Barrington, Ill. – November 13, 2024 – The U.S. online grocery market ended October 2024 with $10.5 billion in monthly sales, an impressive 27.9% increase over last year as all three receiving methods posted solid year-over-year (YOY) sales growth according to the Brick Meets Click/Mercatus Grocery Shopper Survey fielded October 30-31, 2024.
October’s total monthly sales set a record high and marked the second straight month in which YOY eGrocery sales gains exceeded 20% as the impact of ongoing deep-discounted offers, predominantly for Delivery, affect key metrics such as monthly active users (MAUs) and order frequency.
Delivery experienced another turbo-charged month with YOY sales climbing 46% to $4.8 billion, a record-setting high for the segment. The MAU base for Delivery expanded much faster than for either Pickup or Ship-to-Home, growing 16% versus 2023 with most of the gains coming from households between the ages of 30 and 60.
Combined with increased order frequency, this user base growth drove Delivery’s order volume up 24% versus October 2023 and widened Delivery’s order share lead over Pickup for the second consecutive year in Large Metro areas, which represent roughly 60% of U.S. households.
In addition, Delivery’s average order value (AOV) climbed by over 15%, partly due to a growing share of customers who use the services more frequently and tend to spend more as their usage increases.
Pickup also had a strong month, finishing October 2024 at $4.2 billion, up nearly 20% versus last year, even without the same level of promotional support. The number of Pickup orders completed during October climbed 6% with most of the volume growth being driven by higher order frequency as opposed to household penetration.
Pickup’s MAU base expanded by less than 1% as a contraction in the 45-60 age group compared to last year offset growth in other age groups. Pickup’s AOV increased by almost 13%, propelled by strong gains generated by Mass and favorable shifts in order frequency similar to Delivery.
Ship-to-Home sales totaled $1.5 billion for October, up 6% versus 2023, with YOY gains aided by a larger customer base and higher AOVs. The Ship-to-Home MAU base grew just under 3% during the month driven by strong demand growth in the youngest (18-29 years old) and oldest (60+ years old) households while its reach into the two middle age groups fell versus last year.
Order volume declined 5% as MAUs completed fewer orders during October versus last year. Ship-to-Home’s AOV was up almost 12% aided by strong results from Amazon’s pure-play segments, the largest sales contributor of the method, which posted a nearly 16% increase versus 2023.
The overall MAU base for eGrocery grew by 1.6% year over year as 54% of U.S. households completed at least one online grocery order during the month via Delivery, Pickup, or Ship-to-Home. At the same time, the total pool of households that has ever shopped online for groceries expanded by just 0.6% in October, representing nearly 79% of U.S. households. The gap in expansion rates reveals that most of the MAU growth in October was the result of reactivating light or lapsed users.
“Delivery is riding its next growth curve, fueled not simply by subscriptions or membership offers, but by promotional pitches that incent the customer to commit for a year,” said David Bishop, partner at Brick Meets Click. “While firms occasionally revert to their standard ‘free trial’ offers, the surge of new discount tactics seem to have a broader appeal that extends beyond the existing customers of the retailer or provider offering it.”
Since May 2024, several retailers and third-party providers have stoked the market by periodically offering deep discounts for their annual subscriptions or membership plans in lieu of standard free trial offers. These discounts ranged from 20% at Kroger, to 50% at Walmart, to 80% off an annual plan from Instacart, and there were more firms offering similar deals.
Some traditional retailers have also experimented with promoting limited time offers that waive the delivery fee on large orders that exceed a specified purchase threshold, such as $100. Other providers newer to grocery delivery, like DoorDash and Uber, have introduced 30-day or 4-week free membership trials respectively to drive demand, and Amazon extended its free trial from 30 to 90 days around the most recent Prime Day period.
The growth in Delivery connected with subscriptions and memberships may create headwinds for retailers without a competitive offer due to the increase in cross-shopping behaviors. The share of households that ordered online from a Grocery format in October and that also received an eGrocery order from Mass during the month rose over five percentage points versus last year to 40% in 2024.
Additional headwinds for Grocery, which includes Supermarket and Hard Discount, flow from a growing gap in the repeat intent rate with Mass which has doubled compared to a year ago. In October, the repeat intent score gap between Grocery and Mass was nearly 20 points higher for both Pickup and Delivery services versus last year. The gap for Delivery services has held steady, but the gap for Pickup services has grown significantly as the Mass lead was only in the mid-single digits last year.
“As national giants like Walmart accelerate growth with aggressive membership offers, there are effective ways for regional grocers to adapt and better connect with their core customers,” said Mark Fairhurst, Chief Growth Officer at Mercatus. “By improving loyalty programs and enhancing the relevance of digital initiatives to leverage targeted and personalized campaigns that integrate online and offline promotions, regional grocers can seize new opportunities to strengthen their position in a competitive market.”
For more information about October 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 October 30-31, 2024, with 1,847 adults, 18 years and older, who participated in the household’s grocery shopping, and a similar survey in October 2023 (n=1,790). 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.
