Top Line

Total U.S. online grocery sales for July jumped 17% year over year to$7.8 billion, driven by inflationary pressures and strong demand forDelivery and Pickup services triggered by ongoing COVID concerns,according to the Brick Meets Click/Mercatus Grocery Shopping Survey fielded July 29-30, 2022.

“COVID-19 concerns coupled with inflation have forced a tradeoff between two fundamental desires for shoppers – not getting infected and not paying more than necessary,” said David Bishop, partner at Brick Meets Click. “While online shopping – especially delivery – costs more than in-store shopping, using an online service may help prevent illness which could cost more in the long term due to lost wages and other life complications.”

Key Findings & Insights

Expanded user base for Pickup and Delivery

During July, more than 68 million households went online to buy groceries, a 3% gain versus last year but only the Pickup and Delivery segments benefited from that increased demand.

• Pickup’s monthly active user (MAU) base expanded more than 5% and Delivery’s expanded nearly 4% during the month.
• Ship-to-Home’s MAU base contracted more than 4%.

COVID's impact on demand

The research found that only one-fifth of households were “not at all concerned” about catching COVID-19, and 36% of those households indicated using a grocery Pickup and/or Delivery service during the past month.

• As concern increased to “slightly,” “somewhat,” “very,” and “extremely,” Pickup and/or Delivery usage rates rose 6%, 15%, 20%, and 53% respectively.
• During July 2022, 41% of all U.S. households used a grocery Pickup and/or Delivery service, suggesting that around 5 percentage points, or over 10% of MAUs were influenced by COVID concerns to some degree when compared to usage rates for those with no concern.

Inflation's impact on demand and AOV

Compared to July of last year, the MAU base for Mass, which appeals to more cost-conscious shoppers, grew just over 1% while Grocery’s MAU base contracted over 10%.

The average order value (AOV) aggregated across all three receiving methods grew 11% on a year-over-year basis.

• Delivery reported the largest AOV increase, growing 13% versus the prior year, Ship-to-Home rose 9%, and Pickup reported a more modest gain of 5%.
• From a channel perspective, AOVs for Pickup and Delivery orders climbed 9% in Grocery and 10% in Mass versus July 2021.

Highest order frequency YTD but gains not evenly distributed

Monthly order frequency edged up 3% as MAUs received 2.8 online grocery orders in July 2022, the highest average order frequency since December 2021. The gain, however, was not evenly distributed across the receiving segments or key channels like Grocery and Mass.

• Pickup gained more than 2 points of order share in July versus last year, rising to 39% of all orders as order frequency among its MAUs increased by 10%.
• Delivery gained around 1.5 points of order share, finishing with 31% of all orders as order frequency for its MAU base rose 8%.
• Ship-to-Home’s order share dropped 4 percentage points to under 30% as MAUs received 9% fewer orders.

Looking at key channels showed that Mass customers increased the number of monthly orders by 5% while Grocery customers decreased their order frequency by 2%.

Cross-shopping between Grocery and Mass grew to 1 in 3.

• Cross-shopping between Grocery and Mass increased to 30% in July, 4 points higher than last year, as 3 in 10 customers who placed at least one online order with Grocery during the past 30 days also placed an order with a Mass retailer.
• These results should motivate Grocery retailers to reassess elements of their value proposition as well as how well they are executing their respective strategies.

Repeat intent: Overall level increased slightly as Mass holds top spot.

• The likelihood that an online grocery shopper will use the same serviceagain within the next month remained very stable, strengthening bynearly one point versus last month and finishing at 64% for July.
• For July 2022, the month-over-month gain was attributed to stronger repeat intentscores from Mass (68%) as the gap versus Grocery (at 58%) widened,landing at 10+ percentage points for the month.

Sponsor Message & Appreciation

“Online customers are highly motivated by convenience, and Pickup offers customers a higher degree of convenience and control at a lower cost than Delivery,” said Sylvain Perrier, president and CEO at Mercatus. “My advice to regional grocers is to use your store locations to your competitive advantage and promote Pickup services to your Delivery customers.”

We thank the team at Mercatus for their continued generous support of this research. Click here to see the August 9, 2022 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 3-month flex subscription to save money and receive each report 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 an ongoing independent research initiative created and conducted by Brick Meets Click and sponsored by Mercatus.

Brick Meets Click conducted the survey on July 29-30, 2022, with 1,690 adults, 18 years and older, who participated in the household’s grocery shopping. This research is scheduled to run monthly through 2022; then the cadence will be reevaluated to best suit the industry’s needs.The three receiving methods for online grocery orders are defined as follows:

• Ship-to-Home includes orders that are received via common or contract carriers like FedEx, UPS, USPS, etc.
• Delivery includes orders received from a first- or third-party provider like Instacart, Shipt or the retailer's own employees.
• Pickup (aka curbside) includes orders that are received by customers either inside or outside a store or at a designated location/locker.

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 to reflect the national population of adults, 18 years and older, according to the U.S. Census Bureau.

Brick Meets Click used a similar methodology for each of the prior surveys conducted in 2022 - 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).