The U.S. online grocery market posted $8.1 billion in total monthly sales for November, up 5.2% compared to last year’s $7.7 billion, according to the monthly Brick Meets Click/Mercatus Grocery Shopping Survey fielded November 29-30, 2023.

Delivery continues to outperform Pickup, and competitive pressures grow as Mass overtakes Supermarkets as the primary store for grocery purchases in November.

Topline

While all three eGrocery receiving methods contributed to the year-over-year sales growth, Delivery reported the largest gain, driven by a significant jump in its monthly users versus the prior year.

Also during November, Mass retailers surpassed Supermarkets to become the primary retail format that most households relied on for their grocery purchases during the month, whether online or in-store.

“The current economic realities and omnichannel strategies are aiding Massretailers in attracting more customers today,” said David Bishop, partner atBrick Meets Click. “The price advantage that a Mass rival, such as Walmart,enjoys is motivating cash-strapped households to shift where they shop, and Masscustomer engagement strategies are making it easier for those customers to shopthe way they want.”

Key Findings: November 2023 YOY

Competitive pressures grow as Mass attracts more customers.

• For November,the research showed that 42% of U.S. households used a Mass retailer for mostof their in-store or online grocery purchases during the month, finishing 390basis points (bps) higher than Supermarkets for the same period.
• This is areversal since May 2023, when 42% of households reported using Supermarkets astheir primary store compared to 39% for Mass.
• The latest research also documented that households who shopped forgroceries primarily at Walmart during November were also more likely to shoponline for groceries – and to do this online shopping at Walmart.com – comparedto households who shopped primarily at a Supermarket.

Receiving method results

Delivery's 8.6% year-over-year sales growth was primarily driven by strong gains in its monthly active user (MAU) base which helped grow order volume by 7.5% despite an increase of just 1.0% in average order value (AOV).

Share: Delivery accounted for nearly 33% of all eGrocery sales in November 2023, up 250 bps versus last year.

Pickup sales grew only 1.6% during November compared to a year ago, boosted by AOV growth of 11.8%. This was tempered by a modest decline in its MAU base and lower order frequency which together pulled order volume down 9.2% versus last year. Pickup’s penetration among all age groups declined in the month versus 2022 although the reasons for the broad decline are unclear.

Share: Pickup ceded 350 bps of share compared to a year ago; however, Pickup remains the sales share leader, accounting for 38% of eGrocery sales in November.

Ship-to-Home sales climbed 7.6% driven by solid MAU growth in Amazon’s pure-play services. Despite a softened order frequency rate, this MAU growth led to a nearly 3% increase in overall order volume, and a 4.5% increase in AOV contributed to the balance of the sales gains in November.

Share: Ship-to-Home ended the month with 29% of eGrocery sales, up 110 bps compared to 2022.

Cross-shopping between Grocery and Mass reaches record high.

The percentage of households who bought groceriesonline from both Grocery and Mass during November rose 300 basis pointscompared to last year, resulting in 33% of Grocery’s MAU base also shopping forgroceries online with a Mass shopping service.

The continued elevated levels of cross-shopping between Mass and Grocery(combined Supermarkets plus Hard Discount) highlight the challenges facing bothcustomers and retailers.

Repeat intent gap between Grocery and Mass widens to the largest on record.

While the composite repeat intent rate for Pickup and Deliveryimproved 140 bps versus 2022 to 63.6% for November, Mass recorded its largest advantage overGrocery as rates diverged between the two formats.

Mass ended with a nearly19-point lead over Grocery for the month as its repeat intent rate improved by 630bps while Grocery’s declined by 690 bps.

Online's share of total spending up YOY

Online sales across all formats accounted for 11.7% of total weeklygrocery spending during the last week of November, increasing 160 bps versuslast year.

The combined contribution of Pickup and Delivery, since mostconventional supermarkets don’t offer Ship-to-Home, also grew 130 bps to finishthe month at 9.8%.

Sponsor Message & Appreciation

"Considering the challengesregional grocers face today in acquiring and retaining customers, it's worthrecalling the phrase 'A bird in the hand is worth two in the bush,'" saidSylvain Perrier, president and CEO, Mercatus. "This adage underscores theimportance of paying closer attention to current customers' expectations for onlineservices and then delivering the kind of experience they want. While easiersaid than done, it requires a clear strategy and plan to execute!”

We thank the team at Mercatus for their continued generous support of this research. Click here to see the Dec. 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 November 29-30, 2023, with 1,814 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 – Oct. 30-31 (n=1,790); Sept. 28-29 (n=1,754); Aug. 30-31 (n=1,704), July 29-30 (n=1,795), 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: Cindy Christian, Tucson, AZ