U.S. shoppers are buying their groceries online even more than they were the same time in 2021.
In February, the total U.S. online grocery market gained 8.5% in sales compared to the same period a year ago, according to the Brick Meets Click/Mercatus Grocery Shopping Survey fielded Feb. 26 and 27. Brick Meets Click is a grocery analytics firm, and Mercatus sells digital commerce platforms.
That’s $8.7 billion in sales during February, according to a new release.
- Pickup sales, the largest segment of eGrocery, grew 6% versus a year ago, generated $4 billion in sales and accounted for 47% of the total sales during the month;
- Delivery reported a year-over-year gain of 37%, which equated to $3.2 billion, capturing a 37% share of eGrocery spending; and
- Ship-to-home, which was the largest segment pre-COVID with over 40% of spending, is now the smallest with just 16%; it finished with $1.4 billion in sales, down 24% year-over-year.
“New service providers, a broader range of retailers selling grocery-related products online and services targeting faster cycle times contributed to delivery’s strong sales growth. But even so, more shoppers still prefer pickup for a range of reasons that will benefit this service model going forward,” Brick Meets Click Partner David Bishop said in the release.
During February, shopper interest in online grocery shopping remained strong, as more than 68 million households bought groceries from a wide variety of providers and retail channels, which was almost 11% higher than last year’s monthly active user base. All three segments — pickup, delivery and ship-to-home — reported double-digit gains in their respective monthly active user bases, with delivery reporting the largest year-over-year gain at about 28%.
However, shoppers are spending less money per grocery order.
Overall spending per order, also known as average order value, softened in February, declining in aggregate by more than 2% year over year, according to the release. Considering the way price inflation has skyrocketed lately, this decline may mean shoppers are putting fewer items in their baskets. The ship-to-home segment was the main contributor to the overall spending decline; its average order value fell more than 25% to under $40 in February 2022, while the pickup segment’s average order value declined by less than 4% and the delivery segment grew by 12%.
February’s order frequency was up 3% versus a year ago, as shoppers completed 2.73 orders during the month, driven by using pickup and delivery more, while ship-to-home dropped by mid-single digits.
The increased order frequency, however, was not evenly distributed across market types. Only in large metro markets did monthly active users complete marginally more orders this year versus last; the three smaller metro market types reported mid- to upper-single digit declines.
The likelihood for an online grocery shopper to use the same service again within the next month came in at over 62% for the month, climbing by more than four percentage points on a year-over-year basis.
“Today, customer expectations for online grocery shopping are different than they were even a year ago, not to mention before COVID," Mercatus President and CEO Sylvain Perrier said in the release. “To grow their online share of wallet going forward, conventional grocers need to find ways to better satisfy those changing expectations. Inflationary pressures suggest retailers should look at optimizing online meal planning, showcasing store brands and encouraging repeat customers to take advantage of online loyalty discounts."
Brick Meets Click created and conducts this ongoing independent research initiative, which is sponsored by Mercatus. This February research surveyed 1,790 adults who participated in the household’s grocery shopping. This research is scheduled to run monthly through 2022; then the cadence will be re-evaluated to best suit the industry’s needs.
The three receiving methods for online grocery orders can be defined more specifically:
- Delivery includes orders received from a first- or third-party provider, such as 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; and
- Ship-to-home includes orders that are received via common or contract carriers such as FedEx, UPS, USPS, etc.
Related news: