Online grocery sales in the U.S. increased nearly 10% year-over-year in July 2024, according to new data from the monthly Brick Meets Click and Mercatus Grocery Shopping Survey.
Brick Meets Click and Mercatus define the three receiving methods for online grocery sales as follows:
- Delivery: Includes orders placed by a first- or third-party seller such as Instacart, Shipt, or the retailer’s own employees.
- Pick up: Includes orders picked up from customers either inside or outside a store or at a specific location/locker.
- Home delivery: Includes orders placed through common or contract carriers such as FedEx, UPS, USPS, etc.
Pickup, the top-selling segment, remained flat year-over-year, while delivery and home shipping increased. The delivery segment gained the largest share of U.S. online grocery sales in July. Deliveries also nearly matched the share of pickup.
Understanding the growth of online grocery delivery
In July, delivery orders increased by almost 20% year-on-year, which Brick Meets Click and Mercatus attributed to both an increase in users and more frequent ordering by those users.
Brick Meets Click and Mercatus attributed the gains in the delivery segment in part to efforts by major players to expand their delivery businesses in recent months — including Walmart and Instacart. Walmart offered 50% off its Walmart+ membership (down from $98 to $49) in mid-July, after promoting the same deal in May. Instacart offered 80% off its annual membership.
“Walmart and Instacart aren’t the only players using deep discounts to drive delivery demand,” said David Bishop, partner at Brick Meets Click, in a statement. “For example, Amazon offered a 90-day free trial of Prime in July, up from the usual 30 days, along with unlimited grocery delivery. DoorDash and Uber Eats are also keeping low or no delivery fees to increase their market share.”
Amazon is No. 1 and Walmart is No. 2 in the Top 1000, Digital Commerce 360’s ranking of North American online retailers by web sales. Additionally, Amazon is No. 3 and Walmart is No. 9 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top marketplaces by gross merchandise value (GMV).
Online grocery sales in July in the US
Online grocery sales increased to $7.9 billion in July 2024 from $7.2 billion in the same month of 2023.
In addition, online grocery sales were higher in July 2023 and 2024 than in June 2023 and 2024, respectively. It is the third consecutive month that online grocery sales in the United States have increased year-over-year.
According to data from Brick Meets Click and Mercatus, the total volume of online grocery orders increased by about 5% in July 2024. Although self-pickup sales remained flat year-on-year, order volume decreased by 3%.
Average order value increased the most in the ship-to-home segment, growing 4% year-over-year. AOV increased 3% year-over-year in the pickup segment and 2% year-over-year in the delivery segment. By store type, AOV for online grocery sales from mass merchants increased 3%, while it was flat for supermarkets.
The Brick Meets Click and Mercatus analysis also found that households with annual incomes below $50,000 saw declines in three key metrics:
- Average monthly users
- Order frequency
- Average order value
This illustrates the influence of financial pressure on online purchasing behavior, it said.
“Intense competition in grocery delivery promotions is eroding local grocers’ control over customer interactions,” said Mark Fairhurst, chief growth officer at Mercatus, in a statement. “While third-party marketplaces can drive short-term gains in order volume, they also make it harder for grocers to achieve the economies of scale needed to reduce operating costs. I’m not sure many grocers would jump at the opportunity to open a farmers market in their store parking lot, but many are willing to do something similar when it comes to relying on marketplaces for their online business.”
Read last month’s update here.
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