Despite growth in pickup service, online grocery sales declined 4.5% in January versus a month ago, the latest Brick Meets Click/Mercatus Grocery Shopping Survey found.
The U.S. online grocery market totaled sales of $8.5 billion last month, compared with $8.9 billion in December and down 8.6% from $9.3 billion in January 2021, strategic advisory firm Brick Meets Click reported Monday. The number of U.S. households that purchased groceries online during January 2022 held relatively steady at 69 million, just under December’s total and decreasing 1% from 69.7 million in January 2021.
Year over year, sales rose only in the click-and-collect channel, edging up about 2.5% to $4 billion in January. Delivery sales shrank 6.3% to $3 billion. Ship-to-home sales accounted for almost two-thirds of the overall online sales decline, dropping 28.6% to $1.5 billion, noted Barrington, Ill.-based Brick Meets Click, which focuses on how digital technology impacts food sales and marketing.
“These sales results show that circumstances connected to COVID continue to disrupt the way people shop, but in different ways than earlier in the pandemic,” according to David Bishop, partner at Brick Meets Click.
“Increases in COVID case rates no longer have the same effect on buying patterns, due in part to progress with vaccinations. The loss of financial assistance is another factor, since the economic impact payments and child tax credits that many households received in 2021 have ceased,” Bishop explained. “And if that’s not enough, many retailers altered store operations in January to address the labor shortages associated with COVID-related absences and a tighter labor market.”
Conducted Jan. 29 and 30 by Brick Meets Click, and sponsored by grocery e-commerce provider Mercatus, the study polled 1,793 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.
Weighted average order value (AOV) across online grocery receiving methods was virtually flat in January, dipping less than 0.5% year over year. AOV gained 2% for delivery during the month but fell 3% for pickup and sank almost 11% for ship-to-home, Brick Meets Click said.
By share, pickup represented 47% of online grocery sales in January, up five percentage points from a year ago, which Brick Meets Click attributed to a rise in monthly active users (MAUs) and order frequency. Delivery’s sales share inched up under a point to 35%, lifted by increased order frequency and spending per transaction. Share for the ship-to-home channel fell more than five points to 18%, a record low that’s over 20 points below pre-COVID levels (August 2019), Brick Meets Click said.
Nationwide, the number of MAUs receiving an online grocery order via pickup climbed 6% year over year through January, whereas MAUs were down 2% for delivery and 8% for ship-to-home fell.
MAUs placed an average of 2.7 orders monthly for January, 5% fewer than a year earlier but 33% higher than the pre-pandemic period, Brick Meets Click pointed out. The decrease reflects a pullback in ship-to-home order frequency, which dropped 36% compared with gains of 26% for click-and-collect and 10% for delivery.
Cross-channel shopping declined slightly. The share of supermarkets’ MAU base that also shopped online with mass merchants decreased two percentage points year over year to over 26% in January. Meanwhile, the likelihood that an online grocery shopper would use the same service again within the next month surged nearly four percentage points to 61% for January. Still, the mass channel held a seven-point edge over supermarkets, which gave up most of its gains achieved in December as repeat intent rate receded to 58%.
“Grocers have a clear opportunity to drive stronger repeat purchase behavior,” commented Sylvain Perrier, president and CEO of Toronto-based Mercatus. “In addition to providing a great customer experience, they also need to understand which loyalty drivers are unique to their customers and brand. When it comes to online grocery shopping, consider adding perks that cater to behavioral and emotional triggers, like offering a wider range of preferred pickup times or more frequent pickup time slots.”