The U.S. online grocery market finished 2023 with $95.8 billion in total sales, down 1.2 percent compared to 2022, according to the annualized results from the monthly Brick Meets Click/Mercatus Grocery Shopper Survey.
A decline in order frequency by online grocery shoppers was the primary factor driving the lower sales in 2023.
The multi-year analysis is based on more than 21,000 survey responses collected each year during 2021, 2022 and 2023 from adults, 18 years and older, who participated in the household’s grocery shopping.
Order frequency among monthly active users (MAUs) contracted for the second year in a row in 2023. The average number of monthly online grocery orders completed (including all receiving methods) fell 6 percent versus 2022, following a 4 percent decline in the previous year.
Contributing to the year-over-year contraction was an increase in the share of MAUs who made only one eGrocery order per month, which rose more than 300 bps to 34 percent in 2023.
Average order value, not adjusted for price inflation, rose 3 percent in aggregate in 2023 versus the prior year. Each receiving method posted year-over-year increases: delivery AOV grew by 3 percent, pickup increased by 2.6 percent and ship-to-home rose 1.7 percent over 2022.
The overall MAU base, which includes all three receiving methods, climbed 2 percent compared to the previous year. However, there was a 172-bps increase in the share of MAUs who used one method exclusively (pickup, delivery or ship-to-home) to receive their online grocery order(s), and 70 percent of MAUs fell into this single-method user category in 2023.
“These annual results show that 2023 was very challenging for grocery retailing as higher prices chipped away at household purchasing power even though inflation has slowed considerably since its peak in 2022,” said David Bishop, partner at Brick Meets Click.
“Despite the challenges, pickup continues to prove its appeal to shoppers, even without the benefits of expanded availability and/or aggressive promotions that aided Delivery in 2023.”
Cross-shopping rates continued to increase in 2023. The percentage of households who bought groceries online from both Grocery (Supermarket plus Hard Discount) and Mass during the same monthly period rose 150 basis points versus 2022. As a result, 30 percent of the Grocery MAU base also shopped for groceries online with a Mass retailer’s service during the same month in 2023.
The composite repeat intent rate for pickup and delivery services associated with grocery and mass formats slipped by 63 bps to finish at 61 percent in 2023, and that downturn was due solely to declining repeat intent for grocery services, not mass. The share of MAUs who were extremely or very likely to use the same service again within the next 30 days climbed 48 bps to 66 percent for mass while it fell 311 bps to 54 percent for Grocery.
“As Walmart grabs market share through its price leadership and omnichannel strategies, regional grocers find themselves in a precarious position. To remain competitive, they must intensify their efforts in improving customer engagement, offering tailored personalization, and building loyalty. This strategic shift is not just about weathering the storm of price inflation and intense competition, but about thriving in it,” said Mark Fairhurst, global chief growth officer at Mercatus.
“By providing a shopping experience that is both seamless and highly personalized, grocery retailers can retain their existing customer base and gradually attract a wider audience.”
In terms of share of wallet, online’s share of total grocery spending in 2023 pulled back by 18 bps versus the prior year to 12.5 percent based on the last week of spending in each month of the year across all retail formats.
Excluding ship-to-home, as most supermarkets don’t offer this service, the combined pickup and delivery segments fared slightly better, falling just 6 bps compared to 2022 and finishing the year with a 10.4 percent share of total grocery spending.
About this 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. 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 the U.S. Census Bureau.
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