U.S. online grocery sales showed impressive year-over-year (YoY) growth in August 2023.
According to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey, the U.S. online grocery market posted $9.3 billion in sales during August 2023, up 8.7% YoY. This followed a down month in July 2023, when online grocery sales fell 7% YoY.
Household demand for both pickup and ship-to-home was strong during the month, according to the survey, while delivery experienced a slowdown in order volume and mass grocery continued to attract many more customers than supermarkets.
Monthly active users grow in number
Consumer interest in buying groceries online remained strong as the August monthly active user (MAU) base expanded nearly 5% compared to a year earlier. MAU reflects households that completed one or more online orders received via pickup, delivery, or ship-to-home. According to survey analysis of the respective MAU bases for each of the three methods showed that ship-to-home expanded by over 9% and pickup increased by nearly 6%, while delivery was up less than 1%.
Order volume expands
The total volume of e-grocery orders placed during August 2023 grew 5% YoY, which Brick Meets Click said was driven almost entirely by the expansion of the MAU base rather than a change in order frequency by MAUs, which was essentially flat YoY.
Meanwhile, order volume growth was unevenly distributed. Delivery, the only method to post a decline in order volume, fell almost 5%, while pickup and ship-to-home climbed 9% and 10%, respectively, compared to August 2022. Survey results also revealed that Amazon’s pure-play segments (e.g., marketplace, Subscribe & Save) contributed significantly to ship-to-home’s strong performance as its order volume finished up over 10% higher YoY.
Sales share shows shifts
Driven by the uneven gains in MAU bases and average order value (AOV) for each receiving method, there were shifts in sales share across the market. Delivery lost sales share, losing 3.6 percentage points YoY to end August with 38% of total e-grocery sales. Pickup captured more than three-quarters of the share lost by delivery and finished with 45% of e-grocery sales, while ship-to-home ended with almost 18%.
Mass grocers, supermarkets trend differently
Trends for the two formats with the largest MAU bases, mass grocery and supermarket, continued to diverge from each other in two of three key performance indicators. The mass MAU base surged by almost 20% in August while supermarkets contracted by more than 10%. Similarly, order frequency for mass rose in the low single-digits but fell in the mid-single digits for supermarkets versus the prior year. AOV was the only metric where both mass and supermarkets reported comparable gains YoY.
“The combined average order value (AOV) for all three fulfillment methods grew 3% versus the prior year in August, which is below the current rate of inflation for the wider variety of grocery-related products that regional grocers often sell and extends beyond the Food-at-Home category,” said David Bishop, partner at Brick Meets Click. “For grocers, it is important to see the specific trends for each method."
“Online customer loyalty is increasingly elusive, and grocers should focus on creating more seamless experiences that keep shoppers – especially the first timers coming back,” said Sylvain Perrier, president and CEO, Mercatus.
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 Aug. 30-31, 2023, with 1,704 adults18 years and older who participated in the household’s grocery shopping.