The U.S. online grocery market showed contraction in year-over-year sales for the second straight month in June 2021, as in-store pickup gained momentum.
According to the latest Brick Meets Click/Mercatus Grocery Shopping Survey, the U.S. online grocery market generated $6.8 billion in sales during June 2021, down 23% year-over-year and 3% lower month-over-month, as ship-to-home sales totaled $1.5 billion and pickup/delivery reached $5.3 billion.
The overall sales decline, much like in May, was driven by decreases in the number of monthly active users (MAUs), order frequency, and spending per order. While the total market contracted, in-store pickup’s dominance continued to strengthen, and the degree of online grocery cross-shopping between grocery and mass retail services remained near all-time highs.
The ongoing independent research initiative, created and conducted by Brick Meets Click and sponsored by Mercatus, found that 63.5 million U.S. households bought groceries online in June, a 12% decline from June 2020. Monthly active users declined across all age groups, with the youngest (18-29 years old) and the oldest (over 60 years old) each dropping by more than 15%. Core customers (30-44 years old) dropped only 6%. Pickup’s monthly average user base jumped by almost 16% on a year-over-year basis, while delivery’s base declined 1% and ship-to-home’s base experienced a drop of 6%.
During June 2021, monthly active users placed an average of 2.7 online orders, down 6% from 2.89 orders one year earlier. The share of orders received via pickup grew nearly 20% on a year-over-year basis, capturing 42% of total order share as delivery and ship-to-home experienced two- and four-percentage-point drops in share, respectively.
This research also looked at the variation in how households shopped online for groceries by geo-coding responses via ZIP code into one of four market types based on population size. During June 2021, pickup regained the top share in large metro markets and once again became the dominant method across all four market types, growing monthly order share in all market types versus last year. In comparison, ship-to-home’s order share shrank across all market types, and delivery’s order share grew only slightly in the least populated markets on a year-over-year basis.
The June 2021 results also revealed that 33% of monthly active users received online grocery orders only via pickup; another 16% received online grocery orders only via delivery. Pickup’s overall usage rate for June 2021 was nearly five percentage points higher versus the prior year and over 23 points higher compared to August 2019.
Spending per order shrank as the weighted average across all three receiving methods declined nearly 7% in June 2021 versus a year ago, mostly driven by a drop in delivery’s average order value (AOV) that exceeded 11%. Compared to pre-pandemic spending levels, June 2021’s AOVs remained elevated, with delivery up 6%, pickup up 12%, and ship-to-home up 14% versus Aug. 2019.
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, jumped to 60%, up four percentage points compared to a year earlier. However, the repeat intent rate for mass retailers, like Walmart and Target, was almost nine percentage points higher on average compared to grocery’s repeat intent rate during June 2021.
The share of online customers who used both a grocery service and a mass retail service to buy groceries during the month exceeded 28% for the second straight month. Ongoing research illustrates how a mass rival could now be a grocery retailer’s primary competitor when it comes to online grocery, as the cross-over shopping rate was only 15% pre-COVID-19 in August 2019.
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 June 27-28, 2021, with 1,789 adults, 18 years and older, who participated in the household’s grocery shopping.