July online grocery sales rise, led by delivery
Online grocery sales saw a large year-over-year increase in July, reaching nearly $8 billion.
According to the monthly Brick Meets Click/Mercatus Grocery Shopper Survey fielded July 30-31, 2024, the total U.S. online grocery market ended July 2024 with $7.9 billion in monthly sales, a 9.2% increase over last year. Delivery sales surged 22% in July, aided by ongoing promotional efforts. Ship-to-home also posted strong results, climbing 6%, and pickup remained steady year-over-year.
The increase in total sales came on the heels of a strong June for online grocery, when sales rose 8% year-over-year.
Delivery’s gains in July were fueled from ongoing efforts by key players to grow their delivery businesses over the last several months. Brick Meets Click says that Walmart promoted a 50% discount on its Walmart+ membership in mid-July that lowered the annual fee from $98 to $49 after offering the same deal in May, and Instacart promoted an 80% discount on its annual membership. Both offers are contributing to growth in Delivery users and order frequency.
“Walmart and Instacart aren’t the only players using deep discounts to boost delivery demand,” said David Bishop, partner at Brick Meets Click. “Amazon, for example, in July offered a 90-day free Prime membership trial instead of the usual 30 days, along with unlimited grocery delivery. Similarly, DoorDash and Uber Eats are maintaining low or no delivery fees to increase their market share."
Both supermarkets and mass saw year-over-year increases in their monthly active users (MAU) bases in July. Supermarket’s base grew twice as fast as last year, up about 7%, and mass posted a nearly 8% increase. Trends across the three receiving methods were mixed. Delivery’s MAU base grew by more than 10% versus last year, while ship-to-home’s expanded by almost 4%, and pickup’s shrank slightly, down by less than 2%.
Overall online grocery order volume for July 2024 rose approximately 5%. Delivery orders surged nearly 20% in the month, due to both more users and more frequent ordering by those users. Pickup order volume fell 3% year-over-year due to lower order frequency among a shrinking MAU base. Growth in the ship-to-home user base offset a dip in order frequency, resulting in a 2% rise in order volume during the month.
[READ MORE: Walmart breaks record with Q2 online grocery share]
“Intense competition in grocery delivery promotions is eroding regional grocers' control over customer interactions,” said Mark Fairhurst, chief growth officer at Mercatus. “While third-party marketplaces may boost short-term order volume gains, they also make it harder for grocery retailers to achieve the economies of scale needed to reduce operating costs. I’m not sure many grocers would jump at the opportunity to put a farmer’s market in their store parking lot, yet many are willing to do something similar when it comes to relying on marketplaces for their online business.”
The Brick Meets Click/Mercatus Grocery Shopping Survey is an ongoing independent research initiative created and conducted by the team at Brick Meets Click and sponsored by Mercatus.
Brick Meets Click conducted the most recent survey on July 30-31, 2024, with 1,760 adults, 18 years and older, who participated in the household’s grocery shopping, and a similar survey in July 2023. Results are adjusted based on internet usage among U.S. adults to account for the non-response bias associated with online surveys. Responses are geographically representative of the U.S. and weighted by age to reflect the national population of adults, 18 years and older, according to the U.S. Census Bureau.
