Grocery brands grew revenue in 2025, but profitability took a hit. Price wars replaced promotional tactics as ASP dropped 8.9%. Meanwhile, inventory jumped 41% and Lost Buy Box surged as 3P sellers intensified. The threat shifted from supply chain to marketplace control.
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Key takeaways
Inventory funded the growth engine: Brands carried 41.2% more inventory on average, with a sharp H2 build to support online bulk buying and subscription growth
Fulfillment became the competitive advantage: PO Fill Rate sustained 95%+ for most of H2, maintaining operational reliability during peak demand
Price wars replaced promotional tactics: ASP dropped 8.9% as brands lowered base prices to stay competitive, while discount frequency fell 2.7pp, shifting from promotions to permanent price cuts
Traffic growth met strong conversion: Glance views rose 8.2% while conversion improved 10.3pp, driven by repeat subscription customers and consistent product availability
Ad efficiency held while others deteriorated: Return on ad spend (ROAS) remained stable at 3.1x despite ad spend more than doubling in July, making Grocery one of the only categories where paid media maintained efficiency through 2025
Revenue leakage shifted to unauthorized sellers: Lost Buy Box (LBB) peaked in October as third-party (3P) competition intensified, while reported out of stock (OOS) rate improved 1.8pp, proving the threat moved from supply chain failures to marketplace dynamics
