The U.S. online grocery market finally showed contraction in year-over-year sales in May 2021, but is still far ahead of rates before COVID-19.
U.S. online grocery sales totaled $7 billion in sales during May, down 16% from May 2020, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey. According to Brick Meets Click/Mercatus analysis, this drop in sales was driven by declines in several key performance indicators, including monthly active users, order frequency, and average order value.
Despite these reductions, total online sales during May 2021 remained 3.5 times higher than pre-COVID-19 levels ($2 billion in total sales for August 2019 per prior Brick Meets Click research).
The survey also found that 66.8 million U.S. households bought groceries online in May 2021, a 12% decline from May 2020. In addition, data reveals that during the pandemic year, the mix of online grocery fulfillment methods has shifted. Pickup maintains the top position, used by 55% of monthly active users in May, up over four percentage points from 2020.
In contrast, the share of monthly active users receiving grocery orders via delivery grew just more than one percentage point, while ship-to-home contracted six percentage points over the same time frame. Monthly active users placed an average of 2.8 online orders during May 2021, down slightly from the record high of 2.91 orders set a year earlier.
The May 2021 results also revealed that nearly 30% of monthly active users received online orders only via pickup; another 17% received online orders only via delivery.
Spending per order dropped, which Brick Meets Click/Mercatus analysis finds was mainly due to the pantry-loading that occurred in the early months of the pandemic. The weighted average order value (AOV) in May declined 7% on a year-over-year basis. Delivery and pickup spending per order experienced a 14% drop to $77, while ship-to-home spending per order increased 4% year-over-year to $50.
The repeat intent rate, which measures the likelihood that a monthly active user will order again in the next month with the same grocery service, shrank four percentage points compared May 2020, coming in just under 53%. While capacity constraints are less of an issue this year, Brick Meets Click/Mercatus analysis suggests the continued growth of cross-shopping between grocery and mass merchandise is likely a contributing factor to the decline.
In May, the share of online customers who used both a grocery service and a mass retail service to buy groceries during the month climbed to a new high of 29% compared to15% pre-COVID (in August 2019).
“As the business laps very tough year-over-year comparisons, it is essential to put monthly performance into perspective and keep an eye on the big picture,” said David Bishop, partner, Brick Meets Click. “May’s results show the market retains 70% of the incremental gains generated versus the record COVID high of $9.3 billion, illustrating that much of the gain propelled by the pandemic has stuck around.”
Brick Meets Click conducted the survey May 28-30, 2021, with 1,872 adults who participated in the household’s grocery shopping.