Online grocery sales rise 7% year-over-year in August
Online grocery sales increased notably in August 2024 compared to a year ago, reaching just shy of $10 billion.
According to the Brick Meets Click/Mercatus Grocery Shopper Survey fielded Aug. 30-31, the U.S. online grocery market ended the month with $9.9 billion in sales, a 7.0% increase over last year as all three fulfillment methods posted year-over-year sales growth.
Delivery increased 10.2% versus last year to $3.9 billion, led by a “continued surge” in the number of monthly active users (MAUs). Ship-to-home grew 8.9% year-over-year in August to $1.8 billion as significantly higher average order values (AOV) more than offset flat MAU growth and a drop in order frequency. Pickup finished the month up 3.5% to $4.3 billion as moderate MAU expansion countered a decrease in order frequency and AOV finished up by 3.5% compared to last year.
“Achieving growth will only get more challenging for grocers that don’t have a competitive offering or ways to offset the discounts,” said David Bishop, partner at Brick Meets Click. “Converting a customer into a member/subscriber motivates them to buy more frequently, especially given that most firms are promoting ‘free’ delivery. Even though there’s a cost to join, explicit fees are an on-going source of friction that many shoppers want to avoid.”
[READ MORE: July online grocery sales rise, led by delivery]
Compared to August 2023, Brick Meets Click said delivery and Walmart were the primary beneficiaries of promotional activities and have experienced larger gains in their respective MAU bases than the general trend. While the MAU base for overall online grew by 6% year-over-year in August, delivery’s MAU base expanded by nearly 16% (almost three times faster than pickup’s MAU base), and Walmart’s MAU base expanded by approximately 9% compared to last August.
The share of U.S. households that primarily shop for groceries at Walmart, either in-store or online, increased to approximately 30% in June – August 2024, up by 130 bps versus March – May 2024. Brick Meets Click said households that chose Walmart as their primary grocery retailer were already more likely to buy groceries online, and now the difference between Walmart and supermarkets has “widened even further on that metric”. When households buy groceries online, Walmart’s primary customers are increasingly likely to do so from Walmart as well.
Compared to last year, delivery sales grew by 16.1% during the June – August 2024 period versus just 0.6% during the March – May 2024 period. The main growth drivers between the two three-month periods included expansion of delivery’s MAU base, which increased by 13.9% year-over-year during June - August versus 4.6% during March – May, and rising order frequency, which climbed 14.9% year-over-year versus a decline of 2.2% in the prior three-month period.
“We know regional grocers are facing increased competition from retail giants like Walmart and Amazon, who can leverage huge pools of CPG ad monies to sustain aggressive promotions and capture more share of the online business,” said Mark Fairhurst, chief growth officer at Mercatus. “Regional grocers should play to their strengths in fresh foods, private label, and convenient locations while investing in targeted promotions that resonate with existing customers. Creating stronger customer connections via relevant, personalized engagement is vital for building loyalty and competing digitally today.”
Brick Meets Click conducted the most recent survey on August 30-31, 2024, with 1,829 adults, 18 years and older, who participated in the household’s grocery shopping, and a similar survey in August 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.
