The U.S. online grocery market finished November with $7.7 billion intotal sales, down 10% compared to a year ago, but only 2% lowerthan the $7.8 billion reported for the two prior months,according to the monthly Brick Meets Click/Mercatus Grocery Shopping Survey fielded November 29-30, 2022.

The year-over-year declinein total sales was driven by fewer households buying groceries online, combinedwith lower order frequency and constrained spending per order among monthly active users (MAUs). Delivery was the only method tomaintain sales versus a year ago, and the downwardpressures were more present in Grocery formats than in Mass.

“When it comes to shopping online – especially for Delivery or Pickup – cost considerations include more than the price paid for a basket of products,” said David Bishop, partner at Brick Meets Click. “Many customers also evaluate the total cost associated with using the service, which can include special charges, standard fees, and tips. And, when comparing the total of these costs to the customer, there’s a sizable gap in favor of Mass versus Grocery.”

Key Findings: Nov 2022 vs. prior periods

Base of active shoppers down

The total number of householdsthat ordered groceries online using any of the three receiving methods,Delivery, Pickup, or Ship-to-Home, contracted 7% in November versus last year.

• The decline was driven by a dramatic drop in the 60-and-older age group and asignificant slide among the core customer segment of 30–44-year-olds.
• Comparedto the prior year, the Grocery MAU base contracted 5% while the Mass baseexpanded by 6% as cost considerations grow in importance and customers seek toavoid unnecessary spending.

Cost considerations climb in importance for Grocery

Cost wascited as the top factor in the choice of where to shop online by 42% ofDelivery and/or Pickup MAUs in November, up from 37% in August 2020 when thisquestion was first fielded.

• The share ofMass MAUs who cited cost as the most important selection criteria has remainedaround 45% during that time.
• In contrast, the share of Grocery customers who citedcost as their top reason increased from 25% in August 2020 to 38% in November2022.

Cross-shopping between Grocery and Mass increases

Thisincreased focus on cost may be influencing where and how Grocery’s customersreceive online orders and motivating some of them to shift trips to Mass –especially those who already shop online with both formats.

In November, thecross-shopping rate between Grocery and Mass, which measures the share ofGrocery MAUs who also shopped online for groceries with Mass during the sameperiod, grew 6 percentage points versus a year ago to 30%.

Average order values: Mixed results

Delivery was the only segment that posted a gain in the averageorder value (AOV), climbing 4% compared to November 2021. In contrast, Pickupand Ship-to-Home both finished 5% lower than last year.

Adding to the list ofheadwinds challenging Grocery formats, Grocery’s AOV slipped slightly, byapproximately 140 basis points, while Mass was essentially flat year overyear.

Order frequency: Mixed YOY trends

Overall order frequency rates,defined as the number of orders received by MAUs during the period, declined justunder 4% versus the prior year. This aggregate decline was the result of contractingdemand in the Ship-to-Home segment offset by Pickup being flat and Delivery growingin the low single digits.

Order frequency by format also showed divergent year-over-yeartrends; Grocery MAUs reported a pullback of 11% in orders completed duringNovember while Mass MAUs rang up 8% more orders versus last year.

Share of spending down

ForNovember, total grocery spending softened, declining 5% versus last year. Since online sales decreased at twice that rate, online’s share of total grocerysales contracted over three points to finish at 10.1% in November.

Excludingthe Ship-to-Home segment (since it is not offered by most conventionalsupermarkets), Pickup and Delivery’s combined contribution was 8.5% for themonth.

Overall repeat intent up but Grocerystill lagging Mass

The composite repeat intent level,which measures the likelihood that an online grocerycustomer will use the same service again within the next 30 days, climbed 4 percentage points to 62% in November versus last year.

For the month, however, Mass continuedto outperform Grocery at 65% and 59%, respectively. So, in addition to increased cost pressuresand declining AOVs, Grocery’s headwinds are also due to challenges related to providingthe experience that customers now expect with online grocery shopping.

Sponsor Message & Appreciation

“Given that many shoppers are becoming more cost conscious, grocers should consider offering a tiered fee structure based on when a customer wants to receive their order and reduce some of the additional costs customers face when shopping online,” stated Sylvain Perrier, president and CEO at Mercatus. “We know that if offered the choice between shorter cycle times and lower fees, a significant share of online customers will select a time later that day or even the next day to save at least a couple of dollars.”

We thank the team at Mercatus for their continued generous support of this research. Click here to see the December 13, 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 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 an ongoingindependent research initiative created and conducted by Brick Meets Click andsponsored by Mercatus. Brick Meets Click conducted the survey on November 29-30,2022, with 1,749 adults, 18 years and older, who participated in thehousehold’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 2022 – 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).