Retail Channels

Over half of US households ordered online groceries in December

Egrocery sales were just shy of record highs as mass retailers gained, according to Brick Meets Click and Mercatus.

A sign that says pickup

(Photo courtesy of Walmart)

U.S. egrocery sales finished 2022 near record highs, offering another sign that the pandemic uptick in this ecommerce category is proving to be sticky.

Key data from the Brick Meets Click/Mercatus Grocery Shopping Survey for December 2022, fielded Dec. 28-29, is as follows:

  • Total sales reached $9.1 billion, growing 2.4% year-over-year.
  • That’s just shy of the all-time record, recorded during Q1 of 2021, which was $9.3 billion.
  • More than half of US households ordered groceries online during the month, which was up 4% year-over-year.

Here’s a look at key data by category of egrocery:

  • Pickup sales were up 14.7% year-over-year
  • Delivery was down slightly to 1.8%
  • Ship-to-home fell 16.2%

via Brick Meets Click/Mercatus

Mass appeal

Mass retailers, which include multicategory stores like Walmart, Amazon and Target, were the biggest contributor to gains, outpacing contributions from pure-play grocers. The monthly active user base at mass retailers grew nearly three times faster than the overall MAU base, accounting for nearly half of the total MAU base on the month. Mass AOV also grew three times faster than grocery, with a year-over-year increase of 12%.

It’s true that mass retailers have been attracting new shoppers amid inflation as people seek lower-price options to stretch dollars. That was on view in December, as more than 30% of users cross-shopped at both mass and grocery retailers. But mass retailers have also continued to improve the ecommerce capabilities, creating a better experience for customers.

The two trends are connected. Walmart executives illustrated this on their recent earnings call: The retailer is seeing more affluent customers seek it out as they look to save money. At the same time, Walmart is working to keep these customers coming back by bolstering pickup and delivery, as well as increasing perks through the membership program Walmart+.

“The investments that mass retailers have put into their pickup services are a significant driver of the format’s gains,” said David Bishop, partner at Brick Meets Click, in a statement. “And while lower prices are a contributing factor in the growth of the mass MAU base, being able to more consistently execute at the store level is also helping to strengthen retention and engagement with existing customers, especially when compared to grocery.”

Hammering the point home, mass retailers also outperformed grocery stores when it comes to repeat intent rates, which measures the likelihood that customers will use digital grocery again. In this category, mass and grocery were about even in 2021. Now, mass has an advantage of more than 10 points.

This serves notice to pure-play grocers that the competition for share is only picking up. With sales continuing to grow, adding digital capabilities is just as much a must now as it was at the start of the pandemic.

“Regional grocers have many opportunities to improve the customer experience and the profitability of operating an online grocery service today,” said Sylvain Perrier, president and CEO at Mercatus. “From our ongoing work and research into online customer behavior, we’ve learned how important it is to develop a strategy that makes sense both financially and operationally, and that builds on how a grocer is positioned in the market and with their core customers.”

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