Online grocery sales down 1.2% in June

Despite a slight month-over-month increase in online grocery shoppers in June, the e-commerce segment of the supermarket industry continues to decline from last year, according to Brick Meets Click/Mercatus Grocery Shopping Survey data released Monday.   

The survey of 1,769 shoppers showed that total online grocery sales in June came in at $7.1 billion, for a year-over-year decline of 1.2%, according to the report. 

Monthly active users buying online increased marginally, by just over 1%, and the average order value was up 3%, but the average number of orders completed in the month dropped by 5%. 

Nearly 70% of shoppers used only one method to receive their online orders, with the majority (56%) choosing to pick up their groceries from the store. That’s a 1.4% increase from the same period last year, the report noted.  

Orders shipped to the home was the second most popular method at 41%—down 390 basis points—while delivery dropped 250 basis points to 39%. 

It was the second month in a row for pickup sales to buck the trend of online grocery sales declining, according to the report. In June, pickup sales grew 3.2% year over year and made up 49% of all e-commerce grocery sales, up 2% from last year.  

The decline in delivery also followed a two-month trend, with sales dropping 2.5% from the same time last year. The decline put the category’s share of the online sales pie down 50 basis points to just under 35%. The monthly-average-users category was down 5%, while the average order value jumped 7% year over year. 

Ship-to-home customers dropped by 9.7% compared to June of 2022 and made up only 17% of all e-commerce grocery purchases. Its portion of e-commerce sales was down 150 basis points from the same time last year. The average order value was down 1% year over year. 

“To elevate customer engagement, regional grocers need to improve the perceived value associated with the online shopping experience,” advised Sylvain Perrier, president and CEO, Mercatus. “To achieve this, grocers can focus their efforts on areas like leveraging personalized recommendation algorithms to provide more relevant product suggestions based on individual preferences and past purchases, optimizing the platform’s usability to reduce points of friction, and offering personalized discounts, digital coupons and loyalty rewards.” 

Overall, online spending on groceries dropped 230 basis points to 11.9% for the month. Pickup and delivery orders combined made up about 10% of the online grocery spend, down 160 basis points from the same time last year.  

Looking at just the first half of 2023, grocery spending online was down 1.8% year over year, with pickup sales up 1.3%, delivery down 2% and ship-to-home sales down 9%. The total contribution of e-commerce grocery sales also dropped 100 basis points to 12.3% year over year. Pickup sales gained 140 basis points for the first half of the year, for 47.1% of e-commerce grocery sales. Delivery held steady at 35.9% and ship-to-home dropped 130 basis points to 16.9%. 

“Our 5-year forecast anticipated that 2023 would be a challenging year for eGrocery, so these results generally align with our expectations,” said David Bishop, partner at Brick Meets Click, in a statement. “So, while ship-to-home declines and delivery has mixed results, pickup’s stronger performance isn’t surprising as it is becoming more widely available and helps customers who want to shop online save money, which is certainly helpful in the current market.” 

Meanwhile, SymphonyAI Retail CPG, a Palo Alto, California-based data analytics firm, reported that an analysis of more than 58 million shoppers and purchase data of U.S. and European shoppers showed that more than half (52%) of e-commerce grocery shoppers dropped their online grocery store shopping over the last year.  

About 60% headed back to their retailer of choice’s brick-and-mortar location, but the remaining 40% left the retailer altogether, the report notes.  

Total online revenue growth was down a mere 1% in the first quarter of the year, compared to the year prior, but the total number of online shoppers dropped 14%. The discrepancy is due to new shoppers offsetting those who departed, the report noted.  

“The overall decline in online customers and their impact on e-commerce growth is significant,” said Laetitia Berthier, head of client engagement, SymphonyAI Retail CPG, in a statement. “Contrary to expectations, the losses are coming not from shoppers who were forced online during the height of the pandemic, but rather those shoppers who had moved online after the pandemic. It’s critical for retailers to understand those customer dynamics and their fast-changing needs to succeed in the critical online channel.”