Source: Brick Meets Click/Mercatus, July 2023
Heading into the back half of 2023, e-grocery sales continue to level off, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey. The research shows that total online grocery sales declined 7% on a year-over-year (YoY) basis, reaching $7.2 billion. The digital share of total grocery spending was down 130 basis points for the month, now accounting for 13.2% of the market.
Indicating a slowing of momentum in the e-commerce space, the survey showed that sales dipped across all fulfillment models. Delivery was down 13% compared to July 2022, while pickup slid 3% and ship-to-home was off by 2%.
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Analysts attribute the digital slowdown to lower order frequency and reduced spending per order. Order frequency decreased 10% over last year and average order values edged 1.5% lower in that same time frame.
“July’s results reflect the growing financial challenges many consumers are facing today,” observed David Bishop, partner at Brick Meets Click. “These challenges along with evolving expectations, driven by experience engaging with mass, are contributing to the growing gap between conventional grocers and their mass rivals.”
To that point, the companies’ research affirms that mass stores scored an influx of new online buyers while traditional grocers took in a modest gain in users last month. Additionally, the repeat intent rate for the mass channel was nearly 18 points higher than for grocery. That continues a trend from other recent months.
Still, not all of the findings were negative. For example, although sales are down, the staying power of e-comm in general is reflected in continued growth in the monthly active user (MAU) base. The Brick Meets Click/Mercatus report shows that the number of U.S. households that bought groceries online grew 5% on a YoY basis, with more opting for pickup over ship-to-home and delivery.
Sylvain Perrier, president and CEO of Mercatus, said that traditional grocers should build on their strengths to stay competitive in a tightening e-grocery market with new users up for grabs. “To drive continued engagement, regional grocers need to offer their customers value for their money and more convenient ways they can save, such as encouraging repeat purchases with promotional offers and easy-to-use digital coupons,” he remarked. “Loyalty programs should be thoughtfully integrated so that rewards are easily accessed and prominently positioned to remind customers of the monetary value they’re receiving.”