Dive Brief:
- Online grocery sales reached $7.9 billion in July, up more than 9% compared with the same month last year, according to data released Thursday by Brick Meets Click and Mercatus.
- Pickup accounted for about 42% of grocery e-commerce sales last month and delivery claimed a share of just over 40%. The ship-to-home channel accounted for 19% of the market.
- Delivery sales were up 22% in July even as pickup sales were flat, building on a pattern that gained steam during the previous month.
Dive Insight:
While pickup retained its position leading the online grocery e-commerce sector as measured by sales last month, delivery continued to march forward on multiple fronts as companies including Amazon, Walmart and Instacart cut fees to encourage people to sign up for membership programs.
The sharp discounts Walmart and Instacart offered on their membership programs helped generate growth in both the number of delivery users they saw and order frequency, Brick Meets Click and Mercatus said.
Almost a third of shoppers who bought groceries online from supermarkets or hard discounters in July also received an online grocery order from a mass merchant, the research showed.
“Intense competition in grocery delivery promotions is eroding regional grocers’ control over customer interactions,” Mark Fairhurst, Mercatus’ chief growth officer, said in a statement. “While third-party marketplaces may boost short-term order volume gains, they also make it harder for grocery retailers to achieve the economies of scale needed to reduce operating costs.”
The number of delivery orders recorded last month was almost 20% higher than the figure for July 2023, as both order frequency and the number of shoppers who opted for the fulfillment method increased, Brick Meets Click found. At the same time, pickup order volume was off by 3% as the channel’s monthly active user base and order frequency lost momentum.
The ship-to-home sector, which reflects online grocery orders fulfilled by third-party shippers like UPS and FedEx, notched a slight gain in order volume in July even as order frequency slipped.
Delivery’s base of monthly active users grew last month by more than 10% year over year, compared with a 2% drop for pickup. On the other hand, average order value for pickup slightly outpaced the comparable figure for delivery.
The data also showed that traditional supermarkets grew their base of monthly active users by 7% in July — twice the growth pace they recorded during the same period in 2023. Still, mass merchants managed to expand their monthly active user count at an even faster clip of nearly 8%.
The findings reflect a survey of 1,760 shoppers Brick Meet Click fielded July 30-31.