The U.S. online grocery market finished February with total monthly sales of $7.9 billion, down 10.5% compared to 2023, according to the most recent Brick Meets Click/Mercatus Grocery Shopper Survey. Lower average order values (AOV) were the central catalyst driving the downward year-over-year sales trends as ship-to-home dropped 15.4% and pickup fell 12.8%. Delivery, the only method to expand sales, was up 4.7%, aided by a strong rebound in monthly active users (MAUs) vs. last year.
“Convenience remains one of the primary motivations for shopping online for groceries, however, for some customers, cost considerations are now weighing more heavily on their decision on how to shop,” says David Bishop, partner at Brick Meets Click. “This means that the explicit costs associated with e-grocery services are more likely to impact how these customers grocery shop, whether that’s returning to in-store or shifting where they shop online.”
"Although regional grocers may not always be able to match the low prices offered by mass merchants like Walmart, they can capitalize on customer insights to refine their service offerings," says Mark Fairhurst, global chief growth officer at Mercatus. "By using data to understand customer behavior, regional grocers can personalize shopping experiences, offer targeted savings, and ultimately, provide value that goes beyond pricing. This strategic use of customer data is essential for regional grocers to differentiate their services and maintain customer loyalty in a highly competitive market.”
Key takeaways:
- During February, the weighted AOV across all receiving methods fell 10% compared to 2023. No method was spared from the AOV downturn. Ship-to-home and pickup both fell 13% and delivery contracted by 7% vs. last year. Most retailers and formats also experienced lower AOVs vs. last year to varying degrees.
- In contrast to the spending downturn, all three receiving methods expanded their respective MAU bases. These across-the-board gains were driven by an increase in the share of MAUs who received orders via multiple methods during the month as the overall user base slipped slightly, down 30 basis points (bps) compared to the prior year. Delivery, however, posted a significantly stronger expansion than either pickup or ship-to-home due to easier comparisons vs. last year.
- While the total volume of e-grocery orders was essentially flat on a year-over-year basis, delivery’s strong performance offset the order volume declines experienced by the other two methods.
- Due to the shifts in segment order volume and the overall declines in AOV, pickup’s share of e-grocery sales contracted to 43.4% in February, falling by 468 bps compared to last year. Meanwhile, delivery expanded its share by 570 bps, finishing the month with 39.3%. Ship-to-home ended February with 17.3% of e-grocery sales, down 102 bps vs. 2023.
- During February, the composite grocery and mass repeat intent rate for pickup and delivery fell 850 bps vs. 2023 to 56.2%, dropping to one of the lowest levels reported in over two years.
- Mass continues to outperform grocery as the gap between their respective repeat intent rates reached a record high of more than 20 percentage points, driven by a dramatic slide in grocery’s repeat intent rates compared to February 2023.
