U.S. online grocery sales down 1.2% in 2023 year-over-year

The  U.S. e-commerce grocery market edged down in 2023 amid a decline in order frequency by online grocery shoppers.

Online grocery sales totaled $95.8 billion in 2023, down 2% from the previous year and 1.8% on a two-year stack, according to the annualized results from the monthly Bricks Meets Click/Mercatus Grocery Shopper Survey. The multi-year analysis is based on more than 21,000 survey responses collected each year during 2021, 2022, and 2023 from adults, 18 years and older, who participated in the household’s grocery shopping.

The report cited a slowdown in order frequency by online grocery shoppers as the main reason for the decline. Order frequency among monthly active users (MAUs) contracted for the second year in a row in 2023. The average number of monthly online grocery orders completed (including all receiving methods) fell 6% versus 2022 following a 4% decline in the previous year. Contributing to the year-over-year contraction was an increase in the share of MAUs who made only one eGrocery order per month, which rose over 300 bps to 34% in 2023. 

Average order value (AOV), not adjusted for price inflation, rose 3.0% in aggregate in 2023 versus the prior year. Each receiving method posted year-over-year increases: delivery AOV grew by 3.0%, pickup increased by 2.6%, and ship-to-home rose 1.7% over 2022.

In terms of sales performance, the largest of the three segments, pickup, finished the year relatively steady versus 2022, growing its share of online sales by 56 basis points (bps) to 46.0% in 2023. Delivery, despite expanded availability due to increased competition among third-party marketplace providers, experienced a sales dip of 0.9% in 2023 versus the prior year but gained an additional 11 bps of sales share ending the year with 37%. Ship-to-home continued its annual contraction as sales slipped 4.9% on a year-over-year basis, leading to a 66-bps drop in sales share to 17%. 

“These annual results show that 2023 was very challenging for grocery retailing as higher prices chipped away at household purchasing power even though inflation has slowed considerably since its peak in 2022,” said David Bishop, partner at Brick Meets Click. “Despite the challenges, Pickup continues to prove its appeal to shoppers, even without the benefits of expanded availability and/or aggressive promotions that aided Delivery in 2023.”

Across the U.S. eGrocery market, price-value formats such as mass and hard discount experienced strong expansion in their respective MAU bases during 2023. In contrast, the supermarket format experienced a contraction. 

The average number of MAUs increased by 15% for mass and 12% for hard discount versus 2022 while the supermarket MAU base shrank by 4%.  

Cross-shopping rates between grocery and mass formats continued to increase in 2023. The percentage of households who bought groceries online from both grocery (supermarket plus hard discount) and mass during the same monthly period rose 150 basis points versus 2022. As a result, 30% of the grocery MAU base also shopped for groceries online with a mass retailer’s service during the same month in 2023.

 "As Walmart grabs market share through its price leadership and omnichannel strategies, regional grocers find themselves in a precarious position,” said Mark Fairhurst, global chief growth officer at Mercatus. To remain competitive, they must intensify their efforts in improving customer engagement, offering tailored personalization, and building loyalty. This strategic shift is not just about weathering the storm of price inflation and intense competition, but about thriving in it. By providing a shopping experience that is both seamless and highly personalized, grocery retailers can retain their existing customer base and gradually attract a wider audience."

The Bricks Meets Click/Mercatus Grocery Shopper Survey an ongoing independent research initiative created and conducted by Brick Meets Click and sponsored by Mercatus. Results were adjusted based on internet usage among U.S. adults to account for the non-response bias associated with online surveys. Responses are geographically representative of the U.S. and weighted by age to reflect the national population of adults, 18 years and older, according to the U.S. Census Bureau.