Online grocery sales fell again on a sequential basis in May, with the month-over-month decline nearly doubling from April’s decline, the strategic consultancy Brick Meets Click reported. .
The U.S. online grocery market totaled $7.1 billion in May, down 12.3% from $8.1 billion in April, when sales fell 6.9 % month over month, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey, released on Monday. April’s total was down from $8.7 billion in March and February, signaling a slight uptick after a 4.5% month-over-month decline to $8.5 billion dollars in January.
Year-over-year, online grocery sales in May edged up 1.7%, following declines of 3.8% in April and 6.5% in March, an increase of 8 .5% in February and a drop of 8.6% in January.
Growth in pickup and delivery sales helped fuel the online grocery market in May. Pickup accounted for 45% ($3.2 billion) of online grocery sales for the month, up 9% from a year ago, driven primarily by double-digit growth in the monthly active user (MAU) base for the click-and-collect service, Brick Meets Click says. A mid-single-digit rise in average order value (AOV) for pickup was offset by a nominal decline in order frequency during the month. Delivery accounted for a dollar share of 36% ($2.5 billion) in May, up 5% from a year ago, and saw more modest gains in MAU and AOV compared to the collection and a decrease of approximately 5% in the frequency of orders.
Meanwhile, door-to-door sales accounted for 19% ($1.4 billion) of online grocery sales in May, down 16% year-over-year as a drop of more than 10 % of AOV and a similar decrease in order frequency was only partially offset by a more than 9% gain in base MAU.
Conducted May 28-29 by Brick Meets Click and sponsored by grocery e-commerce specialist Mercatus, the survey polled 1,802 American adults who participated in household grocery shopping and made a grocery purchase online. line in the previous 30 days. Delivery includes retailer and third-party services (e.g., Instacart, Shipt), while pickup includes in-store, curbside, locker, and drive-in services. Door-to-door sales cover online grocery purchases delivered by package couriers like Federal Express, UPS and the US Postal Service.
Brick Meets Click noted that rising food price inflation is influencing where and how consumers shop online. As rising prices sap purchasing power, grocery store customers are looking for ways to avoid paying more than necessary when shopping online, explained the Barrington, Ill.-based consulting firm, which focuses on the impact of digital technology on food sales and marketing.
For example, 43% of retail and supermarket shoppers using pick-up or delivery in May cited cost as the primary criteria for retailer selection, up from 37% in August 2020, when customers were first surveyed. times on this issue. Notably, Brick Meets Click said, the share of mass shoppers who named cost as their top consideration remained relatively flat during this period, while the share of grocery shoppers citing cost as their top concern jumped more. by 10 percentage points.
“Less than a quarter of online grocery customers who shop with a grocery or mass online use both pickup and delivery services, so rising costs among this group may actually drive more demand toward pickup,” according to Brick Meets Click partner David Bishop. “Interestingly, for grocery store customers, the importance of ‘getting the products you want’ has shifted from first to last consideration when ranked against the elements of cost and convenience. And that goes for pickup and delivery services. »
Although also impacted by inflation, the retail channel saw 20% growth in its online grocery MAU base in May compared to the previous year, while the grocery chain’s MAU base supermarkets fell by more than 10%, Brick Meets Click said. Similarly, customers buying groceries online from mass retailers placed an average of almost 2% more orders in May compared to a year earlier, while grocery stores saw a 5% decline. % of order frequency.
AOVs for supermarkets and mass retailers rose year-over-year in May, but both tracked the general rate of grocery inflation, likely indicating fewer items in the basket, a underlined Brick Meets Click.
Another sign of inflation’s growing influence on online grocery shopping behavior is the high rates of cross-shopping. The share of the supermarket MAU base that also made bulk online purchases for groceries in May set a new record high of 33%, nearly four percentage points higher than the previous peak in December 2021.
In May, the repeat intent rate — the likelihood that an online grocery shopper will use the same service again within the next month — held steady at 63% in May and rose 10 points from compared to a year ago. Supermarkets narrowed the gap a bit in May, but mass merchants still had an eight-point advantage over the grocery retail channel in terms of repeat intent rate.
While higher cross-shopping rates may be temporary, grocery stores risk losing customers to mass retailers, according to the Online Grocery Shopping Survey.
“Customers appreciate the convenience of ordering online, but they’re also increasingly cost-conscious,” said Sylvain Perrier, president and CEO of Mercatus in Toronto. “So to defend the core business, grocers can promote pick-up to address both issues. Assuming the pickup experience meets customer expectations, highlighting the savings associated with lower pickup fees, no fuel surcharge, or no tipping can better protect your customers and sales by line by promoting a more affordable alternative to home delivery.