Grocery brands achieved impressive 16% year-over-year sales growth in Q3 2025, outpacing the broader ecommerce average. But beneath the strong revenue numbers, profitability took a significant hit—with unit margins compressing 6.4% as brands absorbed rising costs rather than passing them to price-sensitive shoppers.
Download the full report
Used by the most loved brands in the world
Key takeaways
Strong sales masked eroding profitability: OPS grew 16.8% YoY, but margins fell 6.4% as brands absorbed higher costs and relied on promotional pricing to drive volume.
Inventory build-up paid off for events: A 42% YoY increase in on-hand inventory and 9.3% improvement in fill rates positioned brands to meet demand during tentpole shopping periods.
High-impact stockouts drove major revenue loss: Despite better overall fill rates, revenue lost to OOS surged 108% YoY, indicating critical items were unavailable at peak demand moments.
Ad investments outpaced efficiency gains: Retail media spend jumped 30.2% YoY while ROAS declined 3.8%, showing brands are spending more to hold position rather than gaining ground.
Shoppers showed strong intent despite lower traffic: Glance views dipped just 0.5% YoY, but conversion rates climbed 17%, reflecting more purposeful purchasing behavior.
Price increases met with reduced discounting: Average selling price (ASP) rose 11% YoY while discount percentages fell 0.4%, suggesting brands are attempting to preserve margin where possible despite competitive pressure.
Grocery market resilience in Q3 2025
Explore Q3 2025 grocery ecommerce trends highlighting resilience, shifting demand, and strategies brands used to adapt to market changes.
