Online grocery sales set another record in May, increasing 24 percent over April sales, to reach $6.6 billion, according to the Brick Meets Click/Mercatus Grocery Survey fielded May 20-22. The survey is part of Brick Meets Click’s monthly monitoring of COVID-19’s impact on consumer behavior and is the third wave of research focused on identifying insights and implications for retailers and brands.
“COVID-19 is affecting the way people shop for groceries, and this research helps retailers to better understand where they need to invest in their online and in-store businesses,” said David Bishop, partner, Brick Meets Click.
The May Scorecard shows how the key performance metrics related to online grocery delivery and pickup service activity have all grown over the past three months.
The total number of online grocery orders increased 18 percent on a month-over-month basis from 62.5 million in April to 73.5 million in May. This increase was driven by expanded capacity associated with retailers who reopened their services and others who added more time slots to better meet the surge in demand for these essential shopping services. Household penetration hit 33 percent in May (up from 31 percent in April) as approximately 43 million customers shopped online for groceries during the previous 30-day period.
“COVID-19 has accelerated online grocery adoption at a rate the industry hadn’t expected to see for years,” said Sylvain Perrier, president and CEO, Mercatus. “The online surge may level off slightly as various states strive to return to ‘normal.’ However, what has changed in shoppers’ eyes is the realization of the immediate benefits of online grocery shopping.”
May’s average monthly purchase frequency climbed 10 percent versus April, illustrating that online grocery shopping is becoming more established among a broader base of households. In fact, active households in May placed an average of 1.7 online grocery orders for either delivery or pickup, up from 1.6 online orders in April.
The average order value climbed nearly 6 percent to $90 in May, an increase of almost $5 compared to April. Higher consumer prices starting in April, improvements in product availability, and more customers becoming comfortable with online grocery shopping all contributed to this trend.
Beyond the scorecard metrics, the new research showed a rebound in shopper satisfaction from the March low. In May, 56 percent of customers were extremely or very likely to shop the same provider again within the next 30 days, compared to 47 percent in March and 50 percent in April. Even at 56 percent, purchase intent is still considerably lower than pre-COVID rates, which were closer to 80 percent, according to previous Brick Meets Click research.
The economic impact triggered by COVID-19 is affecting an increasing number of consumers. The number of U.S. households reporting a dramatic drop in income of 25 percent or more (versus earlier in 2020) reached almost 50 million for May. To reduce their grocery spending, many consumers are changing what they buy. This research found that on a net basis, 14 percent of the U.S. households who purchase private label reported that they bought more private label during May compared to prior the COVID-19 crisis.
“COVID-19 has made it clearer than ever that moving forward, trust between the retail brand and its shoppers is core to a healthy and long-term relationship,” explained Perrier. “Shoppers at every income level and demographic will continue to expect an efficient, effective and safe online order and fulfillment experience and will reward grocers who provide this with continued loyalty.”