Buy now, pay later was supposed to be for big-ticket discretionary purchases. A new flat-screen TV. A designer bag. A piece of furniture that didn't quite fit the monthly budget but felt manageable in four installments.
It is no longer that.
A March 2026 LendingTree survey of more than 2,000 US consumers found that 25% of BNPL users have used installment loans to buy groceries — up sharply from 14% just one year ago. Fortune covered the survey findings with particular attention to what LendingTree chief consumer finance analyst Matt Schulz called the new reality: "As people struggle with inflation and other kinds of economic uncertainty, people are looking to things like BNPL loans to help them extend their budget."
That migration from luxury to necessity is one of the most consequential behavioral shifts happening in consumer finance right now — and it has direct implications for grocery retailers, food brands, and payments players embedded in the food-retail ecosystem.
The Numbers Behind the Shift
The surge in grocery BNPL correlates with well-documented economic pressures. PYMNTS reported that everyday essentials now account for a growing share of all pay-over-time activity, with consumers folding installment credit into recurring household obligations rather than treating it as an occasional bridge for larger purchases.
Gen Z leads the trend: one-third of Gen Z BNPL users have financed a grocery purchase, making it the fourth-most common BNPL category for that cohort, behind clothing, technology, and home décor. Nearly half of all Americans (49%) have now used BNPL in some form, and CBS News noted that the share using it for recurring necessities has been accelerating since 2025.
The timing is not coincidental. Grocery prices remain elevated relative to pre-pandemic baselines. As we reported this week on March CPI data, categories like eggs, beef, and coffee have diverged sharply from headline inflation — and new tariff pass-throughs on imported food products and packaging components are adding further pressure to shelf prices.
The Default Risk Hiding in Plain Sight
The concerning flipside of expanding BNPL access is what happens to repayment behavior when those loans fund non-discretionary essentials. When a consumer misses a payment on a TV, they still ate dinner that week. When they miss a payment on a grocery run, the calculus is different — and the risk of cascading missed payments is higher.
The LendingTree data bears this out. Forty-one percent of BNPL users reported making at least one late payment in the past year, up from 34% the year prior. NBC News noted that the delinquency problem is particularly pronounced among consumers who use BNPL for recurring essentials rather than one-off discretionary purchases. Those using it for essentials were more likely to pay interest (32%) than those using it for discretionary items (25%).
There's a credit-literacy layer to the problem as well: 62% of BNPL users incorrectly believe that on-time payments build their credit score. In reality, most BNPL services do not report positive payment history to credit bureaus, meaning consumers are building financial habits around a product that won't help them qualify for better credit later.
What This Means for Grocery Retailers
For grocers, the BNPL trend is both opportunity and cautionary signal.
On one hand, retailers that integrate BNPL at checkout — whether in-app, through third-party providers, or via private-label fintech partnerships — can capture conversions that might otherwise result in abandoned carts or smaller basket sizes. Payments Dive examined this dynamic at length, noting that grocers offering BNPL options have seen incremental basket-size growth from financially-stressed households.
On the other hand, the growing reliance on installment credit for essentials is a leading indicator of household financial stress that tends to presage reduced discretionary spending, trade-down behavior, and eventually lower overall basket sizes as consumers trim even staple purchases. Grocery retailers should be paying close attention to BNPL utilization rates in their payments data — not just as a revenue opportunity, but as a real-time read on how much financial room their core customers have left.
When one in four BNPL users is financing groceries, the larger message isn't about payments innovation. It's about household budgets that have run out of slack.