The growing trend of utilizing buy now, pay later (BNPL) services for everyday essentials, such as groceries, is reshaping the financial interactions between consumers and food retailers, signalling a significant shift in shopping habits, as highlighted by industry experts and credit analysts.
BNPL options have emerged as a popular mechanism for shoppers to postpone payments, making these services either a convenient way to manage daily expenses or a necessary means for accessing vital products. Matt Schulz, the chief credit analyst at LendingTree, noted this trend. This platform assists consumers in comparing loan options, who pointed out the significance of these services being used for grocery purchases. According to Schulz, this shift was somewhat expected, considering the financial challenges faced by many Americans.
A survey conducted by Bankrate in January revealed a concerning financial landscape, with nearly 40% of U.S. adults reporting lower savings than the previous year and 10% having no savings at all. Furthermore, over a third of those surveyed indicated that their credit card debt surpassed their emergency funds, underscoring the financial strain on many households.
BNPL services, offered by companies such as Afterpay, Zip, Affirm, PayPal, and Sezzle, allow consumers to distribute the cost of a purchase over four instalments spread across several weeks. Unlike traditional credit cards that offer a revolving line of credit for various purchases, BNPL plans are designed for specific transactions. These services often come without interest charges for consumers, with the merchants covering a fee to the BNPL provider for each transaction, similar to the arrangement with credit card companies.
This shift towards BNPL for essential purchases like groceries highlights a changing landscape in consumer finance, with these services becoming an integral part of how many people manage their spending on daily necessities.

BNPL loans are quickly getting more popular with consumers

The popularity of Buy Now, Pay Later (BNPL) programs is on a significant rise among consumers, marking a shift in how people approach financing their purchases. Initially designed to help spread out the cost of more effective investments, such as electronics, BNPL services are now increasingly being used by consumers to manage everyday expenses.
A survey conducted by LendingTree in March revealed a growing reliance on BNPL plans, with 46% of respondents indicating they’ve utilized such services, up from 43% the previous year. Remarkably, over a quarter of those surveyed admitted to using BNPL options to bridge financial gaps until their next paycheck, and 21% have applied these services toward grocery shopping.
Further evidence of this trend comes from Adobe Analytics, which reported a 40% increase in the proportion of online BNPL transactions for groceries during January and February. This was the most rapid growth observed across all retail sectors analyzed in the U.S. during this timeframe.
The widespread use of BNPL services for purchasing groceries came as a surprise even to industry experts. LendingTree’s research highlighted that the appeal of BNPL plans spans across various income levels, indicating a broad-based reliance on these services. This shift suggests a significant change in consumer financial behaviour, with BNPL services becoming a crucial tool for managing daily expenditures.

The risks and rewards of BNPL for grocers

A variety of food retailers now directly incorporate BNPL services as a method of payment, facilitating a seamless transaction process similar to that offered to other merchant categories. Notably, Afterpay lists Kroger among the retailers it collaborates with, whereas Zip highlights its partnerships with Whole Foods Market and Instacart on its platform. Walmart also acknowledges BNPL options by accepting services like PayPal and Affirm as viable payment methods.
The scope of BNPL programs extends beyond the confines of retailers that have formal agreements with these payment services. For instance, Zip introduces the option of a virtual card, which can be utilized at any merchant accepting Visa, expanding the accessibility of BNPL to a broader array of shopping experiences.
Matt Schulz, a senior industry analyst, reflects on the trend of using BNPL services for grocery purchases as a telling sign of economic strain rather than financial empowerment. “The inclination to opt for buy now, pay later for essential items like groceries suggests a move born out of necessity rather than luxury,” Schulz comments. “The financial wiggle room for many is increasingly narrow, exacerbated by inflation, rising interest rates, and overall economic turbulence, reducing their margin for error even further.”

The Consumer Financial Protection Bureau has issued a caution regarding the burgeoning influence of BNPL services in the marketplace, pointing out potential risks these services may pose to consumers. In a report released in September, the agency revealed that five BNPL providers it scrutinized extended $24 billion in loans to consumers in 2021, marking a significant jump from 2019, with the figures almost tenfold higher.
Despite the inherent risks associated with BNPL programs—namely, the potential for consumers to struggle with managing repayments—Chris Walton, a former vice president at Target and now co-CEO of OmniTalk, who also advises Sezzle, believes these services can be a prudent approach to budget management. “From the consumer’s viewpoint, it represents a more intelligent utilization of credit,” Walton asserted. He had anticipated the expansion of BNPL into various sectors, including groceries, in a 2017 opinion article, attributing its current proliferation partly to the economic climate while emphasizing its efficacy for both consumers and retailers if the financial dynamics are favourable.
Neil Saunders, the managing director of GlobalData Retail, views the increasing utilization of BNPL services for grocery purchases as evidence of their growing acceptance among consumers, facilitated by a desire to spread out payments over time. This trend, according to Saunders, also underscores the impact of inflation on consumers. “The absence of stigma around BNPL signifies its normalization in consumer behaviour,” Saunders observed. However, he expressed concern about the repayment of debts incurred through such services.
Saunders further noted that while the default risk associated with BNPL schemes exists, it shouldn’t be the grocery sector’s burden to critique consumer financing choices. He argued that the introduction of loan services within the food retail sector highlights the imperative for retailers to ensure affordability without imposing judgments on payment methods. “It’s a matter of personal choice how people finance their purchases. It would be inappropriate for grocers to limit payment options based on presumptions about long-term affordability,” Saunders concluded.


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