Online grocery sales take a dip in September

U.S. online grocery sales chilled in September after heating up in August.

According to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey, the U.S. online grocery market posted $7.5 billion in sales during September 2023, down 3.1% year-over-year (YoY). Online grocery sales have seesawed in the U.S. during the past few months, rising 8.7% YoY to $9.3 billion in sales during August 2023 following a down month in July 2023, when online grocery sales fell 7% YoY.

Order frequency drives down sales

According to the survey, most of the sales decline was driven by contractions in order frequency as the average number of orders per monthly active user (MAU) fell 8% YoY to 2.31, the lowest order rate since the COVID-19 pandemic disrupted grocery shopping patterns in early 2020.

While September’s order frequency remains above pre-COVID-19 levels, it was only about 14% higher than the 2.03 orders per month posted in August 2019.    

The survey indicates that this drop in overall order frequency resulted from shifts in shopper behavior. The share of MAUs who completed only one order during the month jumped to nearly 37%, the highest level since before the COVID-19 pandemic. At the same time, the share of MAUs making three or more orders contracted 3.7 percentage points on a year-over-year basis, continuing a downward trend which Brick Meets Click and Mercatus also observed between 2022 and 2021. 

Mass retailers experienced a 4% decline in order frequency among its MAU base, while Amazon’s pure-play segments dropped 7% and supermarkets order frequency fell nearly 13% YoY in September versus a year ago.   

More households place orders

All three receiving methods tracked by the survey, pickup, delivery, and ship-to-home, experienced growth in their respective MAU bases as the total number of households completing at least one order during the month jumped almost 11% compared to September 2022.

This jump drove a nearly 2% gain in total order volume. The supermarket MAU base expanded by just under 1%, while the mass MAU base, led by Walmart, surged 20% YoY.

Pickup posted its highest household penetration to date during September, climbing to 59% of MAUs, driven by increased reach in all households but the youngest (under 30) age group. Meanwhile, delivery and ship-to-home both experienced contractions in penetration YoY, finishing at 39% and 40% respectively.

Average order value slips

The overall average order value (AOV) fell almost 5% as MAU spending per order across all three receiving methods was constrained compared to the prior year. Pickup posted the largest AOV decline, while ship-to-home dropped slightly, and delivery remained flat versus September 2022.

Supermarket AOV held steady YoY while mass AOV was down 9%. However, the survey noted that mass AOV performance was likely impacted by the dramatic growth in its MAU base as new customers typically spend less than more established ones.

Pickup picks up sales share

While delivery and ship-to-home both contracted in sales share, slipping to 34.9% and 16.7% respectively in September 2023, pickup sales share climbed 1.1 percentage points to 48.4% for the month.

“Both pickup and Walmart are growing share in today’s market for a range of reasons,” said David Bishop, partner at Brick Meets Click. “Each helps customers who are searching for ways to save money while pickup provides more flexibility as to when an order is received by the customer compared to delivery.”

“Motivating customers to shop with you again online may be challenging – especially when many households are trying to stretch a buck – but attracting new ones is even harder,” said Sylvain Perrier, president and CEO, Mercatus. “To compete more effectively, in addition to promoting more types of money-saving offers such as loyalty rewards, bundled deals, or other promotions, grocers can emphasize the quality, service, and convenience they offer that big-box retailers don’t.”

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 Sept. 28-29, 2023, with 1,754 adults, 18 years and older, who participated in the household’s grocery shopping.