Dive Brief:
- U.S. online grocery sales reached $10 billion in July, a 26% increase year over year, primarily due to record-high household penetration, according to Brick Meets Click’s latest report sponsored by Mercatus.
- E-grocery penetration represented around 61% of U.S. households — representing around 81 million people.
- All three receiving methods — delivery, pickup and ship-to-home — saw sales increases in July, with delivery sales driving more than half of e-grocery’s gains.
Dive Insight:
Strong order activity and solid gains in spending rates contributed to “exceptionally strong growth” that led online to capture 17.2% of grocery spending last month. Online’s share of total grocery spending increased more than 300 basis points year over year for July.
Delivery sales grew 36% year over year, finishing the month with $4.3 billion, and the channel was the main driver of the 7% year-over-year increase in online grocery’s overall average order value, according to Brick Meets Click.
“The elimination of explicit fees, like the standard delivery cost, via a membership or subscription program, removes a top barrier to increased usage and customers are taking advantage of it,” David Bishop, partner at Brick Meets Click, said in a statement. “This tactic is unlocking latent demand for Delivery which is typically viewed as the more convenient but also the more expensive option when compared to Pickup.”
Pickup also saw growth, with sales increasing 24% year over year, to $4 billion. Like delivery, this segment reported gains in its average order value.
Both delivery and pickup benefited from repeat customers who completed four-plus orders with the same online service over the past three months. These shoppers spend 50% more per order than first timers, according to Brick Meets Click.
Ship-to-home ended July with $1.6 billion in sales, a 10% year-over-year increase that generated the balance of online sales’ growth this year, Brick Meets Click found.
The average number of online grocery orders completed by monthly active users ticked up 6.5% compared to July 2024, with age cohorts 30 to 44 and 45 to 60 generating gains.
Brick Meets Click noted that mass retailers continue to be a threat to regional grocers. Among monthly active users, mass retailers saw order frequency increase in the mid-single digits while supermarkets saw order rates decline slightly year over year last month.
“In an era where ‘free’ delivery is setting new customer expectations and Walmart’s retail media revenue fuels its competitive edge, regional grocers face mounting pressure to profitably serve shoppers online,” said Mark Fairhurst, chief growth marketing Officer at Mercatus. He added that grocers that hone in on their customer data to create personalized offers can “turn renewed engagement into lasting loyalty.”
