Online Q3 grocery sales see see big year-over-year decrease
Online grocery sales saw a notable year-over-year (YoY) dip during the third quarter.
For the 12-week period ended Sept. 20, online sales across 25 U.S. grocery banners dropped 13.5% compared to a year ago, with total order volume on a same-store basis down 16.8%, according to the latest data from Brick Meets Click. Of the 25 grocers in the eGrocery Performance Benchmarking analysis, only three posted an increase in same-store online sales YoY, which Brick Meets Click cites as evidence of the challenging retail environment.
The decrease in order volume was the result of a shrinking base of active customers overall, Brick Meets Click said. The number of customers who completed one or more online grocery orders in the third quarter of 2023 declined by 19.8% versus the same period in 2022. A comparison of retention rates for different customer cohorts in 2022 versus 2023 highlights that it is now more challenging for regional grocers to keep their online customers active.
In the quarter, the year-over-year drop in overall order volume was partially offset by the base of active customers completing more orders and spending more per order. These metrics grew 7.6% and 4.2% respectively in 2023 versus the prior year.
“Insights from this report reinforce that with customer acquisition growing ever more challenging, retention has become the name of the game,” said Sylvain Perrier, president and CEO of Mercatus, the sponsor of the study. “To drive growth, grocers must invest in strategies that increase basket size and the frequency of orders. Helping online customers to save time with personalization, discover new products through intelligent promotional pairings, and get more value for money, such as through loyalty programs, are just some of the ways to ensure customers stick around.”
Per Brick Meets Click’s most recent monthly online grocery sales report, online grocery sales were $8.2 billion in October, an increase of 5.0% YoY. The figures followed September sales of $7.5 billion, which was a decrease both compared to August of this year and September 2022.
“These eGrocery benchmarks are extremely valuable to regional grocers who want to better understand how their banners’ performance and key performance indicators (KPIs) compare,” said David Bishop, partner at Brick Meets Click. “This study not only helps grocers identify opportunities to improve, but also reveals the stark realities related to growing an online grocery business in a post-COVID environment where customers have greater access to and higher expectations for eGrocery shopping.”
In 2023, the eGrocery study analyzed 25 banners, representing sales across 1,224 physical stores in the U.S., who operate a first-party online grocery website and/or app.