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Online grocery has spent years battling a reputation for being a great customer experience but a difficult business model.
Yet as consumers increasingly expect same-day delivery, retailers are investing heavily in fulfillment infrastructure, automation, and digital capabilities in an effort to make the economics work.
So what has actually changed? And what still needs to change?
To answer those questions, I sat down with Rita Kerbaj, Chief Strategy Officer at the Rohlik Group, for a special edition of 5 Insightful Minutes focused on the evolving economics of online grocery.
Our conversation explored what separates profitable online grocery operators from the rest of the pack, when dedicated fulfillment centers begin to outperform store picking, why same-day delivery can be profitable when executed correctly, and what will ultimately define the winners in online grocery over the next decade.
Here are my biggest takeaways from the conversation:
Why Online Grocery Profitability Starts With Bigger Baskets
According to Rita, the biggest misconception about online grocery profitability is that it can be built around convenience purchases alone. The operators succeeding today are focused on winning the weekly shop, driving average basket sizes above $100 and building fulfillment networks specifically designed for online grocery rather than trying to retrofit existing store operations. As Rita explained, “The operators really making it work today are the ones who have shifted to a full basket, really delivering a weekly shop at over $100 as an average basket.” The lesson? Profitability starts with scale, discipline, and designing your operations around how customers actually shop.
The Dark Store Debate Is Finally Settled
When the conversation turned to same-day delivery, Rita didn’t hesitate. Customers increasingly expect delivery windows measured in hours, not days, but she argued that the challenge isn’t the promise itself, it’s how retailers execute against it. Profitable same-day delivery requires carefully balancing customer density, fulfillment capacity, automation, and last-mile routing. As Rita put it, “The promise itself isn’t the problem, it’s how you execute it.” The retailers winning in this space aren’t simply moving the fastest; they’re building networks capable of delivering consistently and efficiently. As Walmart, Amazon, and others continue investing heavily in local fulfillment infrastructure, Rita’s point is clear: same-day delivery can work, but only when the network behind it is built to support the promise.
When Store Picking Stops Making Sense
That doesn’t mean store-based fulfillment is obsolete. Rita explained that store picking can be an effective entry point for grocers with lower online penetration, excess labor capacity, and longer delivery windows. However, once online demand begins to scale, the economics shift quickly. At roughly 500 orders per day, retailers should start evaluating dedicated fulfillment solutions because labor productivity improves, picking costs decrease, and both online and in-store customer experiences become easier to manage. In other words, there comes a point when using stores to fulfill online orders creates more friction than value.
Omnichannel Can’t Be Three Separate Businesses
Perhaps the most compelling takeaway from the conversation was Rita’s perspective on omnichannel retail. Too many retailers still manage stores, e-commerce, and fulfillment as separate businesses competing for resources and priorities, but according to Rita, that approach ultimately hurts everyone. The future belongs to retailers that view omnichannel as a single operating system designed around the customer journey, where every decision related to inventory, fulfillment, labor, and delivery works together to create a seamless experience. As Rita put it, “The minute they start competing, you’re losing the customer both in-store and online.” It’s a simple statement, but one that captures one of the biggest challenges facing grocery retailers today.
The Next Competitive Advantage Isn’t Just Automation
Automation remains critical, but Rita believes the next competitive advantage will come from connecting all of the systems behind the scenes. Demand planning, replenishment, labor management, routing, robotic picking, pricing, promotions, and last-mile delivery all need to work together. Retailers that successfully orchestrate those capabilities around a clear customer promise will be best positioned to win as online grocery continues to grow. Looking ahead, Rita predicts that the winners won’t be determined solely by technology investments, but by making clear choices about where stores fit into the model, where dedicated fulfillment centers make sense, and how every part of the operation supports the customer experience.
The Bottom Line
Online grocery isn’t going away. In fact, Rita expects online grocery to account for nearly 30% of all grocery sales by 2030, making today’s infrastructure decisions more important than ever. The retailers that succeed over the next decade won’t necessarily be the ones with the most stores or the fastest delivery times. They’ll be the ones that make deliberate choices about their fulfillment strategies, invest in the right infrastructure, and align every part of their organization around the customer experience. As Rita made clear, profitable e-grocery isn’t about chasing every opportunity. It’s about building an operating model that can consistently deliver on the promises customers value most.
You can listen to or watch my full conversation with Rita Kerbaj wherever you get your podcasts.
Apple Podcasts | Spotify | Soundcloud | Amazon Music | YouTube
Be careful out there,
Chris and the Omni Talk Team
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Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.