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Egrocery sales down 1.2% to start 2023, repeat intent raises 'red flag'

Brick Meets Click found a big gap between ecommerce sales at mass retailers and grocery stores.

a sign that says pickup

(Photo courtesy of Walmart)

U.S. egrocery sales ticked down slightly to start the year.

Brick Meets Click and Mercatus provided the following data for January 2023:

Total egrocery sales were $8.4 billion, down 1.2% year-over-year.

Total user base for egrocery sales declined 1.6% for the year, as the number of 30-44-year-olds dropped 5%.

Order frequency also declined, continuing a long-term trend since May 2020.

Ship-to-home sales dropped 15%, driving the drop.

Pickup increased 3%, showing strong gains.

Online grocery sales totaled 12% of overall grocery sales.

brick meets click

US egrocery sales for January (Courtesy of Brick Meets Click/Mercatus)

Mass vs. grocery

In egrocery, the story continues to be the dichotomy between mass retailers such as Walmart and Kroger, and grocery stores such as Kroger.

In January, the mass category saw a 20% increase in monthly active users. Meanwhile, the grocery MAUs shrank by 6%.

Mass retailers offering price breaks are continuing to be an attractive option, especially as prices remain high amid inflation. Still, there is crossover, as about 3 in 10 households that shop at a mass retailer also shop at a grocery store.

Repeat intent rates were also down. The likelihood that a customer will use the same service within the next 30 days dipped by about two percentage points over the year to 60%. In a “troubling sign” BMC said that this was driven by frequent customers who typically spend more per order.

Grocery also trailed in this measure, recording the largest gap in repeat intent with mass since measurement began at 14%.

“This large gap in repeat intent is concerning and should raise a red flag for conventional grocers,” said David Bishop, partner at Brick Meets Click, in a statement. “While our monthly research didn’t examine the causes for the variations between Grocery and Mass, it could be associated with a number of variables, including product pricing, service-related costs, or differences in customer experience, so grocers may want to analyze what are the main culprits driving their respective rates lower.”

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