Dive Brief:
- U.S. grocers saw more than 80 million households order groceries online in February, a record high driven by aggressive promotions and membership strategies, according to survey data released Tuesday by Brick Meets Click and Mercatus.
- Online grocery sales for the month totaled $10.3 billion, a 31% increase over the same period in 2024, the research showed.
- The current promotional environment has spurred many consumers to use delivery services like Amazon and Instacart. That channel’s sales rose more than 45% in February to $4.5 billion.
Dive Insight:
As major retailers like Amazon and Walmart have put more promotional muscle behind their online grocery memberships and third-party players Instacart, Uber and DoorDash continue to duke it out for supremacy, delivery sales have risen sharply over the past several months.
The recent rise is all the more striking given lingering consumer price sensitivity. Still, retailers have positioned their memberships as good values for shoppers. Amazon, which launched its $100-per-year grocery subscription service last August, offers no-fee delivery on orders over $35 across its grocery properties, including Whole Foods Market, Amazon Fresh and retailers that provide delivery through Amazon.
Pickup, meanwhile, continues to grow but at a slower clip. Sales in the channel rose 19% in February compared to the same period last year, to $4.1 billion, driven mainly by higher average order values. Traditionally seen as a cheaper alternative to delivery, pickup service appears to have taken a backseat recently amid the flurry of e-grocery promotions and membership pushes. The channel’s share of online grocery sales dropped 4% compared to last year, Brick Meets Click’s survey showed.
Ship-to-home sales increased 29% year-over-year in February, driven — like delivery — by a rise in monthly active users.
E-grocery’s continued momentum will hinge on retailers’ ability to provide good service through their digital channels. And on that front, grocers have reason for optimism. Brick Meets Click’s February data showed that grocers — including supermarkets and discounters — have narrowed the gap with mass retailers regarding customers’ likelihood to order from the same service again.
“Regional grocers are converting first-time shoppers into more loyal customers as evidenced by the rising repeat intent rates, but so is Walmart,” Mark Fairhurst, chief growth marketing officer at Mercatus, said in a statement. “While deep discounts have driven a lot of trial, making a good first impression is essential to longer-term success. That means providing a more seamless shopping experience by pairing relevant personalized offers, order fulfillment, and sought-after loyalty rewards to encourage customers to shop online again.”
The findings are based on a survey of 1,698 people Brick Meets Click conducted Feb. 28-29
