“Walmart and Instacart aren’t the only players using deep discounts to boost delivery demand,” said David Bishop, partner at Brick Meets Click. “Amazon, for example, in July offered a 90-day free Prime membership trial instead of the usual 30 days, along with unlimited grocery delivery. Similarly, DoorDash and Uber Eats are maintaining low or no delivery fees to increase their market share.”
Looking at trends in monthly active users (MAUs) by format and receiving method shows how the market is shifting. Both supermarkets and mass saw year-over-year increases in their MAU bases in July. Supermarket’s base grew twice as fast as last year, up about 7 percent, and mass posted a nearly 8 percent increase. Trends across the three receiving methods were mixed. Delivery’s MAU base expanded by more than 10 percent versus last year, ship-to-home’s expanded by almost 4 percent and Pickup’s contracted slightly, down by less than 2 percent.
“Intense competition in grocery delivery promotions is eroding regional grocers' control over customer interactions. While third-party marketplaces may boost short-term order volume gains, they also make it harder for grocery retailers to achieve the economies of scale needed to reduce operating costs,” said Mark Fairhurst, chief growth officer at Mercatus. “I’m not sure many grocers would jump at the opportunity to put a farmer’s market in their store parking lot, yet many are willing to do something similar when it comes to relying on marketplaces for their online business.”
On the volume side, overall frequency for July 2024 rose approximately 5 percent compared to the prior year. Delivery orders surged nearly 20 percent in the month, due to both more users and more frequent ordering by those users. Meanwhile, pickup order volume fell 3 percent versus July 2023 due to lower order frequency among a contracting MAU base. Growth in ship-to-home’s user base offset a dip in order frequency, resulting in a 2 percent gain in order volume during the month.
Analysis of the monthly results also found that households with annual incomes under $50,000 reported declines across the three key metrics — MAU base, order frequency and Average Order values (AOV) – bucking the broader eGrocery growth trends and illustrating how financial pressures are affecting online buying behaviors.