Multiple factors drive down online grocery sales in May
U.S. online grocery sales dipped in May 2023.
The U.S. online grocery market finished May 2023 with $6.9 billion in total sales, down 3.4% compared to $7.2 billion in May 2022, according to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey fielded May 30-31, 2023.
According to the survey, the drop in overall online grocery sales for May 2023 was driven by a combination of fewer households buying groceries online during the month than the previous year, and a decline in the average number of orders placed by active shoppers.
Results were mixed across the three receiving segments covered by the survey. Pickup recorded the only year-over-year growth and captured its largest share of sales to date, climbing 9.1% and contributing 50.7% of total online grocery sales.
Ship-to-home fell 17% from May 2022 and accounted for 16.8% of online grocery sales during the month. This segment has continued to post weaker results each year since 2020. Delivery declined 11.7% compared to the same month the prior year, and its dollar share dropped nearly two percentage points to 32.5% for the month.
The overall base of monthly active users (MAUs) for online grocery contracted 5% as all three segments experienced pullbacks in their MAU bases. In addition, the share of MAUs who used only one receiving method in May 2023 rose nearly six percentage points year-over-year to 72%.
Most formats also experienced declines in their MAU bases during May 2023, with grocery falling nearly 2% and mass contracting by more than 5% compared to a year earlier, although the mass MAU base remained more than 40% larger than grocery’s.
Along with fewer households buying groceries online in May 2023, the survey indicates the average number of orders placed by MAUs fell 5% to 2.51 from May 2022, continuing a downward trend from the record high of 2.91 the survey recorded in May 2020, during peak COVID-19 pandemic.
In contrast to declines in the MAU base and order frequency, overall spending per order increased by nearly 8% in May compared to the prior year, largely due to higher prices for grocery products.
Looking at each segment, paverage order value (AOV) climbed almost 13% in May to $92, and delivery edged up 5% to $85. However, these gains were partially offset by lower AOVs in the ship-to-home segment, which slipped by a little more than 3% on a year-over-year basis. Comparing formats, the combined AOV for pickup and delivery for grocery grew almost 9%, and mass increased nearly 14% from a year earlier.
The overall decline in online grocery sales observed in May 2023 reversed the trend from April 2023, when Brick Meets Click and Mercatus reported a slight 0.9% year-over-year increase.
“The decline in order frequency is the result of the growing number of MAUs who placed only one e-grocery order during the month. This accounted for one-third of all active customers and caused headwinds across all the segments,” said David Bishop, Partner, Brick Meets Click.
"Given the decreasing number of online customers and the decline in repeat intent rates, it is imperative for regional grocers to gain a deeper understanding of their customers' evolving needs and effectively adapt," said Sylvain Perrier, president and CEO, Mercatus. "As customer expectations continue to rise, it is crucial for grocers to reassess their current service standards and ensure that the shopping experience aligns closely with these elevated expectations."
The Brick Meets Click/Mercatus Grocery Shopping Survey is an ongoing independent research initiative created and conducted by Brick Meets Click and sponsored by Mercatus. Brick Meets Click conducted the survey on May 30-31, 2023, with 1,792 adults, 18 years and older, who participated in the household’s grocery shopping.