The base of online grocery shoppers grew in July, but e-grocery sales continued to decline in all categories, according to the Brick Meets Click/Mercatus Grocery Shopping Survey released Wednesday.
Online grocery sales dropped last month, with grocers reporting $7.2 billion in total U.S. sales, down 7% from the same time last year, the report noted.
The survey of 1,795 adults, conducted July 29-30, also revealed that the number of customers doing their shopping online jumped nearly 5%, compared to the same period in 2022, but declining order frequency and constrained spending per order led to the year-over-year sales slump.
The increase in monthly active users was driven entirely by a 7% year-over-year increase in shoppers opting to pick up their groceries purchased online. The number of monthly active users in the ship-to-home category remained relatively flat in July, compared to last year, and those in the delivery category dropped 1%.
A decline in order frequency was the primary cause of online sales dropping for the month, with a 10% reduction in orders from a year ago, according to the report. That resulted in a 6% decline in orders for the month, with delivery online order frequency dropping a massive 13% year over year. Order frequency for pickup and ship-to-home dropped 3% and 2% for the month, respectively.
The average order value was down 1.5% year over year in July, which was driven by a 2% dip in the pickup category. Delivery was down less than half a percent, and ship-to-home ticked up by 1%, compared to last year.
“July’s results reflect the growing financial challenges many consumers are facing today,” said David Bishop, partner at Brick Meets Click, in a statement. “These challenges along with evolving expectations, driven by experience engaging with mass, are contributing to the growing gap between conventional grocers and their mass rivals.”
The report noted that market share shifted slightly in online grocery sales for the month, relative to 2022, with pickup and ship-to-home gaining about 1 percentage point to 45% and 19%, respectively, while delivery dipped nearly 2.5 percentage points to 36%.
The mass retail category enjoyed a surge in customers for the month, but like in grocery, order frequency was down.
“Much of the monthly gain for mass can be attributed to a strong improvement in its repeat intent rates for delivery,” the report noted.
The total share of spending for online orders, relative to other methods of buying groceries, dropped 130 basis points for the month to 13.2%.
“To drive continued engagement, regional grocers need to offer their customers value for their money and more convenient ways they can save, such as encouraging repeat purchases with promotional offers and easy-to-use digital coupons,” said Sylvain Perrier, president and CEO of Mercatus, in a statement. “Loyalty programs should be thoughtfully integrated so that rewards are easily accessed and prominently positioned to remind customers of the monetary value they’re receiving.”