E-Grocery Sales Reach $8.5B in April

The April U.S. online grocery market grew 4.4% vs. last year, driven by growth across all three receiving segments, as the monthly sales jumped to $8.5 billion, according to the most recent Brick Meets Click/Mercatus Grocery Shopper Survey.

Growth in spending, driven largely by ship-to-home, generated most of the year-over-year sales uplift as overall penetration held steady and order frequency slipped compared to a year ago.

“Delivery sales in e-grocery continue to benefit from significant interest and investment from third-party providers and Walmart,” says David Bishop, partner at Brick Meets Click. “One question related to this growth remains whether many of the newer customers who are attracted by the trial offers will behave like streaming subscription service users who choose to use one service at a time until the ‘free’ period expires, and then jump to the next special offer.”

“Given the recent shifts in consumer purchasing patterns, especially the increased flight-to-value and rise in cross-shopping between supermarkets and mass retailers, grocery executives need to lean on their technology partners to offer solutions that enhance the shopping experience, whether that’s online or in-store,” says Mark Fairhurst, chief growth officer at Mercatus. “Mass retailers, like Walmart and Target, have already invested heavily in their mobile apps, and are now tapping into emerging technologies like machine learning and AI to better predict and adapt to customer behavior in real-time.”

Key takeaways:

• Pickup sales for April grew 2.1% vs. last year. Higher spending levels accounted for the gains as the average order value (AOV) climbed while order volume dropped due to a combination of fewer monthly active users (MAUs) for the service, mostly from the over 60 age group, plus lower order frequency compared to a year ago.  
• Delivery sales climbed 4.3% compared to a year ago. Sales were aided by the expansion of its MAU base as penetration increased across all age groups. The growth in the user base helped drive-up order volume vs. April 2023 while AOV remained essentially unchanged. Delivery also benefited from increased focus by mass retailers on growing their first-party delivery services, assisted by each retailer’s respective membership or subscription program.           
• Ship-to-home sales posted a 10.2% gain in April compared to last year. The growth was primarily due to a substantial year-over-year increase in AOV, after rebounding from a dramatic drop in AOV in 2023 vs. 2022. Ship-to-home sales were also aided by moderate expansion of its MAU base; however, order frequency fell among ship-to-home MAUs, leading to a decline in order volume.
• Buoyed by the strong year-over-year growth, ship-to-home ended April with an 18.7% share of e-grocery sales, up 100 basis points (bps) vs. last year. The gain in share came from pickup, which saw its share of total sales fall to 43% from 44% in 2023 while delivery maintained its 38.3% share vs. a year ago.