For Immediate Release
Media Inquiries
David Bishop, Partner, Brick Meets Click
847-722-2732, david.bishop@brickmeetsclick.com
www.brickmeetsclick.com
Barrington, Ill. – November 13, 2024 – The U.S. online grocery market ended October 2024 with $10.5 billion in monthly sales, an impressive 27.9% increase over last year as all three receiving methods posted solid year-over-year (YOY) sales growth according to the Brick Meets Click/Mercatus Grocery Shopper Survey fielded October 30-31, 2024.
October’s total monthly sales set a record high and marked the second straight month in which YOY eGrocery sales gains exceeded 20% as the impact of ongoing deep-discounted offers, predominantly for Delivery, affect key metrics such as monthly active users (MAUs) and order frequency.
Delivery experienced another turbo-charged month with YOY sales climbing 46% to $4.8 billion, a record-setting high for the segment. The MAU base for Delivery expanded much faster than for either Pickup or Ship-to-Home, growing 16% versus 2023 with most of the gains coming from households between the ages of 30 and 60.
Combined with increased order frequency, this user base growth drove Delivery’s order volume up 24% versus October 2023 and widened Delivery’s order share lead over Pickup for the second consecutive year in Large Metro areas, which represent roughly 60% of U.S. households.
In addition, Delivery’s average order value (AOV) climbed by over 15%, partly due to a growing share of customers who use the services more frequently and tend to spend more as their usage increases.
Pickup also had a strong month, finishing October 2024 at $4.2 billion, up nearly 20% versus last year, even without the same level of promotional support. The number of Pickup orders completed during October climbed 6% with most of the volume growth being driven by higher order frequency as opposed to household penetration.
Pickup’s MAU base expanded by less than 1% as a contraction in the 45-60 age group compared to last year offset growth in other age groups. Pickup’s AOV increased by almost 13%, propelled by strong gains generated by Mass and favorable shifts in order frequency similar to Delivery.
Ship-to-Home sales totaled $1.5 billion for October, up 6% versus 2023, with YOY gains aided by a larger customer base and higher AOVs. The Ship-to-Home MAU base grew just under 3% during the month driven by strong demand growth in the youngest (18-29 years old) and oldest (60+ years old) households while its reach into the two middle age groups fell versus last year.
Order volume declined 5% as MAUs completed fewer orders during October versus last year. Ship-to-Home’s AOV was up almost 12% aided by strong results from Amazon’s pure-play segments, the largest sales contributor of the method, which posted a nearly 16% increase versus 2023.
The overall MAU base for eGrocery grew by 1.6% year over year as 54% of U.S. households completed at least one online grocery order during the month via Delivery, Pickup, or Ship-to-Home. At the same time, the total pool of households that has ever shopped online for groceries expanded by just 0.6% in October, representing nearly 79% of U.S. households. The gap in expansion rates reveals that most of the MAU growth in October was the result of reactivating light or lapsed users.
“Delivery is riding its next growth curve, fueled not simply by subscriptions or membership offers, but by promotional pitches that incent the customer to commit for a year,” said David Bishop, partner at Brick Meets Click. “While firms occasionally revert to their standard ‘free trial’ offers, the surge of new discount tactics seem to have a broader appeal that extends beyond the existing customers of the retailer or provider offering it.”
Since May 2024, several retailers and third-party providers have stoked the market by periodically offering deep discounts for their annual subscriptions or membership plans in lieu of standard free trial offers. These discounts ranged from 20% at Kroger, to 50% at Walmart, to 80% off an annual plan from Instacart, and there were more firms offering similar deals.
Some traditional retailers have also experimented with promoting limited time offers that waive the delivery fee on large orders that exceed a specified purchase threshold, such as $100. Other providers newer to grocery delivery, like DoorDash and Uber, have introduced 30-day or 4-week free membership trials respectively to drive demand, and Amazon extended its free trial from 30 to 90 days around the most recent Prime Day period.
The growth in Delivery connected with subscriptions and memberships may create headwinds for retailers without a competitive offer due to the increase in cross-shopping behaviors. The share of households that ordered online from a Grocery format in October and that also received an eGrocery order from Mass during the month rose over five percentage points versus last year to 40% in 2024.
Additional headwinds for Grocery, which includes Supermarket and Hard Discount, flow from a growing gap in the repeat intent rate with Mass which has doubled compared to a year ago. In October, the repeat intent score gap between Grocery and Mass was nearly 20 points higher for both Pickup and Delivery services versus last year. The gap for Delivery services has held steady, but the gap for Pickup services has grown significantly as the Mass lead was only in the mid-single digits last year.
“As national giants like Walmart accelerate growth with aggressive membership offers, there are effective ways for regional grocers to adapt and better connect with their core customers,” said Mark Fairhurst, Chief Growth Officer at Mercatus. “By improving loyalty programs and enhancing the relevance of digital initiatives to leverage targeted and personalized campaigns that integrate online and offline promotions, regional grocers can seize new opportunities to strengthen their position in a competitive market.”
For more information about October 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 October 30-31, 2024, with 1,847 adults, 18 years and older, who participated in the household’s grocery shopping, and a similar survey in October 2023 (n=1,790). 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.
For Immediate Release
Media Inquiries
David Bishop, Partner, Brick Meets Click
847-722-2732, david.bishop@brickmeetsclick.com
www.brickmeetsclick.com
