Report: Online grocery sales eclipsed $7B in June

Dive Brief:

U.S. online grocery sales reached $7.2 billion in June, up 9% from May, according to a survey from Brick Meets Click and Mercatus. About 45.6 million households reported buying groceries online during the month.
About 32% of all households said they are extremely or very likely to use an online grocery service for pickup or delivery in the next 90 days, up slightly from 30% in May. Fifty-seven percent of shoppers said they would use a specific service again within the next 30 days, similar to the survey’s May findings.
Order frequency among active households also increased, growing from 1.7 to 1.9, the survey found. This illustrates the growing importance of online grocery in more homes amid COVID-19.

Dive Insight:

After tracking consecutive months of growth in online grocery, Brick Meets Click and Mercatus’ findings in June point to notable two developments as U.S. consumers continue to grapple with the pandemic.

First, following efforts to reopen in May and early June, cases of COVID-19 have spiked once again, pushing many people back into the safety of their homes. The survey found about 44% of households reported high levels of concern about contracting COVID-19, and according to the New York Times, states including Arizona, Texas and Florida reported their highest case numbers in mid-June. Last week, the Washington Post said the U.S. saw a record number of cases in one day at over 55,000.

In addition, many grocers have found ways to streamline the online grocery process with more time slots and ordering options and fewer limits on product availability. Brick Meets Click and Mercatus said many retailers have added capacity, including independents that have launched services and larger chains that have staffed up and added additional features.

Retail giants as well as regional and independent grocers have been looking for solutions to meet ongoing demand for pickup and delivery. Target is rolling out fresh grocery pickup nationwide, with plans to have it available at 1,500 stores by the holiday season. The service will be free of charge.

Raley’s recently opened a dark store for online fulfillment, while Stop & Shop said it would open three new warerooms and add more pickup locations in 2020. Instacart added new features like “order ahead” to help shoppers plan, and Walmart has hired thousands to speed up pickup and delivery times.

David Bishop, partner with Brick Meets Click, noted the agility retailers have shown since the health crisis started, and said the increase in capacity gives shoppers more choice and sets up online grocery for continued growth.

According to the findings, there’s room for grocers to improve when it comes to winning repeat shoppers. While more than half reported they’d use a service again, that is well below the pre-COVID rate of repeat shoppers, which Brick Meets Click noted was 74% last August.

Mercatus president and CEO Sylvain Perrier said in a statement grocers should consider the complete e-commerce journey, from digital advertising to picking and packing, as they adapt their offerings to appeal to more shoppers.