Online grocery sales up +6% year-over-year while consumer price sensitivity and ongoing COVID concerns set in
Consumers are still using pickup (includes orders that are received by customers either inside or outside a store or at a designated location/locker) as their primary method of online grocery shopping, with sales for the segment increasing 3% in June '22 vs. one year ago.
Pickup, which represents the largest segment of the total online grocery market, contributed 45.7% of total online grocery sales in Q2 2022, up 80 basis points vs. Q2 2021, according to the survey.
Delivery (e.g. Instacart, Shipt), the second largest segment, saw the biggest jump in monthly sales up 20% in June 2022 vs. May 2022 and up 6% vs. one year ago, which Brick Meets Click/Mercatus attributes to a new range of service options and features that have grown the segment's total addressable market and increased its monthly active user base. Delivery captured 34.2% of the online grocery market dollar share for Q2 2022, up 1.7% points from Q2 2021.
The likelihood of an online grocery shopper using the same service again within the next month remained steady at 63% last month, and repeat purchase intent rate climbed 7% vs. the same period a year ago.
Lastly, ship-to-home (includes orders that are received via common or contract carriers like FedEx, UPS, USPS, etc.) continued its long-term decline, which began at the onset of the pandemic when shoppers gravitated towards other modes of online grocery shopping. Ship-to-home sales declined 14% in June 2022 vs. the same period last year and by more than 10% in Q2 2022 vs. Q1 2021, pushing its dollar share of the online grocery down -2.6% to 20.6%.
In terms of share of wallet, groceries purchased via online channels accounted for 13.6% of total grocery purchases last month, up 1.5% vs. June 2021.
'Inflation and COVID are creating cross-currents in the market'
Despite positive gains to the two largest segments of the online grocery, consumer price sensitivity is at an all-time high and fears of contracting new variants of the coronavirus are creeping in impacting in-store shopping, noted David Bishop, partner at Brick Meets Click.
“Inflation and COVID are creating cross-currents in the market as higher prices motivate customers to look for ways to avoid paying more than necessary, and ongoing concerns about contracting the virus motivate shoppers to use online grocery as a way to stay healthy,” said Bishop.
“This is especially true as new variants of the virus triggered surges in infection and rising illness rates during May and June.”
To respond to these increasing consumer concerns, Sylvain Perrier, president of Mercatus, suggests providing shoppers with convenient and money-saving options when shopping for groceries online.
“Customers crave convenience, but they also want to find ways to save money. Encouraging customers to use lower priced pickup services is one opportunity. Elevating and showcasing private label products online is another. Also consider integrating digital coupons into your first-party web and mobile experiences," said Perrier.
