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February eGrocery sales at $8.8 billion, mass retailers up while grocery falls

By
Craig Levitt, managing editor

The online grocery market finished last month with $8.8 billion in total sales, up 1.5 percent compared to last year, according to the monthly Brick Meets Click/Mercatus Grocery Shopping Survey. Excluding Ship-to-Home sales, the core eGrocery segments of Delivery and Pickup slipped 1.2 percent compared to last year, which reflects a drop of almost 9 percent in Delivery sales and a gain of nearly 5 percent for Pickup during the month.

The year-over-year growth in eGrocery sales was partly driven by an increase in monthly active users, which climbed more than 5 percent in February compared to the same period in 2022.  This marks the second straight year-over-year expansion of the user base as it grew over 10 percent between February 2021 and February 2022.

“The expanding user base for online grocery illustrates its growing reach, but the changing role it plays is evident from contractions in the use of multiple receiving methods and average order frequency, which mostly muted the gains in reach,” said David Bishop, partner at Brick Meets Click.

The research showed that more U.S. households used only one of the three receiving methods for online orders in February, jumping nearly 8 percent versus last year and returning to levels similar to February 2021, which hovered around 72 percent.

In addition, the number of orders completed by MAUs fell to its lowest level since the onset of the pandemic in March 2020, finishing the month at 2.5 and down almost 9 percent on a year-over-year basis. While all three receiving methods experienced this downtrend to some degree, Delivery posted the largest and most dramatic drop in order frequency.

Spending per order was higher across all three receiving methods in February versus year ago, but only Ship-to-Home posted an average order value that exceeded the rate of grocery inflation. The combined AOVs for Pickup and Delivery gained just over 5 percent versus February 2022 while Ship-to-Home’s 14 percent growth in AOV was boosted by an easier comparable period as last year’s AOV which was one of the lowest recorded to date for Ship-to-Home.

Looking at specific formats, Mass continued to attract more customers on a year-over-year basis while Grocery contracted again. In February, the Mass MAU base surged more than 20 percent versus 2022 after a similar surge last month. In contrast, the Grocery MAU base contracted in the mid-to-upper single digits for at least the second straight month.

“The changes in the Mass and Grocery user bases illustrate what could be characterized as a ‘flight to value’ as shoppers deal with persistently higher grocery prices,” said Bishop. “Another sign of inflation’s impact on eGrocery ordering patterns is the continued growth that Pickup has experienced over the last few months while Delivery has encountered a pullback in users.”

Since December 2022, Pickup has steadily posted gains in its MAU base while Delivery has reported declines. In February 2023, Pickup service was used by 1.5 times more households than Delivery.

Meanwhile, cross-format shopping between Grocery and Mass remained near 30 percent for the month and was up 300 percent versus a year ago. The share of Grocery MAUs who also bought groceries online from Walmart in the month climbed nearly 5 percent to almost 22 percent; in contrast, cross-shopping with Target declined by nearly 3 percent.

“Given that ongoing price inflation is clearly influencing shopping behaviors, grocers should promote ways customers can save more money,” said Sylvain Perrier, president and CEO of Mercatus. “Grocery retailers can consider highlighting store brands, offering pricing promotions, creating personalized digital coupons, and implementing variable fee structures that lower fees for customers and reduce the cost to assemble.”

Craig Levitt

Craig Levitt

About Craig Levitt  |  email

When his dreams of becoming a professional hockey player came crashing down due to lack of talent, Craig Levitt turned to journalism. He graduated from Hofstra University in 1992 and has covered various areas of the retail food trade since 1996. Craig joined The Produce News in 2017 and is now managing editor. In his spare time, Craig still plays men’s league hockey (poorly) and enjoys walking the aisles of his favorite supermarket with his wife and two daughters.

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