June 2021: Total U.S. Online Grocery Sales hit $6.8 billion, down 23% vs prior year

Topline

The U.S. online grocery market finished June with $6.8 billion in sales,as 63.5 million households placed an average of 2.7 online grocery orders during the month, according to the Brick Meets Click/Mercatus Grocery Shopping Survey * fielded June 27-28, 2021. The delivery/pickup segment captured $5.3 billion in sales (see chart below), accounting for more than three-quarters of total online grocery sales for June.

While the total market contracted, pickup’s dominance continued to strengthen, and the degree of online grocery cross-shopping between grocery and mass retail services remained near all-time highs.

“The cumulative effect of consistently executing a sound strategy that delivers against the brand’s promise has helped mass retailers outperform grocery on key metrics, including MAUs, order frequency and AOV in June 2021,” David Bishop explained.“It’s vital for grocers to compete against mass, but it’s also essential that grocery retailers don’t try to operate like mass since that is an unsustainable strategy.”

Key Findings & Insights: June YOY

According to the June 2021 Brick Meets Click/Mercatus Grocery Shopping Survey  , the 23% decline in total online grocery sales for June vs year ago, much like in May, was driven by decreases in the number of monthly active users (MAUs), order frequency, and spending per order.

Smaller base of engaged households

Monthly active users (MAU) dropped 12% to 63.5 million in June 2021 from 72.0 million in June 2020.

The MAU base declined across all age groups with the youngest (18-29 years old) and the oldest (>60 years old) each dropping by more than 15%. The core customers (30-44 years old) dropped only 6%.

Pickup’s monthly average user base jumped by almost 16% on a year-over-year basis, while delivery’s base declined 1% and ship-to-home’s base experienced a drop of 6%.

Lower order frequency

During June 2021,monthly active users placed an average of 2.70 online orders, down 6% from 2.89orders one year ago.

The share of orders received via pickup grew nearly seven points on a year-over-year basis, capturing 42% of total order share as delivery and ship-to-home experienced two- and four-point drops in share,respectively.

More shoppers use only pickup or delivery

The June2021 results also revealed that 33% of monthly active users received online grocery orders only via pickup; another 16% received online grocery orders only via delivery.

From a broader perspective, pickup’s overall usage rate for June 2021 was nearly 5 percentage points higher versus last year and over 23 points higher compared to August2019.

These results illustrate the importance of offering both services – but especially pickup – to remain relevant and to better support the total addressable market for online grocery services.

AOVs decline

Spending per order shrank as the weighted average across all three receiving methods declined nearly 7% in June 2021 versus a year ago, mostly driven by adrop in delivery’s average order value (AOV) that exceeded 11%.

Compared to pre-pandemic spending levels, June 2021’s AOVs remained elevated, with delivery up 6%, pickup up 12%, and ship-to-home up 14% versus August 2019.

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, jumped to 60%, upfour points compared to a year ago.

While this is a positive trend, there is a heads up for grocery retailers: The repeat intent rate for mass retailers, like Walmart and Target, was almost nine points higher on average compared to grocery’s repeat intent rate during June 2021.

Online grocery cross-shopping between grocery & mass remains high

For June, the share of online customers who used both a grocery service and a mass retail service to buy groceries during the month exceeded 28% for the second straight month.

In fact, this finding illustrates how a mass rival could now be a grocery retailer’s primary competitor when it comes to online grocery, as the cross-over shopping rate was only 15% pre-COVID (in Aug. 2019).

Sponsor Message & Appreciation

“Given June’s results,it’s hard to deny U.S. consumers’ clear preference for pickup services in all market types,” said Sylvain Perrier, president and CEO, Mercatus. “Regional grocers looking to solidify their sales gains also confront a more competitive environment. The mass merchants and third-party delivery services are all looking to protect their share of online wallet. One clear action grocers should take is to double-down on modeling your repeat online customers shopping preferences, and develop a re-engagement strategy that plays to your retail brand’s unique strengths. Second, invest both in the technology and re-alignment of your operating models so you can improve the overall customer pickup experience at a lower cost to your business.”

We thank the team at Mercatus for their continued generous support of the June research wave. Click here to see the July 22, 2021 press release .

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 June 27-28, 2021, with1,789 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 May 28-30 (n=1,872), 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).