Shopper interest in online grocery remained strong in February, with the total U.S. market generating $8.7 billion in sales in the month for a gain of 8.5% vs. the same period a year ago, according to Brick Meets Click/Mercatus’ Grocery Shopping Survey.
Pickup, the largest segment of e-grocery, grew 6% vs. a year ago, generating $4 billion in sales and accounting for 47% of the total sales during the month. Delivery, which includes first- and third-party providers, meanwhile, reported a year-over-year gain of 37% for $3.2 billion in sales, capturing 37% share of e-grocery spending.
Ship-to-home, which includes orders that are received via common or contract carriers such as FedEx, UPS and USPS, was the largest segment pre-COVID with 40% of spending, but it is now the smallest with just 16%; ship-to-home finished with $1.4 billion in sales, down 24% year over year.
“New service providers, a broader range of retailers selling grocery-related products online, and services targeting faster cycle times contributed to delivery’s strong sales growth, but even so, more shoppers still prefer pickup for range of reasons that will benefit this service model going forward,” said David Bishop, partner with Brick Meets Click, an analytics and strategic insight firm based in Barrington, Ill.
Overall, 68 million households bought groceries from a wide variety of providers and retail channels—nearly 11% higher than last year’s monthly active user (MAU) base—and while order frequency was also up (3% vs. a year ago as MAUs completed 2.73 orders in the month), spending per order was down by more than 2%. Given the recent and significant uptick in price inflation, Brick Meets Click/Mercatus said in a release that this suggests a reduced number of items in the basket.
The survey found ship-to-home was the main contributor to the overall spending decline, with average order value (AOV) falling more than 25% to under $40 in February, while pickup’s AOV declined by less than 4% and delivery’s AOV grew by 12%.
The share of grocery’s MAU base that cross-shopped online with mass merchandisers in February increased 1.3 percentage points vs. last year, finishing at almost 26%. And, for the second time in the past several months, grocery’s specific repeat intent rate overtook the mass repeat intent rate.
"Today, customer expectations for online grocery shopping are different than they were even a year ago, not to mention before COVID," said Sylvain Perrier, president and CEO of Toronto-based Mercatus, said in a release. "To grow their online share of wallet going forward, conventional grocers need to find ways to better satisfy those changing expectations. Inflationary pressures suggest retailers should look at optimizing online meal planning, showcasing store brands, and encouraging repeat customers to take advantage of online loyalty discounts."
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 Feb. 26-27, with 1,790 adults (18 years and older) who participated in the household’s grocery shopping. This research is scheduled to run monthly through 2022.