Top Line

The U.S. online grocery market generated $8.6 billion in sales duringNovember, which includes $7.0 billion from the pickup/delivery segmentsand $1.6 billion from ship-to-home, reported the Brick MeetsClick/Mercatus Grocery Shopping Survey fielded November 29-30, 2021. The6% sales gain over last year’s $8.1 billion was driven in large part byan increase in the active shopper base, especially in Mass.

“Even as total online grocery sales increase, some conventional and regional grocers have reported softer sales performance during November, which is why looking at the broader eGrocery market is so important for identifying specific opportunities for improvement,” said David Bishop, Partner at Brick Meets Click. “For example, not offering pickup is likely to weigh on sales growth. Failing to attract early-stage family households can affect growth prospects, and if the shopping experience isn’t comparable to Mass rivals, that’s definitely hurting performance.”

Key Findings & Insights: November 2021

Share of total weekly grocery spending up to 14%

Online grocery sales captured less than 2% of the total weekly grocery spending in the U.S. pre-COVID; now, as of November 2021, the share was seven times larger at nearly 14% on a national level and remained between 11% and 15% throughout 2021.

Monthly user base becomes larger and more stable

DuringNovember 2021, nearly 69 million U.S. households bought groceriesonline, whether a full basket of goods or just a few items, representinga 15% jump versus last year.

One-third of these monthlyactive users (MAUs) are in the 30 to 44-year-old age group; this grouphas grown over 25% since November of last year and now represents morethan half of all MAU growth on a year-over-year basis.

Sales and orders continue to shift from ship-to-home to pickup and/or delivery

Pickup’s dominance, which began in 2020 shortly after the start of the pandemic, continued. The segment grew dollar sales 29% versus last year, far outpacing Delivery’s growth of 6% for the same period.

Together, these two methods accounted for 81% of dollar sales in November 2021 compared to 73% of total sales a year earlier, while Ship-to-Home sales plummeted 27% in the past 12 months, reflecting changing buying patterns.

AOVs rebalance versus pre-COVID: Pickup & Delivery AOVs grow while Ship-to-Home shrinks

The weighted average order value (AOV) across all three receiving methods was $71.12 in November 2021; this was driven by an AOV of $86.30 for delivery, $83.44 for pickup, and $42.03 for ship-to-home orders.

Although spending per order dropped across all three segments versus last year, only ship-to-home saw its AOV dip below pre-COVID spending levels by 6% while AOVs for delivery and pickup each remained 15% or more above those levels.

Order frequency holding steady, averaging 2.6+ orders/month

Since January 2021, the average number of orders placed by MAUs has consistently ranged between 2.66 and 2.83, and November 2021 continued this trend with MAUs placing an average of 2.68 orders.

All market types reported lower order frequency except for Large Metromarkets which held steady. However, the variability that monthly orderfrequency experienced during 2020 has lessened in 2021, declining by60%, indicating that online grocery buying behaviors are becoming moreentrenched.

Cross-shopping between Grocery & Mass/Supercenter: Big growth in Mass MAU base

The share ofGrocery’s monthly active users who also placed at least one online order with Massduring November 2021 was 23.5%, a slight pullback versus the prior month but 280 basis points higher than last year.

• For these households, more than two times as many cross-shopped with Walmart compared to Target.
• Part of November’s decline in cross-shopping may be related to the surgein MAUs buying from Mass providers, which grew by 13 million householdsover the last twelve months. In contrast, Grocery gained just over 4million households.

Repeat intent challenges: Grocery still lags Mass

The likelihood that amonthly active user will order again from the same online grocery service inthe next month landed at 58.3% for November 2021, up 110 basis points from the prior month but down almost 25 percentagepoints compared to November 2020 when new COVID cases were higher andgrowing more rapidly, and vaccinations had yet to be administered.

• Throughout 2021, repeat intent rates performed within a tighter range,but at a lower level than the 2020 peak. This could cause headwinds forgrowing AOVs because spending per order typically increases between 6%and 20% as a customer uses a service more often.
• Grocery’s repeat intent rates continued to lag those of Mass retailerslike Walmart and Target, and the gap grew from 4% the prior month toover 9% for November 2021.
• This widening gap, along with a slightlylower cross-shop rate, may highlight reasons for Grocers to beexperiencing higher customer churn in their MAU base than Massretailers.

Sponsor Message & Appreciation

“Although the market that grocers compete in today is fundamentally different, my advice remains the same,” said Sylvain Perrier, president and CEO, Mercatus. “Understand why your customers shop with you in-store and know what they value most from the experience. Take this insight, work with your online partners to emphasize your key points of differentiation online by offering a shopping experience that is tailored to the shopper’s purchasing preferences.”

We thank the team at Mercatus for their continued generous support of the November research wave. Click here to see the December 13, 2021 press release .

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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 November 29-30, 2021, with 1,785 adults, 18 years and older, who participated in the household’s grocery shopping.

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 were 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 surveys conducted in 2021 – October 28-29 (n= 1,751) September 28-29 (n=1,728), August 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); throughout 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).