Dive Brief:
- Grocery e-commerce sales reached a record $10.5 billion in October, up approximately 28% compared with the same month last year, Brick Meets Click and Mercatus reported Wednesday.
- Delivery accounted for nearly 46% of online grocery sales last month, while pickup orders comprised 40%. The ship-to-home channel recorded a share of about 14%.
- The online grocery sector has surged in recent months as retailers use promotions to entice customers to sign up for e-commerce subscription programs.
Dive Insight:
The exceptionally strong performance that defined grocery e-commerce in October underscores the powerful role discounts play in driving shopper interest in buying food and other goods online.
Delivery sales moved ahead by about 46% last month, to $4.8 billion, a record level. Fast growth in the number of shoppers who placed delivery orders as well as an increase in order frequency drove the channel’s expansion.
Delivery order volume galloped ahead by a quarter compared with October 2023, extending the channel’s lead over pickup in larger metropolitan areas for the second year in a row, Brick Meets Click reported. In addition, the value of the average delivery order moved ahead more than 15% last month.
The delivery channel’s strength reflects steps retailers have taken to encourage shoppers to sign up for programs that incentivize them to turn to online services when they need groceries, Brick Meets Click indicated.
“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,” David Bishop, partner at Brick Meets Click, said in a statement. “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.”
Pickup sales rose by about a fifth last month to hit the $4.2 billion mark as the number of orders rose 6%. The size of the channel’s user base barely budged during the month, but the size of the average pickup order rose 13%, a dynamic fueled by strong gains among mass retailers and increased order frequency.
In a sign that grocery e-commerce might be reaching the limits of its appeal among U.S. shoppers, the pool of households that have ever placed an online grocery order moved ahead by less than 1 percentage point last month, to just under 80% of households.
Mass retailers continued to make gains online last month at the expense of traditional supermarket operators, with the proportion of households that placed online grocery orders from both of those sectors hitting 40%. In addition, more households indicated they plan to direct repeated e-commerce orders to mass retailers than to supermarkets.
The data stem from a survey of 1,847 shoppers Brick Meets Click conducted on Oct. 30 and Oct. 31.
