Egrocery sales declined 7.6% in March as shoppers looked to save

As shoppers consider whether to buy groceries online, cost concerns are taking priority.

That’s what the March results of the monthly Brick Meets Click/Mercatus Grocery Shopping Survey show, according to the authors.

Key U.S. egrocery data for March includes the following:

• Sales were down 7.6% year-over-year, reaching $8 billion.
• Delivery sales were down 7.4%.
• Pickup sales fell 8.5%.
• Ship-to-home sales decreased 5.9%.
• Online share of grocery spending fell to 12.7%

Inflation has been driving prices for essentials higher for months, particularly in food. That’s leading consumers to think twice about spending choices. The survey found that cost rose above convenience as the top consideration for online grocery shoppers.

When it comes to choosing which grocery ecommerce service to use, 44% of households indicated that “not paying more than necessary” was the top criteria. But there was some divergence by category. Households using pickup reported a 420-basis-point rise in cost considerations, while households using delivery reported a 140-basis-point gain.

Cost is also the top consideration when consumers are choosing whether to opt for pickup or home delivery.

“Lower income households are more attracted to pickup services because it costs much less to use than Delivery, due to the additional charges, fees, and tips,” said David Bishop, Partner at Brick Meets Click, in a statement. “During March 2023, households earning under $50,000 annually were 34% more likely to use pickup while households making over $200,000 per year were over twice as likely to use delivery.”

The survey also found declining repeat orders. Monthly order frequency fell to its lowest level since March 2020, when the pandemic altered in-person life. Meanwhile, the likelihood that a customer would use the same service fell to 61%, down 290 basis points from 2021.

Cost considerations are also likely pushing more shoppers to mass retailers such as Walmart and Target as opposed to pure-play grocers. Order frequency fell just 2% for mass, while the drop was 10% for grocery.

Still, there are signs that Walmart is continuing to hold strong despite the tougher retail environment. The rate of shoppers who went to both Walmart and a grocery store during the month was unchanged, while Target’s rate fell 280 basis points. Walmart executives have reported seeing more affluent shoppers during this period, and they are offering a recently-expanded ecommerce offering to serve them. It shows that the combination of price and digital services can continue to attract shoppers, even when they are increasingly “choiceful,” as Walmart executives put it.