May online grocery sales dip year over year, stay strong vs. pre-pandemic
U.S. online grocery shopping reached $7 billion in May, a 16% decline compared with a year ago, but total online sales for the month remained 3.5 times higher than pre-COVID levels ($2 billion in total sales in August 2019), according to Brick Meets Click and Mercatus Grocery and its ongoing grocery shopping survey.
The overall decline was seen in monthly active users, order frequency and average order value, versus a year ago, when the pandemic was in full swing, but the study showed online grocery shopping is still strong. Monthly active users placed an average of 2.80 online orders during May 2021, down slightly from the record high of 2.91 orders set one year ago, the study said.
“As the business laps very tough year-over-year comparisons, it is essential to put monthly performance into perspective and keep an eye on the big picture,” said David Bishop, partner, Brick Meets Click. “May’s results show the market retains 70% of the incremental gains generated versus the record COVID high of $9.3 billion, illustrating that much of the gain propelled by the pandemic has stuck around.”
The research created and conducted by Brick Meets Click and sponsored by Mercatus, found that 66.8 million U.S. households bought groceries online in May, a 12% drop vs. a year ago. Having orders ready for pickup also maintained its hold as the top preferred way to get online groceries, used by 55% of monthly active users in May, up over four points versus last year.
“Usage trends signal the increased acceptability and/or value that pickup provides a grocery customer compared to delivery or ship-to-home,” Bishop said. “Pickup not only costs the customer less, but also gives them greater control over the quality of temperature-sensitive products. Pickup has remained the dominant method since the beginning of 2021.”
The May 2021 results revealed that nearly 30% of monthly active users received online orders only via pickup; another 17% received online orders only via delivery.
The repeat intent rate, which measures the likelihood that a monthly active user will order again in the next month with the same grocery service, shrank four percentage points compared to a year ago, coming in just under 53%. While capacity constraints are less of an issue this year, the continued growth of cross-shopping between grocery and mass merchandise is likely a contributing factor to the decline.
“May’s choppiness in online sales is to be expected as the country opens, and consumers shift spending to things like travel and food away from home,” said Sylvain Perrier, president and CEO, Mercatus. “It’s more important than ever that regional grocers focus on strengthening their competitive positioning and improving the customer experience. Retailers would benefit from segmenting their online shopper base, knowing their preferences and interests, and taking advantage of solutions that help personalize the experience and lead to larger baskets.”