivery marketplace. It offers a comprehensive, white-label platform that entrepreneurs can brand as their own. Additionally, it can be scaled and customized to serve various industry types. This software also has a mobile app (iOS and Android versions) for buyers and delivery staff, making the overall shopping experience effective.

USPs of Growcer:

• Self-hosted software
• 100% white-label
• GDPR compliant
• Streamlined UI/UX
• Customizable and scalable
• Free 1-year technical support
• Complete source code ownership

Growcer Clients:

• Superkiwi: It is an online grocery marketplace, based in the US, that focuses on providing groceries with convenient delivery services to buyers. Built with Growcer, a multi-vendor software with included features and functionalities, Superkiwi aims to provide a premium shopping experience to consumers.

• Freshcartz: It is a US-based grocery delivery platform delivering fresh, high-quality groceries to buyers. Powered by Growcer, it is packed with several features to offer a seamless user experience and shopping convenience to its customers.

• Dhalmart: It is an American online grocery delivery marketplace that allows vendors to sell fresh produce, organic groceries, and other products to buyers. Launched using Growcer, it aims to empower small business owners and farm product sellers to connect with potential buyers looking to buy fresh and organic groceries.

Conclusion

The US online grocery delivery market is rapidly expanding and provides an opportunity for visionary entrepreneurs to create and launch their grocery delivery platform. While there might be challenges they need to face; however, conducting comprehensive research and analysis and choosing the right grocery delivery software can help entrepreneurs overcome these challenges. A readymade grocery delivery software like Growcer provides the foundational structure to help entrepreneurs build a scalable and effective grocery marketplace.

FAQ’s

Q: How much does it cost to build an online grocery delivery marketplace in the US?

A: The overall cost of creating an online grocery marketplace in the US depends on various factors. They range from selecting a development approach (custom/readymade), business model, to the addition of specific features, and other additional customizations. Opting for a custom approach can range from US$25000 – US$50000+, while a readymade software will be available within US$10000.  Entrepreneurs looking for cost-effective solutions can opt for a readymade software such as Growcer due to its pre-built functionalities at a low price. Check out the pricing packages to know more.

Q: Which Grocery software is the best for creating a grocery platform like Peapod and Amazon Fresh?

A: Even though entrepreneurs have an option to choose from various grocery software out there in the market; however, it is recommended to opt for a readymade, 100% white label grocery delivery software like Growcer. It comes with pre-built features and functionalities that make it easy for aspiring owners to enter the online industry as well as create a grocery marketplace similar to Peapod and Amazon Fresh.

Q: What is the best business model for a grocery delivery marketplace in the US? 

A: Business owners unsure about which business model will work for them must consider who their target audience is and how many resources they have at hand. There are various business models such as multi-vendor, inventory-based, click and collect, hyperlocal model, and more. However, for new entrants, it is recommended to choose either a hyperlocal or a multi-vendor model for efficiency and success.

Q: Is it possible to scale an online grocery delivery marketplace built using Growcer?

A: Yes, Growcer is a highly scalable and flexible software that helps entrepreneurs create a grocery delivery marketplace. The software is developed in a way that allows the onboarding of new users or the integration of advanced features without affecting the overall performance of the grocery marketplace.