Walmart’s share of online grocery tops 35%

Walmart continues to grow its share of grocery business and much of that is due to its online business, according to the latest Brick Meet Clicks report sponsored by Mercatus.

The online grocery survey conducted in the second quarter of this year indicated Walmart grew its online grocery sales by more than 5% from a year ago to nearly 36%. Mercatus reports supermarkets held a 1.5% lead over Walmart in the second quarter of 2022 for online grocery, but the retail giant jumped ahead by 5.7% in the same quarter of 2023.

“The combined effect of price inflation and the expiration of COVID financial supports has triggered a flight-to-value as purchasing power remains under pressure,” said David Bishop, partner at Brick Meets Click. “This means it’s vital for grocers to offer customers more ways to save money while also providing the experience that online shoppers expect, as cost considerations will weigh more heavily than convenience for cash-strapped households in the second half of this year.”

Walmart executives have said customers are seeking value and are finding it with hundreds of price rollbacks in the consumables categories. A separate report from Brick Meets Clicks found the purchasing power of U.S. households dropped more than 7% year over year in the first half of 2023 due to higher prices.

Mercatus said Walmart is gaining market share at a time when the market overall is contracting as total U.S. online sales were down 1.1% in the second quarter of 2023 compared to the prior-year period. Brick Meets Click analysis found the main driver of the sales decline was fewer orders completed per household, down 5% year-over-year for the quarter.

However, Walmart recently reported second-quarter store traffic was up 2.9% and the average ticket increased 3.4%, well ahead of expectations. Walmart U.S. reported comp-store sales growth of 6.4%, better than the 4.1% consensus. The retailer said food sales were higher behind more cautious shopping. Online sales added 1% to the overall comp as Walmart for the second quarter. Walmart’s e-commerce sales rose 24% with strength in food sales and marketplace, according to Walmart CEO Doug McMillon.