“When more than 10 percent of households have less money to spend on groceries this year than they did last year, changes in buying behavior are certainly expected,” said David Bishop, partner at Brick Meets Click. “The reduction in SNAP payments that took effect at the end of February 2023 is one of the factors driving the flight-to-value trend, which we’ve observed and tracked since mid-2023.”
The mass format, led by Walmart, continued to outperform the broader market. In total, mass expanded its MAU base by almost 10 percent while it also posted a healthy uptick in AOVs. In contrast, supermarkets endured ongoing headwinds as key performance indicators all struggled versus last year. The number of supermarket MAUs contracted by more than 5 percent, the average number of orders completed by MAUs during the month fell by a larger rate and the average dollars spent per order pulled back slightly.
Amazon’s pure-play online services, which account for the largest share of the ship-to-home segment, also saw improvements in performance compared to the prior year, but those improvements need to be put into context. Given the large MAU drop Amazon experienced in January 2023, this January’s MAU surge was driven partially by easier comparable results. Overall, Amazon’s year-over-year MAU gains more than offset the drop in order frequency, and moderate AOV gains also helped drive its positive sales results.
"Competing online is only getting more challenging for regional grocers as customer expectations continue to increase," said Mark Fairhurst, global chief growth officer at Mercatus. "So, beyond improving key elements of the experience, like fill rates, wait times and product quality, regional grocers also need to work even harder to identify additional ways to help their customers save money."
