Online Grocery Sales Rise 8.7% YoY in August
Online grocery sales in August spiked 8.7% year-over-year, fueled by back-to-school shopping, according to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey fielded Aug. 30-31.
Of the three methods, Ship-to-Home saw an increase of more than 9% in August, Pickup increased by nearly 6%, while Delivery was up less than 1%. The total volume of online grocery orders placed during August 2023 grew 5% versus 2022, driven almost entirely by the expansion of the monthly active user (MAU) base instead of a change in order frequency by MAUs, which was essentially flat versus last year.
Order volume growth was unevenly distributed, as Delivery was the only method to post a decline in order volume, falling almost 5%. Pickup and Ship-to-Home grew 9% and 10% in August respectively compared to 2022. According to Brick Meets Click, 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 order volume finished up over 10% higher than last year.
“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,” said David Bishop, partner at Brick Meets Click. “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.”
Trends for the two formats with the largest MAU bases, Mass and Supermarket, continued to split from each other in two of three key performance indicators. The Mass MAU base surged by almost 20% in August while Supermarkets shrank 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 the prior year. AOV was the only metric where both Mass and Supermarkets reported comparable gains versus last year.
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%. Brick Meets Click said this is the highest level of cross-shopping to date, and more than twice that of pre-COVID levels recorded in August 2019. 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%.
“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.”