Skip navigation
online-shopping.jpg Getty Images
The analysis also highlights the need for Supermarket operators to look at Walmart and Target separately when evaluating their Mass rivals.

Supermarkets’ online penetration slipped two percentage points in 2022 vs. 2021

The new report looks at household penetration, spending and order frequency for online grocery

A new report examining where and how shoppers choose to buy groceries online found that while the overall base of average monthly users in the U.S. has increased by nearly three percentage points, the online penetration of supermarkets declined by two points in 2022 compared to 2021 levels. The report, Profiling the Online Shopper: eGrocery Purchase Patterns in the U.S., dives deep into the four major grocery retail formats – supermarkets, Walmart, Target and hard discount – to analyze how household penetration, spending and order frequency for eGrocery orders have shifted between 2021 and 2022 by income and age groups. 

Conducted by Brick Meets Click and sponsored by Mercatus, the report analyzed more than 42,000 responses to the monthly Brick Meets Click/Mercatus Grocery Shopping Survey for 2021 and 2022 and found that on average during 2022, more than half of all U.S. households ordered groceries online each month, but only one-third of those active eGrocery shoppers purchased from supermarkets online.

“This analysis highlights the benefit to supermarkets of better understanding who their core online customer segments are, and the value that different shopper segments represent to them,” said David Bishop, partner at Brick Meets Click. “These findings provide evidence that can support recommending refinements to how supermarkets compete online – especially against the lower-priced leaders in the market.”

Persistent high inflation is contributing to changes in eGrocery shopper behavior at both ends of the income spectrum. The analysis found that households earning under $50K per year (over one-third of all U.S. households in 2022) were 25% more likely to shop online with Walmart compared to supermarkets. And, between 2021 and 2022 supermarkets’ reach into this income group contracted by 150 basis points (bps) while it expanded for Walmart by 210 bps.

This shift can be characterized as a “flight to value” as the most cost-conscious customers are attracted to the Every Day Low Price (EDLP) strategy that’s generally employed by Walmart and hard discounters like Aldi. During 2022, households earning under $50K per year accounted for only 30% of the online customer mix for supermarkets, and slightly less for Target, while they accounted for over 40% of the customer mix at Walmart and hard discounters. 

Households earning over $200K per year also made changes to find greater value. This group (slightly more than 10% of all U.S. households) was almost three times more likely to shop online with supermarkets compared to Walmart in 2022; however, Walmart gained ground with these shoppers, expanding its penetration by 210 bps while supermarkets lost 120 bps in 2022 vs. 2021.

Understanding the shift among households earning over $200K per year is vital for supermarkets because they are such valuable customers. On a monthly basis, households in this group spent 80% more online with supermarkets than those earning under $50K. In aggregate, these upper income shoppers generated over one-fifth of supermarkets’ online sales, which is comparable to the share generated by the lowest income group even though the upper income group makes up a considerably smaller portion of the supermarket online customer mix. 

“Customers who shop with supermarkets tend to do so because of the quality of products they can receive, rather than paying the lowest price,” said Sylvain Perrier, president and CEO, Mercatus. “So, identifying and improving aspects of the online shopping experience that matter more to the quality-conscious customer can help increase competitiveness in ways that are not focused solely on price.” 

The analysis also highlights the need for supermarket operators to look at Walmart and Target separately when evaluating their Mass rivals. Target and supermarkets have very similar customer mixes from an income perspective, but they differ significantly based on the age of the primary shopper, with Target attracting younger households. The youngest households (18-29 years old) are 36% more likely to shop online at Target compared to supermarkets, and the early-family formation households (30-44) are nearly 30% more likely to do so.

While lower prices may be driving some of supermarkets’ online customers to shift a portion of their eGrocery orders to lower-priced formats, a better shopping experience at Target is likely causing changes in purchase patterns for others. The analysis found that Target also expanded its penetration with the highest-income households in 2022 versus the prior year. In addition, the report documented that the rate of cross-shopping with both Walmart and Target increased year-over-year among supermarkets’ online customer base.


Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.