As many households engaged in back-to-school activities, the online grocery market in the U.S. grew 8.7% compared to last year, ringing up $9.3billion in sales for August 2023, according to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey fielded August30-31, 2023.

Topline

Household demand for both Pickup and Ship-to-Home was strong during the month, while Delivery experienced a slowdown in order volume and Mass continued to attract many more customers than Supermarkets.

Cross-shopping rates between Grocery and Mass continued to climb, increasing 490 basis points versus last year to finish the month at 34%. This is the highest level of cross-shopping to date and more than twice that of pre-COVID levels recorded in August 2019.

Key Findings: August 2023 YOY

More households buying groceries online

Shopper interest in buying groceries online remained strong as the August monthly active user (MAU) base expanded nearly 5% compared to a year ago, which reflects households that completed one or more online orders received via Pickup, Delivery, or Ship-to-Home.

Analyzing the respective MAU bases for each of the three methods showed that Ship-to-Home expanded by over 9% and Pickup increased by nearly 6%, while Delivery was up less than 1%.

Order volume reflects strong household demand.

The total volume of eGrocery orders placed during August 2023 grew 5% versus 2022, driven almost entirely by the expansion of the MAU base rather than a change in order frequency by MAUs which was essentially flat versus last year.

Order volume growth was unevenly distributed. Delivery, the only method to post a decline in order volume,fell almost 5%, while Pickup and Ship-to-Home climbed 9% and 10% respectively compared to 2022.

The results also revealed that Amazon’s pure-play segments (e.g.,marketplace, Subscribe & Save) contributed significantly to Ship-to-Home’s strong performance as its volume finished up over 10% higher than last year.

Pickup has the highest gain in AOV.

The combined average order value (AOV) for all three fulfillment methods grew 3% versus the prior year in August, which is below the current rate of inflation for the wider variety of grocery-related products that regional grocers often sell and extends beyond the Food-at-Home category.

For grocers, it is important to see the specific trends for each method as Pickup posted the highest gain of 6%, followed by Delivery, up 4%, and Ship-to-Home, up 3%, compared to a year ago.

Mass and Supermarket formats continue to perform very differently.

Trends for the two formats with the largest MAU bases, Mass and Supermarket,continued to diverge from each other in two of three key performanceindicators.

The Mass MAU base surged by almost 20% in August while Supermarkets contracted by more than 10%.

Similarly, order frequency for Mass rose in the low single-digits but fell in the mid-single digits for Supermarkets versus theprior year. AOV was the only metric where both Mass and Supermarkets reported comparable gains versus last year.

Cross-shopping between Grocery and Mass reaches highest rate to date.

Cross-shopping rates between Grocery (which includes Supermarket and Hard Discount formats) and Mass continued to climb, increasing 490 basis points versus last year to finish the month at 34%. This is the highest level of cross-shopping to date and more than twice that of pre-COVID levels recorded in August 2019.

Gap in repeat intent rates between Mass and Grocery narrowed.

The gap in repeat rates shrank slightly in August as the share of Grocery customers who indicated that they are extremely or very likely to use the same service next month improved nearly two points to 60% while Mass remained relatively unchanged at 68%.

Share of total spending slipped YOY.

The share of spending that online captured in August versus the same period last year slipped 20 bps to 13.9%.

Excluding Ship-to-Home, since most conventional supermarkets don’t offer it, the adjusted contribution from Pickup and Delivery finished at 11.5%, down 20 basis points compared to a year ago, due to Delivery’s weaker performance during the month.

Sponsor Message & Appreciation

“Online customer loyalty is increasingly elusive, and grocers should focus on creating more seamless experiences that keep shoppers – especially the first-timers – coming back,” said Sylvain Perrier, president and CEO, Mercatus. “By providing personalized recommendations and promotions, based on shopping history and personal preferences, grocers can strengthen connections with their customers that go beyond simply the transaction and increase the likelihood of repeat business.”

We thank the team at Mercatus for their continued generous support of this research. Click here to see the Sept. 12, 2023 press release.

About this consumer research

The Brick Meets Click/Mercatus Grocery Shopping Survey is an ongoing independent research initiative created and conducted by Brick Meets Click and sponsored by Mercatus. Brick Meets Click conducted the survey on August 30-31, 2023,with 1,704 adults, 18 years and older, who participated in the household’s grocery shopping.

The three receiving methods for online grocery orders are defined as follows:

• Delivery includes orders received from a first- or third-party provider like Instacart, Shipt or the retailer's own employees.
• Pickup includes orders that are received by customers either inside or outside a store or at a designated location/locker.
• Ship-to-Home includes orders that are received via common or contract carriers like FedEx, UPS, USPS, etc.

Results were adjusted based on internet usage among U.S.adults to account for the non-response bias associated with online surveys.Responses are geographically representative of the U.S. and weighted by age to reflect the national population of adults, 18 years and older, according to theU.S. Census Bureau. Brick Meets Click used a similar methodology for each of the surveys conducted in 2023 – July 29-30 (n=1795), June 29-30 (n=1,769), May 30-31 (n=1,792), Apr. 28-29 (n=1,746), Mar. 30-31 (n=1,742),  Feb. 26-27 (n=1,745), Jan. 30-31 (n=1,735);in 2022 – Dec. 28-29 (n=1,715), Nov. 29-30 (n=1,749), Oct. 28-29 (n= 1,732), Sept. 29-30 (n=1,752), Aug. 29-30 (n=1,743),July 29-30 (n=1,690), June 29-30 (n=1,743), May 28-29 (n=1,802),  Apr. 28-29 (n=1,746), Mar. 28-29 (n=1,681),Feb. 26-27 (n=1,790), and Jan. 29-30 (n=1,793); in 2021 – Dec. 29-30 (n =1,836), Nov. 29-30 (n=1,785), Oct. 29-30 (n=1,751), Sept. 28-29 (n=1,728), Aug.29-30 (n=1,806), July 29-30 (n=1,892), June 27-28 (n=1,789), May 28-30(n=1,872), Apr. 26-28 (n=1,941), Mar. 26-28 (n=1,811), Feb. 26-28 (n= 1,812),and Jan. 28-31 (n=1,776); in 2020 – Nov. 11-14 (n=2,067), Aug. 24-26 (n=1,817),Jun. 24-25 (n=1,781), May 20-22 (n=1,724), Apr. 22-24 (n= 1,651), and Mar.23-25 (n=1,601); and in 2019 – Aug. 22-24 (n = 2,485).

Photo credit: Cindy Christian, Brick Meets Click.