The U.S. online grocery market finished October with$7.8 billion in total sales, down 3% compared to a year ago and flat versus theprior month, according to the monthly Brick Meets Click/MercatusGrocery Shopping Survey fielded October 28-29, 2022.

WhileOctober's year-over-year decline was similar to the prior month, October'sresults were driven by different factors, including changes in spending perorder, order frequency, and monthly active users (MAUs), that were not evenlydistributed across the leading retail formats like Mass and Grocery.

“Beneath thetop-line results, the monthly active user base grew much faster for Mass thanfor Grocery versus last year which may be driven to some degree by inflation’s impacton household spending, but it also reflects the ability of Mass to provide a bettershopping experience,” said David Bishop, partner at Brick Meets Click.“Improving the shopping experience is vital for conventional supermarkets’ long-termsuccess as the appeal of shopping online has more to do with convenience thancost.”

Key Findings: Oct 2022 vs. prior periods

Average order value (AOV)

During October,and unlike the prior month, all three segments (Pickup, Delivery, and Ship-to-Home)experienced slowdowns in spending per transaction, declining 5% in aggregate versusthe same period last year.

• Ship-to-Home’s AOV contractedthe most, dropping nearly 11% versus a year ago; Delivery’s AOV slipped morethan 7%, and Pickup’s dipped just over 3%.
• Thisbroad-based downturn in online grocery spending suggests that customers areeither shifting some purchases offline and/or buying fewer items dueto a challenging economic outlook combined with persistent price inflation.

Order frequency

October orderfrequency trends also differed from those in September. Thecomposite order frequency for October fell nearly 7% as all three segmentsslipped versus last year.

• Ship-to-Home MAUs declinedthe most, receiving 12% fewer orders in October compared to last year; Pickup contracted 7%; and Delivery was essentially flat, declining less thanone-half of a percent.
• This softening metric indicates a subtle shift inhow customers get groceries, with offline purchases gaining from more in-storetrips.

Active shoppers

The overall eGroceryMAU base grewby 10% in October on a year-over-year basis but slipped slightly versus lastmonth.

• Each segment experienced growth: Delivery gained 10%, Pickup gained almost8%, and Ship-to-home gained nearly 6%.
• The positive trends across the boardhighlight a larger customer base that retailers can nurture to unlock additional,latent demand.

Share of spending

The effectsof persistent price inflation were evident in total grocery spending as theaverage dollars spent on groceries per household during the last week ofOctober increased 15% versus last year.

• During that period, online’s share ofspending dipped around 50 basis points, accounting for 11.6% of total grocery salesin October of this year.
• Pickup and Delivery's combined contribution was 9.4% during the same period.

Cross-shopping and repeat intent

For October,the cross-shopping rate between Grocery and Mass remained steady versus last month at nearly 28% and rose two percentage pointscompared to a year ago.

• While approximately two-thirds of this group also shoppedwith Walmart during both 2021 and 2022, the share that shopped with Target has climbed from about one-third of the group last year to nearly one-halfthis year.
• This highlights that asizable portion of the conventional grocery MAU base is likely forming their shopping expectationsbased on experiences with big-box rivals.

The repeat intent metric softened versus September but improved compared to a year ago.

• For October 2022,the repeat intent rate came in at just over 58%, a 110-basis point gaincompared to October 2021 but a 230-basis point decline versus the prior month.
• The gap between the respective intent rates for Grocery and Mass haswidened significantly: Grocery now trails Mass by over 7 points versus just2 points a year ago. This gap highlights how customers are encounteringdifferent experiences when they shop Grocery and Mass, and that may impact futureusage considerations.

Sponsor Message & Appreciation

“As grocery retailerslook to strengthen their share of monthly active online grocery shoppers, theyshould focus on working smarter, not harder,” said Sylvain Perrier, presidentand CEO, Mercatus. “This means making sure thatyour assortment is accurately reflected online, the online ordering process isengaging and streamlined, and there are no unfortunate surprises for customersduring the order assembly and receiving process.”

We thank the team at Mercatus for their continued generous support of this research. Click here to see the November 14, 2022 press release .

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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 October 28-29,2022, with 1,732 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 – 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).