Barrington, Ill. – August 15, 2024 – The total U.S. online grocery market ended July 2024 with $7.9 billion in monthly sales, a 9.2% increase over last year.
Delivery sales surged 22% in July, aided by continued promotional efforts. Ship-to-Home also posted strong results, climbing 6%, and Pickup held steady year-over-year, according to the Brick Meets Click/Mercatus Grocery Shopper Survey fielded July 30-31, 2024.
Delivery’s dramatic gains in July benefited from ongoing efforts by key players to grow their delivery businesses over the last several months. Walmart promoted a 50% discount on its Walmart+ membership in mid-July that lowered the annual fee from $98 to $49 after offering the same deal in May. Meanwhile, Instacart promoted an 80% discount on its annual membership. Both offers are contributing to growth in Delivery users and order frequency.
“Walmart and Instacart aren’t the only players using deep discounts to boost delivery demand,” said David Bishop, partner at Brick Meets Click. “Amazon, for example, in July offered a 90-day free Prime membership trial instead of the usual 30 days, along with unlimited grocery delivery. Similarly, DoorDash and Uber Eats are maintaining low or no delivery fees to increase their market share.”
Looking at trends in monthly active users (MAUs) by format and receiving method shows how the market is shifting. Both Supermarkets and Mass saw year-over-year increases in their MAU bases in July. Supermarket’s base grew twice as fast as last year, up about 7%, and Mass posted a nearly 8% increase.
Trends across the three receiving methods were mixed. Delivery’s MAU base expanded by more than 10% versus last year, Ship-to-Home’s expanded by almost 4%, and Pickup’s contracted slightly, down by less than 2%.
Overall eGrocery order volume for July 2024 rose approximately 5% compared to the prior year. Delivery orders surged nearly 20% in the month, due to both more users and more frequent ordering by those users. Meanwhile, Pickup order volume fell 3% versus July 2023 due to lower order frequency among a contracting MAU base. Growth in Ship-to-Home’s user base offset a dip in order frequency, resulting in a 2% gain in order volume during the month.
Composite spending per order across all three methods (Delivery, Pickup and Ship-to-Home) increased almost 4% in July 2024 compared to a year ago. Average order values (AOV) for Ship-to-Home climbed the most, growing 4% year-over-year, while Pickup and Delivery trailed, increasing by 3% and 2% respectively. AOV for the Mass format finished up over 3% while Supermarkets were flat versus year ago.
Analysis of the monthly results also found that households with annual incomes under $50K reported declines across the three key metrics – MAU base, order frequency, and AOV – bucking the broader eGrocery growth trends and illustrating how financial pressures are affecting online buying behaviors.
“Intense competition in grocery delivery promotions is eroding regional grocers’ control over customer interactions. While third-party marketplaces may boost short-term order volume gains, they also make it harder for grocery retailers to achieve the economies of scale needed to reduce operating costs,” said Mark Fairhurst, Chief Growth Officer at Mercatus. “I’m not sure many grocers would jump at the opportunity to put a farmer’s market in their store parking lot, yet many are willing to do something similar when it comes to relying on marketplaces for their online business.”
Cross-shopping rates for July 2024 remain elevated as nearly one in three customers continued to buy online from both Grocery and Mass formats during the past month. The share of Grocery customers (which includes both Supermarkets and Hard Discounters) that also received an online grocery order from a Mass retailer finished at 32.1% in July.
The share of Grocery customers who received online orders from Walmart reached nearly 22.5%, up 430 bps versus last year, the highest level seen so far in 2024. For Target, the share climbed 100 bps, reaching 14.9%, which is the highest level reached for that retailer during the last two years.
For more information about July 2024 results, check out the latest Brick Meets Click eGrocery Dashboard or visit the eGrocery Monthly Sales report page for information about subscribing to the full monthly report.
About this consumer research
The Brick Meets Click/Mercatus Grocery Shopping Survey is an ongoing independent research initiative created and conducted by the team at Brick Meets Click and sponsored by Mercatus.
Brick Meets Click conducted the most recent survey on July 30-31, 2024, with 1,760 adults, 18 years and older, who participated in the household’s grocery shopping, and a similar survey in July 2023 (n=1,795). Results are adjusted based on internet usage among U.S. adults to account for the non-response bias associated with online surveys. Responses are geographically representative of the U.S. and weighted by age to reflect the national population of adults, 18 years and older, according to the U.S. Census Bureau.
The three receiving methods for online grocery orders are defined as follows:
- Delivery includes orders received from a first- or third-party provider like Instacart, Shipt or the retailer’s own employees.
- Pickup includes orders that are received by customers either inside or outside a store or at a designated location/locker.
- Ship-to-Home includes orders that are received via common or contract carriers like FedEx, UPS, USPS, etc.
About Brick Meets Click
Brick Meets Click is an analytics and strategic insight firm that connects today’s grocery business with tomorrow’s needs. Our clear thinking and practical solutions help clients make their strategies and customer offers more compelling and relevant in the changing U.S. grocery market. We bring deep industry expertise and fact-based analysis to the challenge of finding new routes to success.
About Mercatus
Mercatus drives digital transformation for retailers through an extensive suite of connected and contextualized commerce solutions. We enhance shopper engagement, tailor experiences to individual preferences, and cultivate enduring loyalty across retail businesses of every size. Our mission is to enable retailers to captivate customers, boost sales, foster retention, and deepen loyalty in a digital world. With our cutting-edge solutions, retailers can streamline operations, enrich customer experiences, and realize substantial growth. Embark on the digital transformation journey and unleash the full potential of your retail business with Mercatus.
Media Inquiries
David Bishop, Partner, Brick Meets Click
847-722-2732, david.bishop@brickmeetsclick.com
www.brickmeetsclick.com
