Dive Brief:

• U.S. online grocery sales were off by 3% overall during September on a year-over-year basis, to $7.8 billion, with pickup losing momentum as delivery sales grew, according to figures released Tuesday by Brick Meets Click and Mercatus.
• Grocery e-commerce notched a nearly 4% across-the-board gain during the third quarter compared with the same time frame in 2021, as sales for the three-month period hit $24.1 billion.
• Mass merchants gained ground over traditional food retailers in September in terms of their ability to win repeat online business from shoppers — an imbalance that has widened considerably over the past year.

Dive Insight:

Pickup continues to represent the largest proportion of grocery e-commerce sales in the U.S., but the research underscores the increasing interest among shoppers in having orders brought to their doorsteps.

Pickup accounted for 44% of the online grocery sales during the third quarter, a year-over-year decline of 1.2 percentage points, according to Brick Meets Click and Mercatus. Delivery sales were up by more than 5 percentage points by the same measure, pushing that channel’s share of the market to nearly 39% in Q3. 

Looked at another way, delivery sales rose 20% during Q3 year over year, a performance that stands in stark contrast to the meager 1% sales gain the pickup segment recorded. In addition, the number of monthly active users for delivery rose 6% during the quarter, while the comparable figure for pickup shrank 2%.

The diverging trends can be attributed to the fact that shoppers have a growing number of ways to place grocery delivery orders, Brick Meets Click Partner David Bishop said in a statement, noting that grocers with a national presence have been investing in their own delivery services.

Third-party services like Uber and DoorDash have also expanded their delivery partnerships with grocers during the past year as they look to compete with Instacart, and supermarket chains have encouraged shoppers to join membership services designed to encourage them to place delivery orders.

The data indicate that customer interest in online grocery services slowed as the third quarter unfolded. Order frequency across both the delivery and pickup channels was down in August and September. Delivery recorded its slowest annual sales gain during the final month of the quarter, while pickup sales were down 6% during September even as they rose 1% in the third quarter.

Ship-to-home sales, which represent deliveries handled by carriers like UPS and FedEx, continued to sag during Q3, finishing the quarter with a 17% share of the online grocery market, a decline of 4.3 percentage points compared to a year ago.

The downward trend in online grocery activity that marked the later weeks of the quarter suggests that inflation is causing shoppers to think twice about paying a premium to avoid walking supermarket aisles, said Marc Wulfraat, founder and president of MWPVL International, a supply chain consultancy based in Montreal that helps retailers devise strategies for managing e-commerce orders.

“A lot of consumers are waking up to the fact that they're paying more for food when it gets delivered to their home,” said Wulfraat. “As people try to stretch their dollar, how many more are going to go back to just buying in the store instead of ordering online?”