The U.S. online grocery market finished last month with$8.8 billion in total sales, up 1.5% compared to last year, according to the monthly BrickMeets Click/Mercatus Grocery Shopping Survey fielded February 26-27, 2023.

Excluding Ship-to-Home sales,the core eGrocery segments of Delivery and Pickup slipped 1.2% compared to lastyear which reflects a drop of almost 9% in Delivery sales and a gain of nearly5% for Pickup during the month.

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Key Findings: Feb 2023 YOY

Topline - Growth in user base and spending per order offsets lowest order frequency since pre-COVID.

“The changes in the Mass and Grocery user bases illustrate what could becharacterized as a ‘flight to value’ as shoppers deal with persistentlyhigher grocery prices,” said David Bishop, Partner, Brick Meets Click. “Another sign of inflation’simpact on eGrocery ordering patterns is the continued growth thatPickup has experienced over the last few months while Delivery hasencountered a pullback in users.”

Household usage

The overall eGrocery userbase for February grew more than 5% versus last year. This marks the secondstraight year-over-year expansion of the user base as it grew over 10%between February 2021 and February 2022.

During the month, more U.S.households used only one of the three receiving methods for online orders, jumping nearly 8 percentage points versus last year and returning tolevels similar to February 2021 which hovered around 72%.

Looking at specific formats, Mass continued to attract more customers on a year-over-year basis while Grocery contracted again.

• In February, the Mass MAU base surged more than 20% versus 2022 after a similar surge last month.
• In contrast, the Grocery MAU base contracted in the mid-to-upper single digits for at least the second straight month.

Order activity

The number of orderscompleted by MAUs fell to its lowest level since the onset of the pandemic inMarch 2020, finishing the month at 2.49 and down almost 9% on a year-over-yearbasis.

While all three receiving methods experienced this downtrend to somedegree, Delivery posted the largest and most dramatic drop in order frequency.

Spending patterns

Spending per order was higheracross all three receiving methods in February versus year ago, but onlyShip-to-Home posted an average order value (AOV) increase that exceeded the rateof grocery inflation.

The combined AOVs for Pickup and Delivery gained justover 5% versus February 2022 while Ship-to-Home’s 14% growth in AOV was boostedby an easier comparable period as last year’s AOV which wasone of the lowest recorded to date for Ship-to-Home.

Online’s share of total grocery spending fell 30 basispoints to 12.9% in February. Excluding Ship-to-Home, since most conventional supermarketsdon’t offer it, the adjusted contribution from Pickup and Delivery dropped 60basis points and finished at 10.5% for the month.

Causal factors

For February, the likelihood thata customer will use the same service within the next 30 days finished at nearly65%, an improvement of over two percentage points compared to last year andnearly seven points higher than February 2021.

Even so, repeat intent ratesamong first-time customers has declined each February since 2021, highlightinga continued opportunity to better retain new customers.

Grocery’s repeat intentrates trailed Mass by 5 percentage points in February, which was an improvementcompared to January but a drop of over 5 points versus February 2022 when Grocerylast posted a rate higher than Mass.

Sponsor Message & Appreciation

“Given that ongoing price inflation is clearly influencing shopping behaviors, grocers should promote ways customers can save more money,” said Sylvain Perrier, president and CEO, Mercatus. “Grocery retailers can consider highlighting store brands, offering pricing promotions, creating personalized digital coupons, and implementing variable fee structures that lower fees for customers and reduce the cost to assemble.”

We thank the team at Mercatus for their continued generous support of this research. Click here to see the March 14, 2023 press release.

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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 February 26-27, 2023,with 1,745 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 – 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: David Bishop, Brick Meets Click.