May 21, 2001, 12:00 AM

Online grocery will grow to $11.3 billion by 2006, Jupiter says

Jupiter Media Metrix says consumer packaged goods companies could boost online grocers by using the Internet as a testing ground.

Jupiter Media Metrix says the online grocery segment will have 2% of the total U.S. grocery sales by 2006, despite the fact the segment has struggled to survive on the Internet. The research company predicts that online grocery sales will grow from $1 billion in 2001 to $11.3 billion by 2006. Jupiter says the consumer packaged goods manufacturers could save the online grocery business by embracing the online channel and by using it as a testing ground for new products, packaging and pricing. The online grocery market grew by nearly 200% between 1999 and 2000 but the high cost of expansion and the volatile economy caused Jupiter Media Metrix to lower its 2001 grocery sales forecast by 50%, from $2 billion to $1 billion. Jupiter lowered its 2005 forecast by 61% from $18 billion to $7 billion.

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