May 2021: Total U.S. Online Grocery Sales hit $7.0 billion, down 16% vs prior year

Topline

The U.S. online grocery market finished May with $7.0 billion in sales,as 66.8 million households placed an average of 2.8 online grocery orders during the month, according to the  Brick Meets Click/Mercatus Grocery Shopping Survey* fielded May 28-30, 2021 .

“As the business laps very tough year-over-year comparisons, it is essential to put monthly performance into perspective and keep an eye on the big picture,” said David Bishop, partner and research lead, Brick Meets Click. “May’s results show the market retains 70% of the incremental gains generated versus the record COVID high of$9.3 billion, illustrating that much of the gain propelled by the pandemic has stuck around.”

The delivery/pickup segment captured $5.3 billion in sales (see chart below), accounting for three-quarters of total online grocery sales for May.

Key Findings & Insights: May '20 vs '21

According to the  May 2021 Brick Meets Click/Mercatus Grocery Shopping Survey, the 16% decline in total online grocery sales of May ‘21 over the same period in May ‘20 was driven by declines in several key performance indicators including monthly active users, order frequency, and average order value.

Despite these reductions, total online sales in May remained 3.5 times higher than pre-COVID levels (2.0 billion in total sales for Aug. 2019 per prior Brick Meets Click research).

Slightly smaller base of engaged households

Monthly active users dropped 12% from 75.6 million in May 2020 to 68.8 million in May 2021.

The respective monthly active user (MAU) bases for pickup and delivery both grew by more than 26% and 18% respectively versus last year while the MAU ship-to-home base remained essentially flat. Each month since Jan. 2021, pickup has continued to have the largest user base of the three methods.

Higher order frequency

Monthly active users placed an average of 2.80 online orders during May 2021, down slightly from the record high of 2.91 orders set one year ago.

Year over year, the share of orders received via the ship-to-home segment dropped more than 8 percentage points while pickup gained 3 percentage points and delivery picked up more than 5 percentage points and was the chosen method for receiving 37% of orders in May, illustrating its growing role in serving the needs of online shoppers.

More shoppers use only the pickup or delivery method

The May 2021 results revealed that nearly 30% of monthly active users received online orders only via pickup; another 17% received online orders only via delivery. Pickup and delivery are four and two points higher respectively than last May.

These results illustrate the importance of offering both services to remain relevant and better support the total addressable market.

AOV decline

Spending per online order dropped mainly due to the pantry loading that occurred in the early months of the pandemic. The weighted average order value (AOV) in May declined7% on a year-over-year basis but drop was driven largely by changes in delivery and pickup orders.

• Delivery and pickup spending per order decreased 14% to $77 vs. May 2020
• Ship-to-home spending per order increased 4% to $50 vs. May2020.

Repeat intent

The repeat intent rate,which measures the likelihood that a monthly active user will order again in the next month with the same grocery service, came in just under 53% for May, shrinking 4 percentage points from last year.

While capacity constraints are less of an issue this year, the continued growth of cross-shopping between grocery and mass merchandise is likely a contributing factor to the decline.

Increased online grocery cross-shopping

In May, the share of online customers who used both a grocery service and a mass retail service to buy groceries during the month climbed to a new high of 29% versus 15% pre-COVID Aug. 2019.

As cross-shopping climbs, expectations of grocery services are being affected by comparable experiences with mass retail services.

Sponsor Message & Appreciation

“May’s choppiness in online sales is to be expected as the country opens, and consumers shift spending to things like travel and food away from home,” said Sylvain Perrier, president and CEO, Mercatus. “It’s more important than ever that regional grocers focus on strengthening their competitive positioning and improving the customer experience. Retailers would benefit from segmenting their online shopper base, knowing their preferences and interests, and taking advantage of solutions that help personalize the experience and lead to larger baskets.”

We thank the team at Mercatus for their continued generous support of the May research wave.

About this Consumer Research

* The Brick Meets Click/Mercatus Grocery Shopping Survey is an ongoing independent research initiative created and conducted by Brick Meets Click and sponsored by Mercatus.

Brick Meets Click conducted the survey on May 28-30, 2021, with1,872 adults, 18 years and older, who participated in the household’s grocery shopping.

Results were adjusted based on internet usage among U.S. adults to account for the non-response bias associated with online surveys. Responses are geographically representative of the U.S. and were weighted by age to reflect the national population of adults, 18 years and older, according to the U.S. Census Bureau.

Brick Meets Click used a similar methodology in terms of design, timing, and sampling for each of the surveys conducted Apr. 26-28, 2021(n=1,941), Mar. 26-28 (n=1,811), Feb. 26-28, 2021 (n= 1,812), Jan. 28-31, 2021 (n=1,776); throughout 2020: Nov. 11-14 (n=2,067), Aug. 24-26 (n=1,817), June 24-25 (n=1,781), May 20-22 (n=1,724), April 22-24 (n= 1,651), and March 23-25 (n=1,601); and Aug. 22-24, 2019 (n = 2,485).