Heads up - The average overall base of monthly users in the U.S. has increased by nearly 3percentage points while the online penetration of Supermarkets declined by 2 points in 2022 compared to2021 levels.

This is just one of many insights in a new report that delves deep into eGrocery shopping patterns at the four major grocery retail formats – Supermarkets, Walmart, Target, and Hard Discount. The report analyzes how household penetration, spending, and order frequency for eGrocery orders have shifted between 2021 and 2022 by income and age groups.

The report, Profiling the Online Shopper:eGrocery Purchase Patterns in the U.S ., is based on more than42,000 responses collected as part of the monthly Brick Meets Click/Mercatus Grocery Shopping Survey for 2021 and 2022. The research was conducted by Brick Meets Click, sponsored by Mercatus, and produced several key findings.

Below is a quick Q&A about the key findings from the report: Profiling the Online Shopper:eGrocery Purchase Patterns in the U.S .

“This analysis highlights the benefit to Supermarkets of better understanding who their core online customer segments are, and the value that different shopper segments represent to them,” said David Bishop, Partner at Brick Meets Click. “The report provides evidence that can support recommending refinements to how Supermarkets compete online – especially against the lower-priced leaders in the market.”

What’s happening with Supermarkets relative to eGrocery usage?

The average overall base of monthly eGrocery users in the U.S. has increased by nearly 3 percentage points while the online penetration for Supermarkets declined by 2 points in 2022 compared to 2021 levels.

Put another way, on average during 2022, more than half of all U.S.households ordered groceries online each month, but only one-third of those active eGrocery shoppers purchased from Supermarkets.

If Supermarkets lost penetration,who’s gaining?

The good news is that Supermarkets continued to engage the highest share of eGrocery customers in 2022 at more than 1/3 of customers. The bad news is that leadership position is eroding. From 2021 to 2022, the increase in Walmart’s share propelled it to within a couple of percentage points of Supermarkets,illustrating the growing reach and appeal of Walmart’s services.

How does the eGrocery customer mix for Supermarkets compare to other formats?

For Supermarkets and Target, the online customer skews toward higher income HHs while at Hard Discount and Walmart the mix skews toward lower income HHs.

Specifically, during 2022, households earning under $50K per year accounted for only 30% of the online customer mix for Supermarkets, and slightly less for Target, but they accounted for over 40% of the customer mix at Walmart and Hard Discounters.

Did a "flight to value" in 2022 impact Supermarkets?

Persistent high inflation likely contributed to changes in eGrocery shopper behavior at both ends of the income spectrum, and that did impact Supermarkets.

On the lower side, HHs earning under $50K per year (over 1/3 of all U.S.households in 2022) were 25% more likely to shop online with Walmart compared to Supermarkets. And, between 2021 and 2022, Supermarkets’ reach into this income group contracted by 150 basis points (bps) while it expanded for Walmart by 210 bps.

On the high end, HHs earning over $200K per year (slightly more than 10%of all U.S. HHs) were almost 3 times more likely to shop online with Supermarkets compared to Walmart in 2022, but Walmart gained ground with these shoppers, expanding its penetration by 210 bps while Supermarkets lost 120 bps in 2022 versus 2021.

Why do Supermarkets/Grocers need to focus on their higher income customers?

Understanding the shift among households earning over $200k per year is vital for Supermarkets because they are such valuable customers.

• On a monthly basis, high income households in this group spent 80% more online with Supermarkets than those earning under $50K.
• In aggregate, these upper income shoppers generated over one-fifth of Supermarkets’ online sales, which is comparable to the sharegenerated by the lowest income group even though the upper income group makes up a considerably smaller portion of the Supermarket online customer mix.

What about competition from Mass retailers like Walmart and Target?

The report documented that the rate of cross-shopping with both Walmart and Target increased year-over-year among Supermarkets’ online customer base.

Target and Supermarkets have very similar customer mixes from an income perspective, but they differ significantly based on the age of the primary shopper, with Target attracting younger households.

The youngest households (18-29 years old) are 36% more likely to shop online at Target compared to Supermarkets, and the early-family formation households (30-44) are nearly 30% more likely to do so.

Are factors other than lower prices influencing where customers choose to place their eGrocery orders?

While lower prices may be driving some of Supermarkets’ online customers to shift a portion of their eGrocery orders to lower-priced formats, a bettershopping experience at Target is likely causing changes in purchase patterns for others.

The analysis found that Target also expanded its penetration with the highest-income households in 2022 versus the prior year.

Message from Mercatus

“Customers who shop with Supermarkets tend to do so because of the quality of products they can receive, rather than paying the lowest price,” said Sylvain Perrier, president and CEO, Mercatus . “So,identifying and improving aspects of the online shopping experience that matter more to the quality-conscious customer can help increase competitiveness in ways that are not focused solely on price.”

We thank the team at Mercatus for their support of this report. Click here to see the May 2, 2023 press release with corrected graphic.

NOW AVAILABLE: eGrocery Shopper Profile report

Click here for information about the full report, Profiling the Online Shopper: eGrocery Purchase Patterns in the U.S .

About this 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.

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 21,799 responses compiled over the 12 months of 2021 and 20,948 responses compiled over the 12 months of 2022 from adults 18 years and older who participated in the household’s grocery shopping.