Grocers of all sizes are expanding their online offerings by launching new websites and apps, ramping up digital retail media and creating streamlined shopping experiences.

But a report released this week highlighted how large grocers are enjoying the greatest benefits of all this innovation — and by a long shot.

According to Incisiv and Wynshop’s newly released 2023 State of Digital Grocery Performance Card for Q1, customers spend $149.10 on average per digital order at national grocers, which are defined in the report as companies with more than $10 billion in sales. At regional (between $5 billion and $10 billion in sales) and small grocery stores (less than $1 billion in sales), by comparison, shoppers spend $75.20 and $34.90 per digital order, respectively. 

Small players appear to be losing online market share, as well. According to the report, large grocers accounted for 15% of all online grocery orders in Q1, while small grocers accounted for just 0.8% of digital sales, down from 1.4% during the same period last year.

The performance report is based on more than 1.7 million customer orders and surveys of 27,000 grocery shoppers as well as over 2,600 grocery industry executives.

As if on cue, this week Walmart rolled out improvements to both its website and app in an effort to make both a more enjoyable and easier platform to navigate. Kroger, meanwhile, continues to expand its proprietary delivery service to new markets like Austin, Texas. 

"To protect their market share, local and regional grocers need to increase their online functionality to promote private brands, to offer SNAP benefits, and to provide efficient order fulfillment by both pickup and delivery methods," Charlie Kaplan, chief revenue officer of Wynshop, said in a statement. 

Digital grocery sales made up 13.9% of overall grocery sales in Q1 2023, down from 14.8% during the same time a year ago, the report noted. And while digital basket sizes saw a 13% increase from January to March of this year, the number of products per basket remained flat, per the report.  

In case you missed it

New Seasons Market’s regenerative agriculture project

The West Coast grocery chain is working with Tillamook, an Oregon-based dairy farmers co-op, on a project which that aims to reduce carbon and protect on-farm ecosystems in Tillamook County, along with helping both the retailer and co-op work on their climate goals.

As part of the effort, both the grocer and Tillamook are providing $15,000 to plant approximately five acres of native vegetation on regional dairy farms within the co-op, Tillamook said. The planting is expected to take place this coming winter. 

New Seasons and Tillamook are trying to get a USDA Conservation Innovation Grant for the project and are awaiting word on their grant application. 

Nonprofit’s $50 million development addresses food insecurity

In Dayton, Ohio, local organization Homefull, which provides housing location and financial assistance to people experiencing housing instability, is working to transform a 16-acre site into a mixed-use space, the Dayton Daily News reported. As part of that project, a grocery store is slated to arrive to address a local food desert, the paper noted.

The food market will occupy one-fourth of a 48,000-square-foot building that will also house a pharmacy, a primary care practice and Homefull’s administrative offices and community-based services, per the paper. The project also includes housing units. The development’s groundbreaking was at the end of March, and construction is expected to take roughly 18 months. 

Walmart leans into pickleball's popularity

The retailer is offering 125,000 comped reservations at pickleball venues across the U.S. for its customers and employees, sister site Marketing Dive reported. Walmart has teamed up with racket sports booking platform Break the Love to offer the pickleball reservations.

While the companies said in the announcement that pickleball can have a “country club barrier,” they are aiming to make the sport more accessible for both shoppers and store associates by providing free court bookings and additional content and merchandise. The retailer is also tapping into monetization opportunities with its curated shopping experience for pickleball merchandise, PYMNTS.com noted. 

Pickleball — often described as a combination of tennis, badminton and Ping-Pong — has exploded in popularity in the U.S. recently. From August 2021 to August 2022, more than 36.5 million people played pickleball, per data from the Association of Pickleball Professionals provided to CNBC — up from 5 million players recorded in 2021.

Number of the week: $7.50

That’s the amount Kroger is saying it can cost per person for a 10-person Easter menu from the grocer. For people dyeing for some sweets, that cost includes candy, such as Reese's Eggs and Brach's Jellybeans. The suggested menu Kroger shared includes items like a spiral ham, macaroni and cheese, Caesar salad, potato salad, peach pie — all from the grocer’s private label portfolio.

Kroger is among several retailers chirping about the cost-savings for consumers with their Easter offerings as food inflation abates but still remains high. Walmart, for example, is offering items at last year’s prices for Easter meal essentials and Easter basket goodies until April 15.

What’s ahead

Albertsons to release Q4 earnings

The national grocery chain will report its financial results for the fourth quarter on Tuesday. However, with the plan to merge with Kroger still undergoing federal review, Albertsons will not be hosting a conference call.

Latest CPI and grocery sales reports due

The U.S. Bureau of Labor Statistics is slated to provide Consumer Price Index data for March on Wednesday. The Advance Monthly Retail Trade report for March will also be released next Friday.