Online Grocery Sales Drop

The U.S. online grocery market finished February with total monthly sales of $7.9 billion, down 10.5 percent compared to February 2023, according to the most recent Brick Meets Click/Mercatus Grocery Shopper Survey.

Lower average order values (AOV) were the catalyst driving the downward sales trends as ship-to-home dropped 15.4 percent and pickup fell 12.8 percent, according to the report. Delivery, the only method to expand sales, was up 4.7 percent, aided by a stronger rebound in monthly active users versus last year compared to pickup and ship-to-home.

In fact, ship-to-home, pickup, and delivery all expanded their monthly active user (MAU) bases. These across-the-board gains were driven by an increase in the share of MAUs who received orders via multiple methods during the month as the overall user base slipped slightly, down 0.3 percentage points compared to the prior year, according to the report.

The report also evaluated MAU trends by income level, showing the lowest-income group of households (earning less than $50,000 annually) experienced several notable shifts:

• Fewer lower-income households reported using a pickup or delivery service during February, as penetration pulled back 0.7 percentage points and 4.6 percentage points, respectively, compared to last year.

• Walmart experienced a 1.5 percentage point drop in penetration compared to a 0.6 percentage point drop for supermarkets.

• One factor likely contributing to the year-over-year trends among these households is the expiration of the pandemic-era emergency SNAP allocations at the end of February 2023.   

“Convenience remains one of the primary motivations for shopping online for groceries, however, for some customers, cost considerations are now weighing more heavily on their decision on how to shop,” said David Bishop, partner at Brick Meets Click, in a statement. “This means that the explicit costs associated with egrocery services are more likely to impact how these customers grocery shop, whether that’s returning to in-store or shifting where they shop online.”