Is Inflation Causing Consumers to Choose Pickup Over Delivery?

Online ordering continues to post strong numbers—e-grocery sales in May reached $7.1 billion, 1.7% higher than a year ago, according to Brick Meets Click and Mercatus—but as inflation persists, consumers who enjoy the convenience of pickup and delivery “are also becoming more cost conscious.”

Pickup, which captured 45% of online grocery sales in May, rose 9% from last year, while delivery, with a dollar share of 36%, increased 5%, according to a Brick Meets Click/Mercatus Grocery Shopping Survey fielded May 28-29. (Ship-to-home, orders received via common or contract carriers such as FedEx and UPS, represented 19% of e-grocery sales in May and dropped 16% vs. the prior year.)

Pickup’s increase was driven by a more than 10% growth in its monthly active user (MAU) base, while delivery saw modest gains in MAUs, the companies said in a release. It’s also an indication that inflation is influencing where and how customers shop online.

“Customers appreciate the convenience of ordering online, but they are also becoming more cost conscious,” said Sylvain Perrier, president and CEO of San Mateo, Calif.-based Mercatus. “To defend the base business, Grocers can promote pickup to address both issues. Assuming the pickup experience aligns with customer expectations, showcasing the savings associated with pickup’s lower fees, no fuel surcharges or zero tips can better protect your online customers and sales by highlighting a more affordable alternative to home delivery.”

For mass and grocery customers using either pickup or delivery, the percentage who cited costs as the most important selection criteria rose 6 points, from 37% in August 2020 to 43% in May 2022, the Brick Meets Click/Mercatus survey found.

What’s notable, the companies said, is that the share of mass customers who cited costs as the top consideration remained relatively unchanged over this period, while the share of grocery customers who said the same rose more than 10 percentage points.

“Less than one-quarter of online grocery customers who shop with grocery or mass online use both Pickup and Delivery services, so the increased cost consideration within this group may actually drive more demand toward pickup,” said David Bishop, partner with Barrington, Ill.-based Brick Meets Click. 

More evidence that inflation is influencing where and how customers shop online comes from elevated cross-shopping rates. The share of grocery’s MAU base that also shopped online with mass during the month set a new record at 33%, nearly 4 percentage points higher than the previous record from December 2021, the Brick Meets Click/Mercatus survey found. Even though this elevated rate may be temporary, grocers could be at risk of losing customers to mass, the companies said