Walmart continues growing its share of online grocery dollars

Online grocery sales had a good third quarter, but the majority of the growth again went to mass merchandisers like Walmart at the expense of traditional grocers, according to Brick Meets Click’s Q3 report.

The third quarter saw online grocery sales jump 13.8% to $27.4 billion, with the biggest growth (25%) going to delivery orders, the U.S. eGrocery Market Share Report noted.

Ship-to-home and pickup orders also grew during the quarter at 15% and 5%, respectively.

Mass merchandise stores experienced a sales share increase of 390 basis points to 52.7% in delivery year over year for the quarter. Meanwhile, supermarkets saw their market share slide 250 basis points to just under 38%, the report noted. 

The mass merchandise category also grew its ship-to-home business, which increased 150 basis points to 16.4% “mainly at the expense of Amazon,” the report added. The Seattle-based online retail giant dropped 100 basis points year over year to capture 50.1% of the segment. 

While ship-to-home and delivery were good for mass merchandisers for the quarter compared to last year, the big box retailers saw their share of the pickup market dip 70 basis basis points; however, they still captured well over half the segment at 56.1%. 

The segment shift in delivery for mass merchandise operations was “likely due to the membership push by Walmart that is boosting demand for delivery.”

David Bishop, a partner at Brick Meets Click, said in the press release that the results of the Brick Meets Click/Mercatus Grocery Shopping Survey show the importance of retailers strengthening their value proposition and evolving with shopper expectations. 

“Mass, and Walmart in particular, have demonstrated the value of better understanding online shoppers’ preferences while also leveraging its vast store network and digital reach to grow faster than the overall market,” Bishop said. 

Overall monthly active users grew 200 basis points to 56% year over year for the quarter, and those who spent a quarter or more of their weekly grocery budget online was up 3 percentage points compared to the same period last year.

Total grocery spending online climbed to make up 14.6% of the overall grocery market for the quarter. 

The trend of cross-shopping online will remain problematic for traditional grocers for the foreseeable future, the report noted. A third of all monthly active users in Q3 also made online purchases through mass merchandisers. 

“To compete effectively against giants like Walmart, supermarkets must deepen their customer connections and enhance their service,” said Mark Fairhurst, chief growth officer at Mercatus. “Leveraging customer insights is crucial for creating personalized experiences and offering targeted savings to customers — but that's only possible when retailers can effectively operationalize the data."