More shoppers in July chose to pick up their online grocery orders rather than have them delivered by a third party or shipped to their homes, according to a recent grocery shopping survey.
Total sales in the online grocery market last month fell 7% to $7.2 billion, compared to July 2022, according to the Brick Meets Click and Mercatus survey, which was fielded July 29-30.
Despite the decline, the base of monthly active users (MAUs) who bought groceries online grew by nearly 5% for July versus last year, the survey showed. The growth was driven by a more than 7% increase in the MAUs who opted to pick up their orders. The ship-to-home order base remained relatively flat, while the delivery base dipped 1% compared to the prior year.
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Order frequency dropped 10% year-over-year and was the main contributor to the monthly sales decline, the survey showed.
Constrained spending partly to blame
"July’s results reflect the growing financial challenges many consumers are facing today," said David Bishop, partner at Brick Meets Click. These challenges along with evolving expectations, driven by experience engaging with “Mass” online grocery sales at stores such as Target and Walmart, are contributing to the growing gap between conventional grocers and their Mass rivals, he said.
The downward trend in July was driven by consumer pullback in order frequency and constrained spending per order, despite the larger base of active users per month than in the prior year, the survey shows.
"Online grocery sales are likely to remain under pressure throughout 2023 as a variety of financial headwinds continue to push shoppers to prioritize costs over convenience," Bishop said.
Mass grocery sales saw a surge in online orders compared to only modest gains at conventional grocers during July, which was the most significant gap since the survey started tracking this data in January 2021. Order frequency declined for both formats, however, and the average order value for conventional grocers dipped by more than 5% while Mass finished up slightly.
Brick Meets Click began measuring online grocery spending in 2011 for various U.S. retailers, and it expanded its tracking service nationally in 2016. The Brick Meets Click and Mercatus Grocery Shopping Survey is an independent research initiative created and conducted by Brick Meets Click and sponsored by Mercatus.
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