TOP TAKEAWAYS
- Total grocery sales were down 1.8% in the first six months of 2023
- Pick-up sales were up 1.3%
- Delivery sales were down 2.0% and ship-to-home sales fell 9%
The U.S. online grocery market is down 1.2% when compared to last year’s total sales, according to a joint report from analytics firm Brick Meets Click and ecommerce technology software company Mercatus.
The June 2023 data reports that last year, the U.S. online grocery sales totaled $7.2 billion. When broken down, pick-up orders totaled $3.4 billion, delivery orders were $2.5 billion, and ship-to-home was $1.3 billion.
This year, U.S. online grocery sales totaled $7.1 billion. Pick-up orders totaled $3.5 billion, delivery orders totaled $2.5 billion, and ship-to-home totaled $1.2 billion.
Online sales are up compared to last year, but there have been fewer orders, leaving the average order value withmixed results across the segments.
The number of shoppers placing their orders online increased by more than 1% in June, and the overall average order value compared to last year rose by 3%. Even with the increase, it was not enough to counteract the 5% drop in the average number of orders completed throughout June.
With the increase of monthly active users, nearly 70% gravitated towards one fulfillment method of the three offered to receive their online grocery orders, which is a .02% basis point increase when compared to the previous year. Pick-up’s penetration rose by 56% while ship-to-home’s fell by 41%, and delivery dipped by 39%.
Additional key trends from the report include:
- Pick-up sales rose 3.2% and accounted for almost 49% of all online grocery sales
- Sales were up due to an expansion of almost 4% of a monthly active users base, even with the average order value slipping
- Delivery sales declined 2.5% when compared to the data of June 2022
- A 5% contraction in monthly active users during the month drove most of the sales decline as delivery’s average order value increased by more than 7% vs. last year
- Ship-to-home sales experienced a 9.7% drop in sales, making just under 17% of all online grocery purchases in June when compared to last year
- Another factor for the drop was lower spending per order, falling at 1% on a year-to-year basis
Compared to last year, the overall repeat intent rate was 63%. The current overall rate is still down by more than 10 percentage points when compared to pre-COVID rates.
However, the report said that the “reward for keeping a customer engaged remains clear as the average order value for customers who used the same grocery or mass service four or more times in the last three months was 57% higher than the average order value for the service’s first-time customer in June.”
Altogether, online’s share of total grocery spending in June declined to 11.9% when compared to last year. The contribution from pick-up and delivery, excluding ship-to-home since not many supermarkets offer it, was down and finished at 10% compared to last year.
Total grocery sales were down 1.8% in the first six months of 2023. Pick-up sales were up 1.3%, delivery sales were down 2.0%, and ship-to-home sales fell 9%.
When compared to 2022-2023’s online grocery, year-to-date contribution to total grocery sales fell 12.3%.
Pick-up orders were the largest share of sales within the first six months, and are responsible for 47.1 % of all online grocery sales. On the other hand, delivery stayed the same at 35.9%, and ship-to-home dropped 16.9% for 2023.
“While ship-to-home declines and delivery has mixed results, pick-up’s stronger performance isn’t surprising as it is becoming more widely available and helps customers who want to shop online save money, which is certainly helpful in the current market,” said David Bishop, partner at Brick Meets Click in the report.
