U.S. online grocery sales up 1.5% in February; order frequency falls

Growth in the user base and spending per order of online grocery sales helped offset the lowest order frequency since pre-COVID.

That’s according to the Brick Meets Click/Mercatus Grocery Shopping Survey, which reported that U.S. online grocery sales totaled $8.8 billion in February, up 1.5% compared to last year. Online’s share of total grocery spending fell 30 basis points to 12.9% in February.

Excluding ship-to-home sales, the core eGrocery segments of delivery and pickup slipped 1.2% compared to last year, with a drop of almost 9% in delivery sales and a gain of nearly 5% for pickup during the month.

The year-over-year growth in eGrocery sales was partly driven by an increase in monthly active users (MAUs), which climbed more than 5% in February compared to the same period in 2022. This marks the second straight year-over-year expansion of the user base as it grew over 10% between February 2021 and February 2022.

“The expanding user base for online grocery illustrates its growing reach, but the changing role it plays is evident from contractions in the use of multiple receiving methods and average order frequency, which mostly muted the gains in reach,” said David Bishop, partner, Brick Meets Click.

The number of orders completed by MAUs fell to its lowest level since the onset of the pandemic in March 2020, finishing the month of February at 2.49 and down almost 9% on a year-over-year basis.  

Mass vs. Grocery

Looking at specific formats, the mass channel continued to attract more customers on a year-over-year basis while grocery contracted again. In February, the mass MAU base surged more than 20% versus 2022 after a similar surge last month. In contrast, the grocery MAU base contracted in the mid-to-upper single digits for at least the second straight month. 

“The changes in the mass and grocery user bases illustrate what could be characterized as a ‘flight to value’ as shoppers deal with persistently higher grocery prices,” explained Bishop. “Another sign of inflation’s impact on eGrocery ordering patterns is the continued growth that pickup has experienced over the last few months while delivery has encountered a pullback in users.”

Since December 2022, pickup has steadily posted gains in its MAU base while delivery has reported declines. In February 2023, pickup service was used by 1.5 times more households than delivery.

In other findings, cross-format shopping between grocery and mass remained near 30% for the month and was up 300 basis points versus a year ago. The share of grocery MAUs who also bought groceries online from Walmart in the month climbed nearly five percentage points to almost 22%. In contrast, cross-shopping with Target declined by nearly 3 points.

“Given that ongoing price inflation is clearly influencing shopping behaviors, grocers should promote ways customers can save more money,” said Sylvain Perrier, president and CEO, Mercatus. “Grocery retailers can consider highlighting store brands, offering pricing promotions, creating personalized digital coupons, and implementing variable fee structures that lower fees for customers and reduce the cost to assemble.”