E-commerce grocery sales declined slightly in May

Brief description of the dive:

• Sale of groceries online in May it was $6.8 billionwhich represents a decline of just under 1% compared to the same period last year, according to data released Tuesday by Brick Meets Click and Mercatus.

• Pickup orders accounted for nearly half of U.S. digital grocery sales, delivery accounted for about a third of the market, and the ship-to-home channel had a share of about 19%.

• Mass retailers expanded their online customer base again last month as traditional grocers lost digital customers, underscoring the challenges supermarket operators face in the e-commerce sphere.

Diving Insights:

Online grocery sales fell in May even as more consumers used e-commerce services, in part because order rates slowed across all three fulfillment channels, Brick Meets Click found.

This trend has hit the pickup truck particularly hard. While curbside pickup remained the most popular choice among online grocery shoppers, sales dropped nearly 4% as the fulfillment method saw a 6% decline in order frequency with a slight decline in average order value.

Mail order sales remained virtually unchanged last month, but the channel managed to gain market share as its monthly active user base grew by more than 10% year-on-year.

Brick Meets Click attributed the delivery sector’s gains in part to discounts offered by Instacart and Walmart on the cost of annual memberships. These price cuts “show how players like Instacart and Walmart are trying to keep active customers engaged by getting them to commit for 12 months, not just one,” Brick Meets Click partner David Bishop said in a statement.

In May, the ship-to-home channel continued to record growth. Sales growth in this channel, which includes orders delivered to customers by carriers such as UPS and FedEx, increased by approximately 9% as both the average order value and the number of monthly active users increased sharply.

According to Brick Meets Click, the number of households that have ever placed an online grocery order barely budged in May compared to the same month in 2023, suggesting that the increase in monthly active users is primarily due to people returning to the market .

Traditional supermarkets remain the main source of groceries for people when online and in-store sales are taken into account, but their share of the grocery market is still lower compared to May 2023, according to Brick Meets Click.

The findings are based on a survey conducted on May 30 and 31 among 1,724 Brick Meets Click customers.

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