According to the latest BrickMeets Click/Mercatus Grocery Shopping Survey fielded April28-29, 2023, overall eGrocery sales forApril 2023 totaled $8.2 billion, up 0.9%, versus a year ago. Looking beyond toplinefindings reveals significant opportunities and challenges for Grocery,especially as the gap in repeat intent with Mass expands to another record high.

“A macro view of the eGrocery market can reveal certain opportunity gaps,but it may also obscure key shopping dynamics within a particular segment ofthe market,” said David Bishop, Partner at Brick Meets Click. “For example,it’s difficult to see how little overlap exists between the households that usePickup and those that use Delivery services or to know that Pickup grewstronger in Mass during April unless you’re able to dig deeper into the segmentdynamics as we do in our monthly reports.”

Key Findings: April 2023 YOY

Year-over-year performancevaried widely across the three key segments as Delivery sales jumped 20%, Pickupdipped 3%, and Ship-to-Home plunged 19%.

DELIVERY: The extremely strong gain for Delivery during April 2023 was driven bya rebound in monthly active users (MAUs) and a higher average order value(AOV).

• Delivery’s MAU base grew 11% versus the prior year but finished up only1% on a two-year stacked basis versus 2021 as the segment’s customer base fell9% last year.
• Over the past several years, the expansion of new deliveryproviders and service offerings has attracted more customers by making it botha more available and attractive way to shop, depending on the mission oroccasion.
• In addition, Delivery’s AOV rose about 5% on ayear-over-year basis while the other two segments experienced a pullback in spendingper order versus 2022.

PICKUP: April’s decline in Pickup sales was largely the result of lower orderfrequency and a reduced AOV; this was offset somewhat by moderate growth in itsMAU base (in the mid-single digit range).

SHIP-TO-HOME: The decline for Ship-to-Home sales, onthe other hand, was the result of a deterioration across all key shoppingmetrics, including continued contraction of its MAU base along withdouble-digit drops in both AOV and order frequency among active users.

Repeat intent scores trended down

April's downward trend in repeat intent scores should be particularly concerning for Groceryoperators for two reasons.

• First, the likelihood that a customer will use the same servicewithin the next 30 days for April 2023 dropped 530 basis points compared tolast year, landing at under 58%, driven by a dramatic drop from the most-frequentcustomers (those who completed four or more orders with a service within thepast three months).
• Second, the repeat intent rate for Mass declined nearly 300basis points in April versus the prior year, but the repeat intent rate for Groceryfell almost 900 basis points, leading to the largest gap recorded to datebetween the two formats and surpassing the record gap set in January 2023.

Looking at repeat intent rates by receivingmethod reveals more concerning news for Grocers.

• Grocery’s repeat intent ratefor Delivery orders has not only declined more than its rate for Pickup orders,but it has also dropped dramatically compared to Mass Delivery services.
• This decline,combined with the fact that Delivery represents a significantly higher share ofonline orders for Grocery than Mass, highlights the importance of controllingthe quality of the customer experience.

Share of total spending

Online’sshare of total grocery spending slid in April, falling 20 basis points to 12.1%versus last year. Excluding Ship-to-Home, since most conventional supermarketsdon’t offer it, the adjusted contribution from Pickup and Delivery finished at10.0%, up 40 basis points compared to a year ago, due to Delivery’s strongperformance for the month.

Where Grocery and Mass customers shop online

Tofurther analyze current shopping behaviors, the April 2023 research wave asked wherehouseholds primarily bought groceries during the past month.

• For thosehouseholds indicating Mass, 69% reported online grocery activity in April 2023,and for those specifying Grocery (excluding Hard Discount), 54% reported onlinegrocery activity.
• As to where households bought groceries online, 73% of thehouseholds that mainly shopped with Mass also ordered online from a Mass servicecompared to 52% of those identifying Grocery as their primary store who also orderedfrom a Grocery service.

“These early findings, and others, suggest that winningonline goes beyond simply competing online, which future research will examine,”said Bishop.

Sponsor Message & Appreciation

“Given that customers vote with their wallet, the expanding gap in repeat intent between Mass and Grocery should be a red flag that warrants grocers re-evaluate all aspects of the customer experience,” said Sylvain Perrier, president and CEO, Mercatus. “Customers’ expectations continue to evolve based on past experiences, which means it’s vital that grocers continue to improve the execution of various aspects, whether that’s a more personalized experience, fewer out-of-stocks, or shortened wait times."

We thank the team at Mercatus for their continued generous support of this research. Click here to see the May 15, 2023 press release.

eShopper/eMarket Monthly Report available

Stay on the leading edge of what's happening in today’s online grocery market.

Get a more extensive summary of this month's research insights in the State of the U.S. eGrocery Market report.

Purchase the current report or sign up for a 4-month flex or 12-month subscription to save money and receive eachreport when it works best for your business planning cycle. LEARN MORE HERE .

About this consumer research

The Brick Meets Click/Mercatus Grocery Shopping Survey is anongoing independent research initiative created and conducted by Brick MeetsClick and sponsored by Mercatus. Brick Meets Click conducted the survey on March 30-31, 2023,with 1,742 adults, 18 years and older, who participated inthe household’s grocery shopping.

The three receiving methods for online grocery orders aredefined as follows:

• Delivery includes orders received from afirst- or third-party provider like Instacart, Shipt or the retailer's ownemployees.
• Pickup includes orders that are received bycustomers either inside or outside a store or at a designated location/locker.
• Ship-to-Home includes orders that are receivedvia 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 toreflect the national population of adults, 18 years and older, according to theU.S. Census Bureau. Brick Meets Click used a similar methodology for each ofthe surveys conducted in 2023 – 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: Cindy Christian, Brick Meets Click.