A new shopper survey from Brick Meets Click and Mercatus shows that online grocery sales are up 8% year over year and netted $7.7 billion in sales in June 2024.
The analytics company said delivery sales surged in June thanks to aggressive promotions and ship-to-home also showed strong sales with increased spending per order. Pickup remained steady year over year, according to the Brick Meets Click/Mercatus Grocery Shopper Survey fielded June 30-31, 2024.
Delivery sales hit $2.9 billion in June 2024, which is an increase of 18% from 2023 figures, according to survey results. Brick Meets Click and Mercatus said the data shows the increase is due to a higher monthly active user base and higher order activity. The average order value did decline slightly in June. Delivery gained 325 basis points verses last year and captured 38% of e-grocery sales in June.
“Delivery’s strong performance in June likely benefited from the promotional offers made last month, first by Instacart and then by Walmart,” said 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 [monthly active users] and order frequency for delivery and for Walmart.”
The survey showed pickup sales in June 2024 remained unchanged year over year at $3.5 billion. Monthly active users for pickup expanded slightly and a combination of lower average order value and a decline in order frequently offset the larger monthly active user base. Pickup came in at 45% of e-grocery sales but fell 352 basis points year over year.
Ship-to-home sales grew 10% year-over-year at $1.3 billion for June 2024. Brick Meets Click and Mercatus said this is the fourth straight month of year-over-year gains. The survey showed higher average order value drove the gains. Monthly average users and reduction in order frequency balanced out the gains. Seventeen percent of e-grocery sales were ship-to-home in June, and the category increased 25 basis points year over year.
The overall e-grocery monthly active user base expanded nearly 4% versus 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 basis points over the same period. The gap between these two measures highlights the fact that the increase in customers during June 2024 is largely due to less-frequent users making another order or lapsed customers who are giving the service another chance.
The survey results show cross-shopping in June 2024 remains high as 1 in 3 customers indicated buying groceries online and from mass formats in June and finished at 31.6%. In addition, 22% of grocery customers received online orders from Walmart, which is an increase of 150 basis points year-over-year.
The survey also showed overall intent rates — a measure of the likelihood that a customer will complete another online order in the next 30 days with the e-grocery service used most recently — dropped 7 percentage points year over year at 56%. Brick Meets Click and Mercatus said this drop is driven by the most frequent users of a given service — those who completed four or more orders in the past three months — dropping 10 percentage points year over year. The survey also showed repeat intent rate dropped by twice as much as the mass repeat intent rate year over year.
Results show mass format expanded its share by 190 basis points year over year, or 42%, in June. Supermarkets dropped 250 basis points to 39%. Brick Meets Click and Mercatus said households with annual incomes of under $50,000 shopping for groceries at a mass retailer attributes for the drop.
“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,” said 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.”
Related link: More information about the June 2024 results.
