Affluent Households Key to Walmart’s Strong 1H24 eGrocery performance

Walmart’s up-market gain signals potential online challenges for Supermarkets 

Barrington, Ill. – September 30, 2024 – While lower income households remain Walmart’s core online grocery customer segment, a growing base of affluent households played a vital role in driving Walmart’s strong growth through the first half of 2024 (1H24) due to higher order frequency and higher spending than other customer segments according to the latest edition of Profiling the Online Shopper: eGrocery Purchase Patterns in the U.S. The report created by Brick Meets Click and sponsored by Mercatus dives deep into users of four major formats/banners – Supermarkets, Walmart, Target, and Hard Discount – to analyze how household penetration, spending, and order frequency for eGrocery have shifted between 1H24 and the same period in 2023. 

Looking at the eGrocery customer mix across the four major formats/banners, Walmart’s mix (excluding Sam’s Club) continues to skew more heavily toward lower income households than the other competitors. During 1H24, households making less than $50K annually accounted for 41% of Walmart’s average monthly active users (aMAUs) compared to 36% for Hard Discount, 30% for Supermarkets, and 28% for Target. However, Walmart’s most affluent segment, households with $200K+ in annual income, expanded to 8%, growing almost five times faster than the 4% year-over-year growth for its overall aMAU base.  

“Walmart’s growth in households making $200,000+ per year shows that the ‘flight to value’ has even affected how this income group shops for groceries,” said David Bishop, Partner at Brick Meets Click. “Affluent households that shop online for groceries at Walmart spend 1.5 times more each month than households in the lowest income bracket, making them a very attractive customer segment to target and win over.”

Increased online penetration into the affluent household segment by Walmart has come at a time when lower-income households at many formats/banners are pulling back their online spending to varying degrees. The analysis, powered by data from the monthly Brick Meets Click/Mercatus Grocery Shopping Survey, found that for households making under $50K annually, Walmart’s sales dipped 6% and Supermarkets and Target dropped 20% respectively.

Walmart’s gains with affluent eGrocery shoppers also appear to have come at the expense of Supermarkets, Hard Discount, and Target, who each posted a decline in sales with this group. In addition, overall average order values (AOV) declined at the formats/banners in the analysis except for Walmart. Walmart’s overall AOV held steady year over year due to mixed results across the income segments as its AOV for eGrocery orders placed by affluent shoppers surged more than 40% to $119 compared to last year while the AOV for its lowest income users shrank by almost 6% to $84.

Overall eGrocery order frequency rates at Walmart increased slightly in 1H24, inching up by about a half of a percentage point to 1.97 monthly orders versus 2023. Although order frequency dropped over 10% for households making $200K+ to 2.02 monthly orders, the combination of 2+ orders per month and an AOV close to $120 shows the value of these affluent customers to Walmart’s eGrocery business.

In looking at where else Walmart’s customers chose to buy groceries online during the same month, Supermarkets retained the top spot for cross-shopping, edging out Amazon’s pure-play services. Approximately one in six (16.8%) of Walmart’s MAUs also bought groceries online from a Supermarket format within the same month during the 1H24, slipping 28 basis points (bps) versus the 2023 period. The dip in the overall cross-shop rate with Supermarkets was entirely driven by less cross-shopping among Walmart’s least and most affluent households, signaling that Walmart may be capturing a greater share of wallet for these segments.

"Regional grocers risk losing more of the business that’s driven by affluent customers to Walmart if they don’t effectively address shifting expectations,” said Mark Fairhurst, Chief Growth Officer at Mercatus. “To retain existing affluent shoppers and possibly attract others, grocers need to strengthen their value propositions by offering unique products, personalized promotions, exceptional service, and enhanced digital experiences that elevate customer satisfaction."

For more information about this report, check out  Brick Meets Click eGrocery Shopper Profiles report page for information about subscribing to the full monthly report.

About this report and analysis

Profiling the Online Shopper: eGrocery Purchase Patterns in the U.S. is a report created by Brick Meets Click and sponsored by Mercatus. The conventional grocer is the main audience for this report, so it highlights the Supermarket format and its primary competitors: Hard Discount formats and Walmart and Target banners. Most metrics exclude the Ship-to-Home segment since most conventional grocers don’t offer this type of service.  

The monthly Brick Meets Click/Mercatus Grocery Shopping Survey is an independent research initiative created and conducted by Brick Meets Click since March 2020 and sponsored by Mercatus. This analysis is based on 10,529 responses compiled during January – June of 2023 (1H23) and 10,501 responses compiled during January – June of 2024 (1H24) from adults 18 years and older who participated in the household’s grocery shopping.

About Brick Meets Click

‍Brick Meets Click is an analytics and strategic insight firm that connects today's grocery business with tomorrow's needs. Our clear thinking and practical solutions help clients make their strategies and customer offers more compelling and relevant in the changing U.S. grocery market. We bring deep industry expertise and fact-based analysis to the challenge of finding new routes to success. 

About Mercatus 

Mercatus drives digital transformation for retailers through an extensive suite of connected and contextualized commerce solutions. We enhance shopper engagement, tailor experiences to individual preferences, and cultivate enduring loyalty across retail businesses of every size. Our mission is to enable retailers to captivate customers, boost sales, foster retention, and deepen loyalty in a digital world. With our cutting-edge solutions, retailers can streamline operations, enrich customer experiences, and realize substantial growth. Embark on the digital transformation journey and unleash the full potential of your retail business with Mercatus.