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Falloff in delivery pulls down April online grocery sales

Reduced order frequency, smaller active user base drive nearly 6% decrease in order volume, Brick Meets Click says

Russell Redman

May 9, 2022

5 Min Read
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The share of supermarkets’ active user base that also shopped online for groceries at mass merchants came in at 24.2% for April, down from 29% in March, Brick Meets Click reported.Target

U.S. online grocery sales in April dropped 6.9% month-to-month and 3.8% year over year after the market appeared to be rebounding from an early-year decline.

The online grocery market came in at $8.1 billion for April, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey, released Monday. April’s total was down from $8.7 billion in March and February, which marked an uptick following a 4.5% month-to-month decrease to $8.5 billion in January.

April’s drop-off reflects a 5.8% decline in total order volume that was fueled by lower order frequency and a slightly smaller base of monthly active users (MAUs), strategic advisory firm Brick Meets Click noted.

The downturn stood out most in the delivery segment. Brick Meets Click said delivery-related sales in April — representing nearly a third of the online grocery market for the month — fell almost 6% year over year and contributed about half of that decline. At the same time, the average order value (AOV) for delivery climbed 6% year over year to $84 in April, partially offsetting an 11% AOV decrease stemming from a MAU base that contracted almost 9% over the past year.

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Accounting for nearly half of April e-grocery sales, the pickup segment saw sales dip less than 3% from a year ago. Unlike the delivery and ship-to-home channels, pickup had a nominal drop in AOV of about 70 basis points to $81, which — combined with a 2% decrease in order volume — contributed to the year-over-year falloff in sales, according to Brick Meets Click. The MAU base for pickup shrank by less than 3% compared with a year earlier, though the channel’s order frequency among MAUs remained about the same. 

Related:Online consumers want assistance with grocery out-of-stocks

Ship-to-home, the smallest segment with just over 20% of the April online grocery sales, fell more than 3% year over year. Brick Meets Click cited a nearly 6% year-over-year decline in order volume as the chief reason for the drop-off, despite an almost 3% gain in AOV to $47. The advisory firm attributed the lower order volume in April to more than 2% shrinkage in the MAU base versus a year ago. MAUs also received 4% fewer ship-to-home orders during the month.

E-grocery sales accounted for 12.3% of total U.S. grocery sales in April, down slightly from 12.7% a year earlier, Brick Meets Click reported. Excluding ship-to-home — a service not offered by most conventional grocers — delivery and pickup sales for April combined for 9.6% of the overall grocery market, down about 30 basis points from April 2021.

Fielded April 28 and 29 by Brick Meets Click, and sponsored by grocery e-commerce specialist Mercatus, the study polled 1,746 U.S. adults who participated in their household’s grocery shopping and made an online grocery purchase in the previous 30 days. Delivery includes retailer and third-party services (e.g. Instacart, Shipt), while pickup includes in-store, curbside, locker and drive-up services. Ship-to-home sales cover online grocery purchases delivered by parcel couriers like Federal Express, UPS and the U.S. Postal Service.

Related:U.S. e-grocery sales hold steady for March

According to Brick Meets Click partner David Bishop, changes in U.S. consumers’ online grocery shopping habits reflect rising inflation.

“It’s no surprise that inflation is affecting where and how people shop online for groceries,” Bishop explained. “Some customers may now find pickup a more attractive service, since it can help them avoid the higher incremental costs associated with delivery, and others may choose to simply move more of their transactions back into the store.”

Currently, consumers appear more concerned about the impact of inflation than contracting COVID-19, Brick Meets Click observed. In analyzing responses from March and April 2022 related to a MAU’s most recent online order, the advisory firm found that mass retail customers were 34% more likely than supermarket customers to cite cost — i.e. not paying more than necessary — as the top factor in deciding where to buy groceries online. In terms of receiving online grocery orders, pickup customers who shopped as supermarkets and mass merchants were 18% and 11% more likely, respectively, to name cost as the chief consideration versus delivery customers.

Online grocery cross-shopping between the supermarket and mass retail channels in April rose over 40 basis points from a year ago but decreased on a month-to-month basis. The share of supermarkets’ MAU base that also shopped online with mass for groceries during the month came in at 24.2%, down from 29% in March and about 26% in February and January. 

Repeat intent — the probability of an e-grocery shopper to use the same service again within the next month — rose almost 8 percentage points year over year to nearly 63% in April. Brick Meets Click noted that, month to month, April’s repeat intent rate for mass merchants tailed off nearly three points but surged 50 points for supermarkets.

“With budget-conscious consumers naturally gravitating towards lower-cost online services like pickup, grocers need to find ways to offer these services profitably and remain competitive,” stated Sylvain Perrier, president and CEO of Toronto-based Mercatus. “Conventional grocers can take advantage of more efficient pick-and-pack practices. They can also use tiered pricing models and variable fee structures to offset the cost to serve while still providing a compelling pickup experience to customers.”

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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