Trendspotting: Online grocery sales down 10 percent compared to last year

The online grocery market finished November with $7.7 billion in total sales, down 10 percent compared to a year ago, but only 2 percent lower than the $7.8 billion reported for the two prior months, according to the monthly Brick Meets Click/Mercatus Grocery Shopping Survey.

The year-over-year decline in total sales was driven by fewer households buying groceries online, combined with lower order frequency and constrained spending per order among monthly active users. Delivery was the only method to maintain sales versus a year ago, and the downward pressures were more present in grocery formats than in mass.

The total number of households that ordered groceries online using any of the three receiving methods, delivery, pickup, or ship-to-home, contracted 7 percent in November versus last year. The decline was driven by a dramatic drop in the 60-and-older age group and a significant slide among the core customer segment of 30- to 44-year-olds. Compared to the prior year, the grocery MAU base contracted 5 percent while the mass base expanded by 6 percent as cost considerations grow in importance and customers seek to avoid unnecessary spending.

Cost was cited as the top factor in the choice of where to shop online by 42 percent of delivery and/or pickup MAUs in November, up from 37 percent in August 2020 when this question was first fielded. The share of mass MAUs who cited cost as the most important selection criteria has remained around 45 percent during that time, while the share of grocery customers who cited cost as their top reason increased from 25 percent in August 2020 to 38 percent in November 2022.

“When it comes to shopping online — especially for delivery or pickup — cost considerations include more than the price paid for a basket of products,” said David Bishop, partner at Brick Meets Click. “Many customers also evaluate the total cost associated with using the service, which can include special charges, standard fees, and tips. And, when comparing the total of these costs to the customer, there’s a sizable gap in favor of mass versus grocery.”