Online sales drop $1 billion from April to May 2022, fueling migration to mass purchases

Compared to last year, sales for pickup (includes orders received by customers inside or outside a store or at a designated location/locker) and delivery (includes orders received from a primary or third-party vendor like Instacart, Shipt, or the retailer’s own employees) were up 9% and 5%, respectively, in the month of May.

Pickup, the largest online grocery segment with a 45% share of sales, saw a 10% increase in its monthly active user (MAU) base and a mid-single-digit increase in its average value (AOV), offset by a marginal decrease in order frequency.

Delivery, with a 36% dollar share, saw modest MAU and AOV gains and a ~5% drop in order frequency.

Home delivery, which accounts for 19% of online grocery sales, saw the largest drop in sales of 16% year-over-year, a more than 10% decline in AOV and frequency of orders, and a 10% drop in its base MAU.

“Beneath the early results, it is evident that as price inflation erodes purchasing power, customers are increasingly focused on finding ways not to pay more than necessary when shopping. on line”,​ said Brick Meets Click in its survey.

Cost is at the top of the list of top buying factors

For customers shopping in the Mass and Grocery channels, price has become a primary motivator in grocery shopping. According to the survey, the percentage of shoppers who cited cost as their most important selection criteria increased by 6%, from 37% in August 2020, when customers were first surveyed, to 43% in May 2022. The jump was more pronounced for groceries. customers than in droves with a 10% increase in the number of grocery chain shoppers citing cost as their number one consideration when shopping.

“Interestingly, for grocery shoppers, the importance of ‘getting the products you want’ has fallen from the highest consideration to the lowest when ranked against the elements of cost and convenience, and that’s true for pickup and delivery services,” David said. Bishop, partner of Brick Meets Click, who speculated that the importance of cost could drive more shoppers to pick-up services.

“Less than a quarter of online grocery customers who shop with Grocery or Mass online use both pickup and delivery services, so rising costs among this group may actually drive greater demand for collection”, he said.

“Customers appreciate the convenience of ordering online, but they are also increasingly cost-conscious,”​ commented Sylvain Perrier, President and CEO of Mercatus.

“So to defend the core business, grocers can promote pick-up to address both issues. Assuming the pickup experience matches customer expectations, highlighting the savings associated with lower pickup fees, no fuel surcharge, or no tipping can better protect your customers and sales by line by promoting a more affordable alternative to home delivery.

Migration to mass channel

Although the mass channel is not immune to the effects of inflation, the channel saw a 20% increase in its MAU base last month compared to the same period last year. By comparison, grocery is down more than 10% in its MAU base from a year ago.

A similar trend occurred with order frequency. Online customers shopping in the mass channel averaged almost 2% more orders in May compared to a year earlier, while the online grocery channel saw a 5% decline in order frequency. And while AOVs for groceries and mass increased in the month compared to May 2021, both tracked the general rate of grocery inflation, suggesting fewer items in the basket, according to the survey data.

The share of the grocery MAU base who also shopped online with bulk groceries during the month reached 33%, a new high for cross-channel shopping.

“While this high rate may be temporary, grocers risk losing customers to Mass,”said Brick Meets Click.


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David A. Albanese