Online grocery sales remain flat in March, and local grocers still trail Walmart

Year-over-year online grocery sales remained flat for the month of March at $8 billion, but challenges remain for local grocers competing against the likes of Walmart.

The latest Brick Meets Click/Mercatus Grocery Shopper Survey shows March 2024 was still better than March 2023, which showed an 8% year-over-year drop, and it was also an improvement over March 2020, which was the initial month of the COVID-19 pandemic in the U.S. Online grocery sales the past March were 23% above March 2020 levels.

“While most people recognized that the pandemic was a catalyst for buying groceries online, few could fully anticipate the implications of that surge,” said David Bishop, partner at Brick Meets Click. “Now, four years after COVID-19 first impacted our everyday lives, eGrocery in the U.S. looks very different from both a contribution and growth perspective, and this will impact how grocers and others expand and drive profitability in their respective businesses moving forward.”

Pickup and delivery vaulted to the top as the preferred method of receiving groceries when ordering online when the pandemic started, and both continue to hold their lead over ship-to-home. Just over 43% preferred pickup in March 2024 (flat year over year) while 39.1% went with delivery (down 2.6% year over year). Meanwhile, ship-to-home picked up 5.9% in grocery online sales in March when compared to a year ago.

The total online grocery shopper pool (which consists of active and lapsed or infrequent users) expanded to include 78.6% of all U.S. households last month, which is up just 13 basis points from a year ago.

Mass retailers continue to gain strength in the online grocery business. Before COVID, only 15% of the customers who bought online from grocery (which includes supermarket and hard discount) also completed an online grocery order from a mass retailer during the same month. However, in March 2024 the cross-shopping rate stands at almost 27% as inflation continues to motivate some households to change where they buy groceries.

Walmart is the giant here, as the latest research found that 76% of households that primarily buy groceries from Walmart and who also buy groceries online completed one or more online grocery orders with Walmart in March 2024. For the households that primarily shop at a local supermarket and buy groceries online, only 60% of those households bought groceries online from a supermarket.

“Helping customers build their basket of goods by using tactics like personalized offers or targeted deals is not just key to growing sales but also to improving the chances that they’ll come back again,” said Mark Fairhurst, global chief growth officer at Mercatus. “For today’s grocers, keeping your online customers engaged is more important than ever as growth is now more likely derived from increased order frequency and/or spend per order.”

The inability to build a mobile app for shoppers is also hurting the local grocer. According to Brick Meets Click/Mercatus, Target and Walmart have invested heavily in enhancing the perceived value from using their mobile apps.