Grocery retailers who invest in digital experiences and private brands stand to capture meaningful nonfood share before other channels lock in those shoppers for good.
By: Doug Baker, Vice President, Industry Relations, FMI
Drawing on the new FMI report, "The Power of Nonfoods at Retail 2026," we looked at the overall size and growth of the nonfood market. Total non-edible sales across U.S. multi-outlet retail reached $310 billion, up 1.8% year over year. That's $5.6 billion in new dollars, generated even as unit demand softened and consumers tightened their belts.
There are two shifts quietly changing who captures that spending: the acceleration of online purchasing and the rising clout of private brands. Neither trend is new. Both are moving faster than many grocery operators expected, and both carry real urgency.
Online is not taking over. But it is taking share.
The channel picture for nonfoods still favors brick and mortar. Circana data cited in the report shows 78 cents of every nonfood dollar is spent at physical retail. But ecommerce grew 16% year over year while in-store performance was essentially flat. That gap matters, and it is widening. Let’s face it, no one prefers to haul their heavy dog food or carry a heavy jug in from the car.
The categories shifting online fastest are worth watching closely. Nutrition and weight loss saw 45% of buyers report changing how they shop over the past few years, the highest of any category in the survey. Cosmetics and pet care are also seeing meaningful online migration, driven by ease of purchase, promotions and a wider product assortment than most physical stores can carry.
OTC medications, household cleaning and oral care still tilt heavily toward in-store purchases. That is good news for grocery. These are high-frequency, planned-purchase categories where the physical store has a natural advantage. Shoppers want these items available when they need them, not two days later. Grocery's job is to make sure the price and selection are competitive enough to keep them from looking elsewhere first.
Private brands are not just holding their own
For years, private brands in nonfoods were not at the forefront of grocery strategy and served as a lower-cost option for shoppers looking to stretch their dollar. That framing is outdated.
In OTC medications, the FMI report shows private and name brands are now purchased at equal rates, with 39% of buyers leaning toward each. In food storage and protection, 41% of shoppers mostly or exclusively buy store brands, nearly matching the 43% who favor name brands. Party essentials actually flips the script with private brands edging ahead.
What is driving the switch? Good value leads at 40% to 60% across categories, but quality is close behind. In pet food, 49% of those buying more private brands cite quality as a factor. Forty-nine percent of those buying more store-brand nutrition and weight loss items were also prompted to buy more due to quality. Shoppers are not settling for private brands. Many are choosing them because they believe the quality justifies the switch.
The barrier to private brand adoption is also quality, just in the other direction. Shoppers buying fewer private brands in categories like cosmetics (52%), household cleaning (52%) and vitamins (51%) cite quality concerns as the primary reason. That is the gap retailers can close through better product development, cleaner ingredient stories and smarter packaging.
What grocery retailers should note
Two things stand out from the data. First, online growth is real but concentrated. Grocery retailers should protect the high-frequency, in-store categories and make sure the digital experience for pet, vitamins and cosmetics is competitive enough to retain shoppers who are increasingly comfortable buying online.
Second, private brands in nonfoods are a margin and loyalty opportunity, not just a value play. Shoppers who trust a store's private brand buy more from that store. Retailers who invest in quality signals, including packaging, ingredient transparency and shelf presentation, will convert more fence-sitters over time.
"The Power of Nonfoods at Retail 2026” is available for download at no cost, with the complete data, category breakdowns and detailed charts.
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