Feb 2021 Results: Online Grocery Sales Total $8.0 Billion

Topline

Total US grocery online grocery sales pulled back to $8.0 billion for February, a 14% drop from January, as fewer households went online for groceries and placed a slightly lower number of orders versus prior month according to the Brick Meets Click/Mercatus Grocery Shopping Survey* fielded Feb. 26-28, 2021.

The overall sales contraction in February was expected, said David Bishop, Research Lead and Partner, Brick Meets Click. The January research results showed that shopper sentiment related to completing a grocery delivery or pickup order within the next month dropped by approximately 10%, and that is what happened, albeit at even a slightly higher rate.

The delivery/pickup segment captured $6.1 billion in sales (see chart below), accounting for more than three-quarters of total online grocery sales for February.

• The pickup segment gained in both share of online grocery sales (approximately 50%) and share of orders (approximately 40%).
• Despite these gains retailers face challenges with first-time users of the service.

Key Findings & Insights

According to the February 2021 Brick Meets Click/Mercatus Grocery Shopping Survey  , in the last 30 days,

The decline in total sales is attributed to two drivers:

SMALLER BASE OF HOUSEHOLDS BUYING GROCERIES ONLINE

Monthly active users dropped 12% from 69.7 million in January to 60.1 million in February.

• Over 40% of the reduction came from the over-60 age group.
• This may reflect growing confidence and/or personal preferences for in-store shopping as COVID-19 vaccinations roll out across the U.S.

LOWER ORDER FREQUENCY

Online grocery shoppers placed an average of 2.7 orders during February, a 6% drop from January’s 2.8 orders.

• Most of the drop is attributable to the ship-to-home segment, which had a 12% decrease in order frequency.
• The combined delivery/pickup segments were only down 4% on a month-over-month basis.

Changes in Order Mix, AOV and Satisfaction

The declines in shopper base and order frequency are offset by shifts in the order mix share and an increase in average order value (AOV) on a month-over-month basis.

SHIFTING ORDERS TOWARD PICKUP

Pickup gained five percentage points of order share and accounted for about 50% of all online grocery sales completed during February.

• Cross-shop between pickup and delivery remained low as less than 15% of households reported using both a delivery and pickup service in February.
• This shows that customers have strong preferences for the method they want to use to receive their online grocery orders.

HIGHER SPENDING PER ORDER

The month’s 4% increase in AOV was boosted by two factors.

1. Share mix shifting towards the pickup/delivery segment, which typically involves larger orders. Households spent an average of $82 in February for orders received via delivery or pickup, which is 55% larger than orders shipped-to-home via common or contract carriers.
2. Each of the ship-to-home and delivery/pickup segments also had respective increases. The AOV for ship-to-home orders jumped nearly 11%, while the AOV for the delivery/pickup segment grew just over 1% in February vs. January.

SATISFACTION CHALLENGE FOR PICKUP

February’s overall satisfaction level stabilized as 58% of households reported being extremely/very likely to place another order with the same delivery or pickupservice within the next 30 days.

While the overall scores for pickup and delivery were essentially equal, there was a significant gap, greater than 10 percent points, in the first-time user scores for each segment.

• More than 40% of first-time delivery service users reported that they were extremely/very likely to use the same service again.
• Less than 30% of first-time pickup service users reported that they were extremely/very likely to use the same service again.

These low scores show that the customers experiences are not living up to expectations and that’s going to be costly if not resolved soon, as pickup services are only becoming more vital to brick-and-mortar retailers for both strategic and economic reasons.

Sponsor Appreciation

We thank the team at Mercatus for their continued generous support of the February research wave. Click here to see the March 16, 2021 press release  .eGrocery IP Monthly Reports

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 Feb. 26-28, 2021 with 1,812 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 Jan. 28-31, 2021 (n=1,776) and 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).