The U.S. online grocery market finished June with $7.7 billion in monthly sales, an 8% increase over last year. Delivery sales surged after aggressive promotions last month, ship-to-home posted strong results due to increased spending per order, and pickup held steady year-over-year, according to the Brick Meets Click/Mercatus Grocery Shopper Survey.
“Delivery’s strong performance in June likely benefited from the promotional offers made last month, first by Instacart and then by Walmart,” says David Bishop, partner at Brick Meets Click. “These promotions focused on delivery and offered deep discounts on each service’s annual membership fees, which helped boost both MAUs and order frequency for delivery and for Walmart.”
Key takeaways:
- In June, delivery sales jumped to $2.9 billion, up 18% compared to a year ago. The year-over-year gain was driven by surges in the monthly active user (MAU) base and higher order activity although the average order value (AOV) fell somewhat.
- June’s pickup sales of $3.5 billion remained essentially unchanged on a year-over-year basis even though the MAU base for pickup expanded in the mid-single digit range. A combination of slightly lower AOV and a decline in order frequency offset the positive effects of a larger MAU base.
- Ship-to-home sales climbed nearly 10% vs. last year to $1.3 billion for June, marking its fourth straight month of year-over-year sales gains. Higher AOVs drove the sales lift despite a 1% contraction in its MAU base and a dip in order frequency. Ship-to-home finished June with almost 17% of e-grocery sales, up 26 bps compared to a year ago.
- The overall e-grocery MAU base expanded nearly 4% vs. June 2023, driven almost entirely by reactivating lapsed users. In contrast, the total pool of households that have ever bought groceries online grew just 14 bps over the same period.
- Cross-shopping rates for June remained elevated as nearly one in three customers bought online from both grocery and mass formats during the past month. The share of grocery customers (which includes both supermarkets and hard discounters) that also received an online grocery order from a mass retailer in June finished at 31.6%, and the share of grocery customers who received online orders from Walmart specifically reached nearly 22%, up 150 bps vs. last year.
"Regional grocers need to stem the tide and regain market share by leveling the playing field against mass merchants, despite these rivals having a price advantage," says Mark Fairhurst, chief growth officer at Mercatus. "Integrating personalized and targeted promotions into their first-party platform experience will be key to re-engaging lapsed customers and improving repeat purchase rates. Additionally, incorporating high-level, in-store customer service into the digital experience – a strength that regionals are known for – will be crucial and can give them an advantage over their mass competitors."
