The U.S. online grocery market posted $7.2 billion in total sales, down 7.0%compared to last year, according to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey fielded July29-30, 2023.

Topline: This month’s downtrend was seen across all three receiving methodsand was driven by a pullback in order frequency plus constrained spending perorder, despite a larger base of monthly active users (MAUs) than the prior year.

"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, are contributing to the growing gap between conventional grocers and their Mass rivals."

Key Findings: July 2023 YOY

More households buying groceries online

For July 2023, the overall MAU base continued to grow as the total number of U.S. HHs that bought groceries online increased nearly 5% versus last year.

This growth was driven by a more than 7% increase in the Pickup MAU base, while Ship-to-Home’s base remained flat and Delivery’s contracted 1% compared to July 2022.

Lower order frequency by active shoppers

Order frequency, which dropped 10% versus last year, was the main contributorto the monthly sales decline, reducing the total number of online orders bynearly 6% for July 2023.

Delivery, which plummeted 13% versus the prior year, accountedfor almost three-quarters of the drop in online orders, while Pickup dipped by 3%and Ship-to-Home by 2%.

Constrained spending by active shoppers

The average order value (AOV) slipped approximately 1.5% versus July 2022. Delivery climbed less than one-half a percent, and Ship-to-Home, with the smallest AOV, posted a 1% gain year-over-year; however, neither of these gains was large enough to significantly offset the 2% dip in Pickup’s AOV.

Mass and Grocery formats continue to perform very differently.

Mass experienceda surge in customers while Grocery experienced only a modest gain in MAUsduring July, similar to the trend observed last month.

While order frequency declinedfor both formats, the drop for Grocery was much greater than for Mass.In addition, the average order value for Grocery dipped by more than 5% whileMass finished up very slightly.

Widening gap in repeat intent rates between Mass and Grocery

Although the overall repeat intent rate of 63% was down just 50 basispoints (bps) for July versus the prior year, the repeat intent rate for Mass wasnearly 18 points higher than for Grocery.

• The gap between Mass and Grocery widened by730 bps resulting in the largest gap since the surveys started tracking this metricin January 2021.
• Much of the monthly gain for Mass can be attributed to a strongimprovement in its repeat intent rates for Delivery. Mass also made slightgains in the already large gap it has historically enjoyed associated withPickup.

Share of total spending

Online’sshare of total grocery spending declined 130 basis points in July to 13.2%versus last year.

Excluding Ship-to-Home, since most conventional supermarketsdon’t offer it, the adjusted contribution from Pickup and Delivery finished at10.7%, down 120 basis points compared to a year ago, due to Delivery’s dramaticallyweaker performance for the month.

Sponsor Message & Appreciation

"To drive continued engagement, regional grocers need to offer their customers value for their money and more convenient ways they can save, such as encouraging repeat purchases with promotional offers and easy-to-use digital coupons,” said Sylvain Perrier, president and CEO, Mercatus. “Loyalty programs should be thoughtfully integrated so that rewards are easily accessed and prominently positioned to remind customers of the monetary value they’re receiving."

We thank the team at Mercatus for their continued generous support of this research. Click here to see the Aug. 9, 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 July 29-30, 2023,with 1,795 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 – June 29-30 (n=1,769), May 30-31 (n=1,792), Apr. 28-29 (n=1,746), 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: David Bishop, Brick Meets Click.