Online grocery sales up 28% in October; grocery delivery sets a record

U.S. consumers spent $10.5 billion for online groceries in October, up 28% from a year ago, according to the Brick Meets Click/Mercatus shopper survey. October’s monthly sales set a record and was the second consecutive month in which annual growth topped 20%, according to the survey.

The report is not adjusted for inflation which continued to moderate in food-at-home grocery prices, averaging a rise of 0.1% in October, based on the federal Consumer Price Index report released Nov. 13.

Shoppers using grocery delivery with online sales rose 46%, reaching $4.8 billion in October, and a record for the segment. The monthly average user base continues to grow faster than pickup or ship-to-home, rising 16%, with most of the gains coming from households between the ages of 30-60. Mercatus said order frequency also helped to drive order volume up 24% from a year ago.

“Delivery is riding its next growth curve, fueled not simply by subscriptions or membership offers, but by promotional pitches that incent the customer to commit for a year,” said David Bishop, partner at Brick Meets Click. “While firms occasionally revert to their standard ‘free trial’ offers, the surge of new discount tactics seem to have a broader appeal that extends beyond the existing customers of the retailer or provider offering it.”

Since May 2024, some retailers and third-party providers have offered deep discounts for subscriptions or membership plans instead of standard free trial offers. The discounts ranged from 20% at Kroger, 50% at Walmart, and 80% off an annual plan from Instacart. DoorDash and Uber have introduced 30-day or 4-week free membership trials, respectively, to drive demand. Amazon extended its free trial from 30 to 90 days around the most recent Prime Day period.

Bishop said growth in delivery connected with subscriptions and memberships may create hurdles for retailers without a competitive offer due to the increase in cross-shopping behaviors. The share of households that ordered online from a grocery format in October and also received an online grocery order from a mass retailer during the month rose to 40%, up 5% from a year ago.

“As national giants like Walmart accelerate growth with aggressive membership offers, there are effective ways for regional grocers to adapt and better connect with their core customers,” said Mark Fairhurst, chief growth officer at Mercatus. “By improving loyalty programs and enhancing the relevance of digital initiatives to leverage targeted and personalized campaigns that integrate online and offline promotions, regional grocers can seize new opportunities to strengthen their position in a competitive market.”

Online grocery pickup garnered sales of $4.2 billion in October, up nearly 20% versus a year ago. The number of pickup orders completed in October rose 6% with most of the volume coming from higher order frequency as opposed to greater household penetration. Mercatus said monthly average users increased just 1%, while average order volumes climbed 13% with most of the growth occurring at mass retailers in larger metro areas.

Ship-to-home online grocery sales totaled $1.5 billion in October, up 6% from a year ago. The monthly average user base grew 3% during the month with gains in the youngest (ages 18-29) and older (ages 60+) households. Order volume declined 5% as monthly average users completed fewer orders during October versus last year.

The overall monthly average user base for online grocery grew 1.6% year over year as 54% of U.S. households completed at least one online grocery order during October via delivery, pickup, or ship-to-home. At the same time, the number of households that have shopped online for groceries expanded by just 0.6% in October, representing nearly 79% of U.S. households.