Online grocery sales fall in July despite customer growth
U.S. online grocery market sales contracted 7% year-over-year in July 2023.
According to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey, the U.S. online grocery market posted $7.2 billion in total sales, down 7% from $7.2 billion compared to the same month the prior year. This decreas occurred even as the overall monthly average user (MAU) base continued a growth trend, with the number of households buying groceries online rising 5% year-over-year.
A more than 7% year-over-year increase in the pickup MAU base drove overall MAU growth. The ship-to-home MAU base remained flat, while the delivery MAU base shrank 1%.
[Read more: Where are online grocery shoppers going?]
Order frequency by active shoppers falls
Order frequency, which dropped 10% year-over-year, was the main contributor to the monthly sales decline, reducing the total number of online orders by nearly 6%..
Delivery, which plummeted 13% compared to the same month the prior year, accounted for almost three-quarters of the total drop in online orders, while pickup dipped by 3% and ship-to-home by 2%.
Active shopper spending slips
The average order value (AOV) dropped approximately 1.5% versus July 2022. Delivery climbed less than one-half of one percent, and ship-to-home, which has the smallest AOV, posted a 1% gain year-over-year. Neither of these gains was large enough to significantly offset the 2% dip in pickup’s AOV.
Mass and grocery formats perform differently.
The mass grocery vertical experienced a surge in customers, while the grocery vertical experienced only a modest gain in MAUs compared to July 2022.
While order frequency declined for both formats, the drop for grocery was much greater than for mass. In addition, the average order value for grocery dipped by more than 5% while mass finished up very slightly.
"To drive continued engagement, regional grocers need to offer their customers value for their money and more convenient ways they can save, such as encouraging repeat purchases with promotional offers and easy-to-use digital coupons,” said Sylvain Perrier, president and CEO, Mercatus. “Loyalty programs should be thoughtfully integrated so that rewards are easily accessed and prominently positioned to remind customers of the monetary value they’re receiving."
"July’s results reflect the growing financial challenges many consumers are facing today,” said David Bishop, partner at Brick Meets Click. “These challenges along with evolving expectations, driven by experience engaging with Mass, are contributing to the growing gap between conventional grocers and their Mass rivals."
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 July 29-30, 2023, with 1,795 adults, 18 years and older, who participated in the household’s grocery shopping.