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July online grocery sales hold steady

Order value and frequency decline, ship-to-home use rises, Brick Meets Click finds

Russell Redman

August 23, 2021

5 Min Read
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Overall U.S. online grocery sales dipped 1.5% month over month to $6.7 billion in July, even though the number of households buying groceries online grew nearly 5%.Kroger

U.S. online grocery sales fulfilled by delivery and pickup stayed level for the third straight month in July, even as the overall market dipped due to declined ship-to-home sales.

The latest Brick Meets Click/Mercatus Grocery Shopping Survey, released Monday, tallied $6.7 billion in online grocery sales for July, down 1.5% from $6.8 billion in June and a 4.3% decrease from $7 billion in May. Delivery and pickup sales in July totaled $5.3 billion — the same as in June and May — while ship-to-home sales (delivered by parcel services) fell by 6.7% to $1.4 billion from $1.5 billion in June and by 4.3% from $1.7 billion in May.

July’s sales decrease reflects lower spending per order and a “slight drop” in monthly order frequency, partially offset by an uptick in monthly active users, reported Brick Meets Click, a Barrington, Ill.-based strategic advisory firm focusing on digital technology’s impact on food sales and marketing.

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So far in 2021, U.S. online grocery sales have fallen in five of seven months — the market grew to $9.3 billion in both January and March — and sales have declined for four consecutive months, the study shows. Yet online grocery sales remain elevated compared with the pre-pandemic period, at 4.5 times more for delivery and pickup and 1.8 times more for ship-to-home than in August 2019, Brick Meets Click noted.

Related:Grocery Outlet to take e-commerce plunge

Conducted July 29 to 30 by Brick Meets Click and sponsored by grocery e-commerce provider Mercatus, the survey polled 1,892 U.S. adults who participated in their household’s grocery shopping and made an online grocery purchase in the previous 30 days.

“The July results clearly reinforce that online shopping has maintained a significant portion of last year’s gains, especially for pickup and delivery,” David Bishop, partner at Brick Meets Click, said in a statement. “But the surge in new COVID-19 cases during July appears to have impacted shoppers’ buying behaviors differently than at the onset of this crisis in 2020.”

Indeed, even as overall sales tailed off, the number of U.S. households buying groceries online in July — via delivery, pickup and ship-to-home — climbed to 66.5 million, up almost 5% month to month. That includes all age groups, with use of online grocery services rising the fastest (over 7%) among those ages 18 to 29.

After months of steady growth, pickup usage was down in July. Brick Meets Click said Monthly active users (MAUs) receiving online grocery orders via click-and-collect decreased three percentage points from June, whereas delivery and ship-to-home orders rose six points and four points, respectively.

Related:DoorDash delivery can now include products from multiple stores

On a weighted basis, average spending per order dropped over 5% in July from the previous month as average order value (AOV) fell and ship-to-home order share grew. Brick Meets Click said ship-to-home AOV shrank nearly 19%, and pickup/delivery AOV stayed roughly the same. Meanwhile, ship-to-home accounted for a bigger share of orders compared with June, squeezing the overall AOV top line in July since ship-to-home spending per order for typically is only half that of pickup and delivery orders.

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Concerns about the recent surge in COVID-19 nationwide may be pushing online grocery customers away from pickup and toward delivery, Brick Meets Click observed.

Ship-to-home’s share of monthly online grocery orders reached 34% for July, up almost three percentage points month over month. That came after total order frequency declined to 2.68 orders per MAU from 2.70 orders in June. Delivery performed well, while pickup lost five share points on a month-to-month basis, Brick Meets Click noted. Still, over four in 10 MAUs have placed three or more orders per month since January, stabilizing after peak COVID-19 levels in 2020, the research revealed.

“Although pickup continued to have the largest MAU base, share of orders and sales during July 2021, concerns about the Delta variant’s transmissibility may be motivating customers to temporarily shift away from pickup as a means of social distancing,” Bishop explained. “Even though many retailers have implemented ‘contactless’ tactics since last year, pickup in the U.S. still often involves some degree of human contact, such as when an employee puts the order in the customer’s vehicle. So, for some, choosing delivery feels like a better, safer option as we navigate this next wave of COVID.”

Repeat intent rate in July fell four percentage points to 56%. The latest measure, indicating the likelihood that a MAU will place an online grocery order in the next month with the service, stemmed mainly from an over four-point decrease among more-frequent customers, compared with a less than one point dip for first-time customers.

Though mass and discount retailers see higher customer satisfaction with their online grocery services versus supermarkets, grocers closed the intent rate gap nearly 50% to just over four points in July versus June, Brick Meets Click said. The share of online customers who used both a supermarket service and a mass/discount service to purchase groceries contracted three percentage points to 25% in July. During the month, fewer grocery customers shopped at mass/discount retailers other than Target or Walmart, as those two chains saw cross-shopping increase between June and July, the study found.

“Grocers should be thinking about near-term improvements that will set them up for ongoing success, as the monthly results reinforce that the online customer wants flexibility and convenience,” according to Sylvain Perrier, president and CEO of Toronto-based Mercatus. “Progressive retailers are reducing operational sources of friction, like the frustration and uncertainty associated with wait times. At the same time, grocers need to better understand their core customer so they can build more meaningful engagement that leads to increased share of wallet.”

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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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