Members of Amazon’s premium service Amazon Prime bought slightly more of their online groceries at Walmart this year, making the retail giant the top online grocery retailer for the first time, according to market analyst Coresight Research.
The data analytics firm’s “US Online Grocery Survey 2023: Insights into Shopper Behaviors, Quick Commerce and Meal Kits” is an annual review of industry data points such as percentage of online spending, grocery delivery rates and trends in meal-kit subscription services.
The study found that 60% of Prime members made some of their online grocery purchases at Walmart, while 55.2% turned to Amazon. That’s followed by Target at 24.2%, Sam’s Club at 20.5%, Costco at 17.9%, Kroger banners at 16.3% and Whole Foods at 13.5%.
Walmart’s share of online grocery shoppers grew 9.3 percentage points year over year, with almost 60% of shoppers buying from the big-box retailer. Amazon ranked second but dropped 3.6 percentage points to 48% of shoppers.
Target also experienced a year-over-year decline in online shoppers, dropping 1.6 percentage points to 23.9%, but maintaining its position as the third largest in the survey. Target and Amazon were the only two retailers to see a decline in online shoppers from the previous year.
Meanwhile, Kroger ranked as the top pure-play grocer in the survey, capturing 15.8% of shoppers, an increase of 2.2 percentage points year over year.
Coresight attributed the trend of consumers expanding their online shopping habits to greater competition in the online marketplace, particularly from Walmart, which launched its own membership service, Walmart+, and its delivery service, Walmart Express, both in 2020.
“The increased competition has provided consumers with more options and led to a consistent decline in the percentage of Prime members shopping for groceries via Amazon,” the report noted.
Walmart’s online sales success is due to a high penetration of omnichannel shoppers, according to the report, which shows an approximately 2-to-1 ratio of in-store shoppers (71.6%) to online shoppers (36.1%). That’s compared to Target at 2.5-to-1, Sam’s Club at 2.1-to-1, Costco 2.6.-to-1 and Kroger banners at 2.8-to-1.
Aldi had the lowest penetration of omnichannel shoppers of the 15 grocers considered, with 28.9% of respondents saying they shop in-store and 7.4% online, for a ratio of 3.9-to-1.
The study also shows slowing growth in the U.S. online food and beverage markets, with sales up 15.1% year over year, compared to 16.5% growth in 2022. “Looking forward, we estimate that the food and beverage e-commerce penetration rate will increase to 9.1% by 2027, versus 6.1% in 2022, benchmarked to projected food retail spending data from the Bureau of Economic Analysis (BEA),” the report noted.
But online sales were up substantially for respondents who did all or most of their grocery shopping online. That statistic jumped to 41% this year, compared to 28.3% in 2022. Delivery of those groceries was also more popular among shoppers, at about 50% versus those who picked up their orders at 47%, the report noted.
Online shoppers were also inclined to try a meal kit service over the last year, with 42% reporting that they had at least tried one. That market was led by HelloFresh, which captured 59.3% of subscribers.