U.S. online grocery sales grew 43% from $6.5 billion in March 2020 to $9.3 billion in March 2021 thanks in large part to consumer shopping changes resulting from the COVID-19 pandemic, according to a report from Brick Meets Click/Mercatus.
Mercatus also found online grocery usage continues to escalate as the most recent survey found 73% of consumers had purchased grocery items online within the past three months, up from 61% from the pre-COVID-19 pandemic. David Bishop, partner at Bricks Meet Click, said the 43% annual spending increase qualifies as a disruptive impact of the pandemic that continues to alter the way people get their groceries.
“A year since COVID-19 changed how we live, work and shop, online grocery demonstrated continued strength and impressive staying power,” Bishop said. “The monthly active user base remains robust, average order values are at similarly elevated levels and order frequency has gone up.”
Mercatus said the delivery/pickup segment captured $7.1 billion sales in March, up from $6.1 billion in February and $4 billion in March 2020. Ship-to-home grocery commerce grew to $2.1 billion in March, up from $1.89 billion the prior month. This segment is lower than the prior-year March sales of $2.5 billion.
Bishop said even the disruptors get disrupted in retail and Amazon and other first movers in direct to consumer online grocery now have much more competition. Bishop said the 43% sales growth from March to March reflects a mix of factors and ways the pandemic has changed the way people engage in online grocery shopping.
Mercatus said monthly active users dropped 7% from 74.5 million in March 2020 to 69.3 million in March 2021. The decrease was driven by fewer households making online grocery purchases that shipped to home via common contract carriers. Bishop said the ship-to-home segment lost 27% of its monthly users on a year-over-year basis. The pickup segment gained 12% and delivery from store gained 23% over the same period.
The survey also found monthly active users placed an average of 2.8 online orders during March, up from 2.5 orders in the year-ago period. The 12% gain in pickup is attributed to the fact many households were still shopping in physical stores until states announced stay-at-home orders last spring.
Mercatus said pickup and delivery from stores have now captured the largest share of orders away from direct ship-to-home from players like Amazon. The survey also found consumers typically either favor pickup or store delivery as just 15% of respondents reported using both services in March. Bishop said this illustrates consumers have strong preferences for the method they use to receive online groceries.
Mercatus said the average online grocery order for pickup and store delivery was unchanged at $84 in March when compared to a year ago. The direct ship-to-home online order average fell 6% from a year ago to $49.
The survey said satisfaction levels rose as in-stock levels improved after the surge in demand last spring as the pandemic spread and more consumers were eating, working and schooling at home. Mercatus said at the start of the pandemic consumer experience ratings plummeted to below 43% as out-of-stocks were a huge problem as was getting pickup and delivery slots scheduled. In the March survey, shopper satisfaction levels rebounded to 62%.
Another recent survey by Power Reviews found that 93% of consumers have made an in-store grocery purchase within the most recent three months. While younger consumers are leading the way when it comes to purchasing groceries online, a majority of all age cohorts are making digital purchases.