Online ordering took a dip last month as e-grocery sales in August reached $8.5 billion, 1% less than a year ago, according to a Brick Meets Click/Mercatus Grocery Shopping survey conducted Aug. 29-30. As inflation for food at home continues to rise, challenges continue for grocers to keep pace with mass merchandisers and dollar stores reporting larger user bases.
Shifts in the way households shop online for groceries, however, have changed the competitive landscape. Online grocery sales quadrupled to $8.2 billion in August 2020 from pre-COVID levels, but have since stabilized at even higher levels, finishing at $8.6 billion for August 2021 and $8.5 billion for August 2022, the Brick Meets Click/Mercatus survey found.
“The COVID pandemic motivated trial of delivery and pickup services at a scale that no one could have predicted,” said David Bishop, partner at Brick Meets Click. “And, as the pandemic evolves, it’s increasingly clear that many households find online grocery shopping an acceptable option to complement their new in-store shopping behaviors.”
The three online grocery segments—pickup, delivery and ship-to-home—all saw an increase as a result of COVID, with delivery showing the most growth year over year, the survey found.
In August, grocery’s monthly active users (MAUs) dropped by 1% compared to 2021, according to the survey. Still, though, over 68 million households went online to buy at least one grocery order via delivery, pickup or ship-to-home—up 23% from 2020 and 116% compared to 2019, the Brick Meets Click/Mercatus survey found.
There's evidence that inflation is influencing where and how customers shop online.
Overall grocery spending in August was up 14% compared to a year ago as households reported spending just over $200 during the most recent seven-day period, the Brick Meets Click/Mercatus survey found.
In search of deals, the share of online grocery shoppers ordering from both conventional grocery stores and superstores increased in August.Online orders from mass merchandisers saw a 7% gain from MAUs. Dollar format stores, which have a significantly smaller MAU base, also reported a gain of over 70% versus 2021. But grocery online orders fell flat.
At a time when every penny counts for shoppers, grocery retailers are being challenged to find new ways to bridge this gap.
“The strategies that mass retailers use are difficult for most grocery retailers to imitate for various reasons,” said Sylvain Perrier, president and CEO of Mercatus, in a statement. “Price inflation plays to their competitive advantage, but only up to a point as online shopping still is about convenience. Conventional grocers should emphasize the cost savings and convenience of their pickup services. At the same time, consider implementing a variable service fee structure that offers customers more control over the extra costs and grocers better ways to lower costs through operational efficiencies.”
The Brick Meets Click/Mercatus Grocery Shopping Survey collected data from 1,755 U.S. adults who participate in their household’s grocery shopping.