Online Grocery Orders Dip in March

Brick Meets Click/Mercatus survey reveals declines across all fulfillment models

4/11/2023

(Image source: Brick Meets Click/Mercatus)

Consumers are increasingly driven by cost concerns and, in turn, may be driving more often to the physical store to shop. That’s one conclusion to be drawn from the latest Brick Meets Click/Mercatus Grocery Shopping Survey showing that online grocery sales are down 8% from last year with decreases in delivery, pickup and ship-to-home.

According to the latest findings, delivery sales slipped 7.4% in March, while pickup fell 8.5% and ship-to-home decreased by 5.9%. At the same time, the average number of online grocery orders from monthly active users continued to dwindle from pandemic-era highs; the survey showed that monthly order frequency dropped to 2.42, the lowest level since COVID-19 first emerged in March 2020. Additionally, the e-commerce share of total grocery spending came in at 12.7% last month, a drop of 160 basis points over March 2022.

The across-the-board declines were attributed in large part to consumer concerns about cost, which overtook in convenience in March as the most important factor in determining where people shop and how they receive online orders for groceries. Another factor at play was the elimination of emergency Supplemental Nutritional Assistance Program (SNAP) benefits. More than 75% of households participating in SNAP lost their pandemic-related extra $95 per month in March.

In the survey, many consumers agreed that budget pressures are impacting their decisions, whether it’s where to shop at physical stores or how to order online. During March, 44% of households that used pickup or delivery services from a grocer or mass retailer said that “not paying more than necessary” was their most important criteria in choosing a particular online grocery service.

As a result, pickup continues to fare better as a fulfillment method. “Lower income households are more attracted to pickup services because it costs much less to use than delivery, due to the additional charges, fees and tips,” said David Bishop, partner at Brick Meets Click. “During March 2023, households earning under $50,000 annually were 34% more likely to use pickup while households making over $200,000 per year were over twice as likely to use delivery.”

Sylvain Perrier, president and CEO of Mercatus, suggested that traditional grocers focus on ways to maintain engagement with their existing shoppers. “Proven ways of growing your online revenue hinge on providing a great customer experience, encouraging your more loyal customers to use frequently, and benefiting from positive word-of-mouth advocacy that will attract others to use your online services,” Perrier pointed out.