Online grocery sales rise 8.4% in June from year ago

U.S. consumers spent $7.7 billion in June for online grocery orders, up 2.9% from May and 8.4% higher than a year ago, according to Bricks Meets Clicks/Mercatus shopper survey. Online grocery orders grew by $600 million from a year ago.

Delivery sales again surged amid aggressive promotions from retailers. Ship-to-home orders also posted strong results due to higher spending per order and pickup held steady year-over-year, Mercatus reports.

“Delivery’s strong performance in June likely benefited from the promotional offers made last month, first by Instacart and then by Walmart,” said David Bishop, partner at Brick Meets Click. “These promotions focused on delivery and offered deep discounts on each service’s annual membership fees, which helped boost both monthly active users and order frequency for delivery and for Walmart.”

Delivery sales jumped to $2.9 billion in June, up 16% compared to a year ago. The year-over-year gain was driven by surges in the monthly active user base and higher order activity although the average order value fell somewhat. Delivery captured 37.6% of the online grocery sales in June.

Online grocery pickup held steady at $3.5 billion in sales for June. The monthly average user base expanded around 5% from a year ago. Also, the average order value increased slightly, likely because of higher retail prices. While more shoppers are spending a bit more per order, Mercatus said they are shopping less frequently and offsetting the other gains in the segment. Online pickup grocery lost 3.52% of its total share in June, but at 45% it remains the share leader for online grocery.

The e-grocery sales shipped in June to homes climbed to $1.3 billion, up almost 10% compared to a year ago. This delivery method has grown its share for the past four consecutive months. Mercatus said the home delivery mode had higher average order values despite a 1% decline in the average monthly user base and a dip in order frequency compared to a year ago. The ship-to-home segment finished June with nearly 17% of the online grocery market sales, up 0.26% from a year ago.

Food and consumables continue to take up a larger share of household budgets. For a household with an income of $94,003, about 10% is spent on groceries, according to a June report from Bankrate.com. Food is the fastest-growing monthly expenditure for families up 12.7% over the past two years, the report notes.

Mercatus reports the monthly average user base expanded by nearly 4% in June compared to the year-ago period. In contrast, the total pool of households that have ever bought groceries online grew just 0.14% over the same period. The gap between these two measures highlights the fact that the recent increase is largely due to less-frequent users making another order or lapsed customers who are giving the service another chance.

Walmart Chief Financial Officer John David Rainey said in June that delivery orders were growing faster than pickup and membership sales were also growing at a double-digit pace. He said as Walmart+ membership grows so does the number of express orders which come at an additional cost for the added convenience.

Mercatus said Walmart had about 22% of the online grocery market share in June, up 1.5% year over year. There are also more consumers shopping multiple retailers for online groceries as one in three said they shop at supermarkets, deep discounters like Aldi and mass retailers like Walmart for online grocery.