Mass-Market Retailers Attracting More E-Grocery Customers Than Supermarkets

Brick Meets Click/Mercatus Grocery Shopping Survey also finds pickup posted highest gain in August

9/12/2023

The Brick Meets Click/Mercatus Grocery Shopping Survey found that pickup sales in August drove three-quarters of year-over-year gain.

The online grocery market in the United States grew 8.7% compared with last year, ringing up $9.3 billion in sales for August 2023, according to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey, fielded Aug. 30-31. Mass continued to attract many more customers than supermarkets.

The mass monthly active user (MAU) base surged by almost 20% in August, while supermarkets contracted by more than 10%. Similarly, order frequency for mass rose in the low single digits but fell in the mid-single digits for supermarkets versus the prior year. Average order value (AOV) was the only metric where both mass and supermarkets reported comparable gains versus last year.

Cross-shopping rates between grocery (which includes supermarket and hard-discount formats) and mass continued to climb, increasing 490 basis points versus last year to finish the month at 34%. This is the highest level of cross-shopping to date and more than twice that of pre-COVID levels recorded in August 2019. The gap in repeat rates shrank slightly in August as the share of grocery customers who indicated that they are extremely or very likely to use the same service next month improved nearly two points to 60%, while mass remained relatively unchanged, at 68%.

Meanwhile, household demand for both pickup and ship-to-home was strong in August, while delivery experienced a slowdown in order volume. Analyzing the MAU bases for each of the three methods showed that ship-to-home expanded by more than 9% and pickup increased by nearly 6%, while delivery was up less than 1%.

The total volume of e-grocery orders placed during August 2023 grew 5% versus 2022, driven almost entirely by the expansion of the MAU base rather than a change in order frequency by MAUs, which was essentially flat versus last year. Order volume growth was unevenly distributed. Delivery, the only method to post a decline in order volume, fell almost 5%, while pickup and ship-to-home climbed 9% and 10%, respectively, compared with 2022. The results also revealed that Amazon’s pure-play segments (e.g., marketplace, Subscribe & Save) contributed significantly to ship-to-home’s strong performance as its order volume finished up more than 10% higher than last year.

“Online customer loyalty is increasingly elusive, and grocers should focus on creating more seamless experiences that keep shoppers – especially the first timers – coming back,” said Sylvain Perrier, president and CEO of Mercatus, which is based in Toronto. “By providing personalized recommendations and promotions based on shopping history and personal preferences, grocers can strengthen connections with their customers that go beyond simply the transaction and increase the likelihood of repeat business.”

The share of spending that online captured in August versus the same period last year slipped 20 basis points to 13.9%. Excluding ship-to-home, since most conventional supermarkets don’t offer it, the adjusted contribution from pickup and delivery finished at 11.5%, down 20 basis points compared with a year ago, due to delivery’s weaker performance during the month.

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. Barrington, Ill.-based Brick Meets Click conducted the survey on Aug. 30-31 with 1,704 adults 18 years and older who participated in their households’ grocery shopping.