June 2023 U.S. eGrocery sales slip 1.2% versus year ago to $7.1 billion

The U.S. online grocery market finished June with $7.1 billion in total ales, down 1.2% compared to last year’s $7.2 billion, according to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey fielded June 29-30,2023.

Topline: The number of monthly active users (MAUs) buying groceries online expanded by slightly more than 1% in June and the overall average order value (AOV) rose 3% versus a year ago, however, neither of these gains was great enough to offset the more than 5% drop in the average number of orders completed during the month.

“Our 5-year forecast anticipated that 2023 would be a challenging year for eGrocery so these results generally align with our expectations,” said David Bishop, partner at Brick Meets Click. “So, while Ship-to-Home declines and Delivery has mixed results, Pickup’s stronger performance isn’t surprising as it is becoming more widely available and helps customers who want to shop online save money, which is certainly helpful in the current market.”

Key Findings: June 2023 YOY

Results were mixed across the three receiving segments.

PICKUP , much like last month, continued to buck the downward trend experienced by the other two segments. In June, Pickup sales grew 3.2% versus a year ago and accounted for nearly 49% of all eGrocery sales, up 200 bps from last year. Sales climbed largely due to an MAU base that expanded almost 4% during the month although its AOV slipped 40 bps on a year-over-year basis.

DELIVERY dipped for the second straight month. The segment’s sales declined 2.5% compared to June last year, causing its sales share to fall by 50 bps to just under 35%. A 5% contraction in MAUs during the month drove most of the sales decline as Delivery’s AOV increased by more than 7% versus last year.

SHIP-TO-HOME continues to face headwinds as US households continue to shift how they receive online grocery purchases. The segment experienced a 9.7% drop in sales compared to June last year, capturing just under 17% of all eGrocery purchases during the month, a drop of 150 bps versus a year ago. Lower spending per order was also a factor as its AOV fell 1% on a year-over-year basis.

More households buying groceries online

In addition to more MAUs buying groceries online in June, a greater share of MAUs, nearly 70%,chose to use just one of the three fulfillment methods to receive their online grocery orders, up over 200 basis points (bps) compared to the prior year.

Pickup’s penetration rose 140 bps to 56% while Ship-to-Home’s fell 390 bps to 41%, and Delivery dipped 250 bps to 39%.

Lower order frequency by active shoppers

In June, the average number of orders placed by MAUs fell by more than 5% to2.47 versus June 2022, continuing a downward trend from the record high of 2.91 inMay 2020.

Overall repeat intent scores hold steady but down 10+ pts vs. pre-COVID

The overall repeat intent rate was flat at 63% versus a year ago, ending the three-month slide reported from March through May of 2023. The current overall rate still lags pre-COVID intent rates by more than 10 percentage points, illustrating the challenge that grocers face relative to retaining customers.

The reward for keeping a customer engaged remains clear as the AOV for customers who used the same Grocery or Mass service four or more times in the last three months was 57% higher than the AOV for the service’s first-time customer in June.

Share of total spending

Online’s share of total grocery spending declined in June, dropping 230 basis points to 11.9% versus last year.

Excluding Ship-to-Home, since most conventional supermarkets don’t offer it, the adjusted contribution from Pickup and Delivery finished at 10.0%, down 160 basis points compared to a year ago, due to Delivery’s weaker performance for the month.

Q1 & Q2 '23 vs. '22

Sales trends: For the first six months of 2023, total eGrocery sales were down 1.8% versus the same period in 2022. As a result, eGrocery’s year-to-date contribution to total grocery sales fell 100 bps to 12.3% compared to 2022.

Share trends: Throughout the first half of 2023,

• Pickup continued to win the largest share of sales, gaining 140 bps over the 2022 period and capturing 47.1% of total eGrocery sales.
• Delivery’s share remained essentially unchanged at 35.9%.
• Ship-to-Home ceded 130 bps of share, dropping to 16.9% this year.

Sponsor Message & Appreciation

“To elevate customer engagement, regional grocers need to improve the perceived value associated with the online shopping experience,” advised Sylvain Perrier, president and CEO, Mercatus. “To achieve this, grocers can focus their efforts on areas like leveraging personalized recommendation algorithms to provide more relevant product suggestions based on individual preferences and past purchases, optimizing the platform’s usability to reduce points of friction, and offering personalized discounts, digital coupons, and loyalty rewards.”

We thank the team at Mercatus for their continued generous support of this research. Click here to see the July 17, 2023 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 29-30, 2023, with 1,769 adults, 18 years and older, who participated in the household’s grocery shopping.

The three receiving methods for online grocery orders are defined as follows:

• Delivery includes orders received from a first- or third-party provider like Instacart, Shipt or the retailer's own employees.
• Pickup includes orders that are received by customers either inside or outside a store or at a designated location/locker.
• Ship-to-Home includes orders that are received via common or contract carriers like FedEx, UPS, USPS, etc.

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 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 for each of the surveys conducted in 2023 – May 30-31 (n=1,792), Apr. 28-29 (n=1,746), Mar. 30-31 (n=1,742),  Feb. 26-27 (n=1,745), Jan. 30-31 (n=1,735);in 2022 – Dec. 28-29 (n=1,715), Nov. 29-30 (n=1,749), Oct. 28-29 (n= 1,732), Sept. 29-30 (n=1,752), Aug. 29-30 (n=1,743),July 29-30 (n=1,690), June 29-30 (n=1,743), May 28-29 (n=1,802),  Apr. 28-29 (n=1,746), Mar. 28-29 (n=1,681),Feb. 26-27 (n=1,790), and Jan. 29-30 (n=1,793); in 2021 – Dec. 29-30 (n =1,836), Nov. 29-30 (n=1,785), Oct. 29-30 (n=1,751), Sept. 28-29 (n=1,728), Aug.29-30 (n=1,806), July 29-30 (n=1,892), June 27-28 (n=1,789), May 28-30(n=1,872), Apr. 26-28 (n=1,941), Mar. 26-28 (n=1,811), Feb. 26-28 (n= 1,812),and Jan. 28-31 (n=1,776); in 2020 – Nov. 11-14 (n=2,067), Aug. 24-26 (n=1,817),Jun. 24-25 (n=1,781), May 20-22 (n=1,724), Apr. 22-24 (n= 1,651), and Mar.23-25 (n=1,601); and in 2019 – Aug. 22-24 (n = 2,485).

Photo credit: David Bishop, Brick Meets Click.