eGrocery Benchmarks Part 1: 6.8% drop in online sales for Conventional Grocers YOY

Top Line

Conventional grocers reported a 6.8% drop in online grocery sales on as same-store basis during the 12 weeks ending September 28, 2021, versus the prior year, according to the Brick Meets Click eGrocery Performance Benchmarking 2021 Wave. A 3.1% decrease in orders combined with a 3.9% decline in the average order value contributed to the drop in sales on a year-over-year basis.

“We know from our monthly eGrocery shopping survey that Mass is driving the online grocery sales gains in the broader U.S. market,” said David Bishop, partner at Brick Meets Click, “so benchmarking is incredibly valuable because it enables Grocery retailers to compare their performance versus their peers to identify improvement opportunities.”

The recently completed research, sponsored by Mercatus, Hussmann, and Cardlytics, resumed the benchmarking initiative that Brick Meets Click started in2016 but paused in 2020 due to the pandemic. Based on online transactional data linked to non-personal identified households across nearly 950 stores from 45 U.S. banners, the study is the largest independently conducted online grocery benchmarking initiative completed to date.

Key Findings & Insights: Part 1

The first of the initiative’s three reports was just published and focuses on Topline Performance Findings, including key causal factors that can impact performance, such as how long a service has operated, what services are offered by each store, and where the store operates. Among the findings:

Age of online operations did not significantly impact overall performance. The 7% of locations that had operated their online grocery services for less than a year did not report significantly lower sales compared to stores with longer running operations, likely due to COVID-related circumstances. Before COVID, Brick Meets Click documented a strong and positive correlation between sales and the age of the service.

Offering customers multiple ways to receive orders did impact performance results. Weekly online grocery sales for stores that offered both pickup and delivery were 44% higher than stores offering only delivery and 55% higher than stores offering only pickup.

In aggregate, delivery accounted for over 60% of all online orders, but when stores allowed customers to receive orders via either delivery or pickup, delivery’s share dropped to just over 50%. Only 49% of stores in the sample offered customers the choice between the two methods.

Stores in medium-sized markets generated higher weekly sales than stores in more-populated trade areas. This is a significant flip compared to the 2019 benchmarks, and most likely due to the growth in the availability of competing online services in the larger markets.

Sponsor Appreciation & Message

We thank the teams at Mercatus, Hussmann, and Cardlytics for their generous support of this important research.

“As an equipment solution provider, our goal is to help the retail store and fulfillment center to excel at executing the strategy,” said Dan Sullentrup, vice president of e-commerce at Hussmann Corporation. “The challenge is there’s no one, simple solution as there are many variables that need to be considered and vetted with the retailer’s overall strategy.”  

eGrocery Performance Benchmark Reports

The complete results of the Brick Meets Click eGrocery Performance Benchmarking 2021 Wave will be released in a series of three reports:

1. Top-line Performance Findings releases Tuesday, January 18, followed by a public webinar featuring David Bishop of BMC and Dan Sullentrup of Hussmann WATCH NOW  This report focuses on key causal factorsthat can impact top-line performance, such as how long a service has operated,what services are offered by each store, and where the store operates.
2. Key Customer Metrics released in mid-February and discussed metrics ranging from acquisition and churn rates to buying patterns by customer cohort and more, supported by additional perspective from Cardlytics .
3. Top-Quartile Analysis releases in late April, and will focus on factors and issues that can show grocers how they can further improve performance with practical guidance from Mercatus .

About this research

The Brick Meets Click eGrocery Performance Benchmarking is an annual initiative based on ePOS data provided by participating retailers. It began in 2016 with 17 grocery store banners and has grown to 45 banners for 2021. The initiative examines the critical business questions related to improving strategy and execution when operating a first-party ecommerce shopping service.

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