March Online Grocery Sales Decrease Year-Over-Year

U.S. online grocery sales fell 7.6% year-over-year in March, totaling roughly $8 billion according to the monthly Brick Meets Click/Mercatus Grocery Shopping Survey.

Fielded March 30-31 2023, the year-over-year decline was driven by the large core eGrocery segments of delivery and pickup, which decreased 7.4% and 8.5% respectively, as well as ship-to-home which fell 5.9%. 

The decreases were largely due to cost considerations, according to the survey. In March, 44% of households that used a pickup or delivery service from a grocery or mass retailer said that not paying more than necessary was the most important criteria in selecting an online grocery service.

Another income-related factor that likely had a greater negative effect on pickup sales than delivery sales was the ongoing elimination of emergency SNAP benefits. March 2023 marked the first month that more than three-quarters of the households participating in SNAP lost the additional $95 per month in pandemic-related funds.

“Lower income households are more attracted to pickup services because it costs much less to use than delivery, due to the additional charges, fees and tips,” said David Bishop, partner at Brick Meets Click. “During March 2023, households earning under $50,000 annually were 34% more likely to use pickup while households making over $200,000 per year were over twice as likely to use delivery.”

The average number of online grocery orders completed by monthly active users (MAUs) continued to decline from pandemic highs, dropping to 2.42, the lowest level since COVID-19 began. Order frequency dropped 10% among grocery’s MAUs, but dipped just 2% for mass.

The online share of total grocery spending was also down in March, decreasing 160 basis points to 12.7% versus last year. Excluding ship-to-home, the adjusted contribution from pickup and delivery dropped 130 basis points and finished at 10.6% for the month.

“Now is the time for conventional grocers to prioritize maintaining engagement with existing customers,” said Sylvain Perrier, president and CEO, Mercatus. “Proven ways of growing your online revenue hinge on providing a great customer experience, encouraging your more loyal customers to use frequently, and benefitting from positive word-of-mouth advocacy that will attract others to use your online services.”