Dive Brief:

• Online grocery sales in April declined nearly 4% compared to the same month last year, to $8.1 billion, according to the latest monthly report from Brick Meets Click and Mercatus. 
• That decline was driven by a nearly 6% drop in order volume as well as a slight reduction in active users, the firms reported on Monday. Delivery sales declined close to 6% over last April while pickup sales dropped less than 3%.
• “It’s no surprise that inflation is affecting where and how people shop online for groceries,” said David Bishop, partner at Brick Meets Click, in a statement.

Dive Insight:

April’s e-commerce sales decline follows a nearly 6% decline in year-over-year monthly sales recorded in March, indicating inflation is having an impact on how people are shopping for groceries online, according to the figures from Brick Meets Click and Mercatus.

Over the past year, more people have been venturing back into stores to do their shopping as COVID-19 restrictions have eased and vaccinations have increased. Now the fees and, in some cases, higher prices, of online shopping appear to be spurring further changes to how, and if, consumers shop online as their wallets tighten. 

“Some customers may now find Pickup a more attractive service since it can help them avoid the higher incremental costs associated with Delivery, and others may choose to simply move more of their transactions back into the store,” Bishop said in a statement.

The latest report found that key groups of online shoppers are becoming more price sensitive. Analyzing online orders among active users between March and April, Brick Meets Click found that those who prefer shopping at mass merchandisers were 34% more likely than those who prefer grocery stores to cite cost as the most important factor in determining where they shop.

Pickup, which carries lower fees than delivery, appears to be resonating with price-conscious shoppers. The report found that grocery channel shoppers who use pickup are 18% more likely to cite cost as the main consideration in where to shop compared to delivery users in the same channel.

The nearly 6% drop in delivery sales in April follows a more than 20% year-over-year sales increase in March. Those March results were due, in large part, to heavy promotional activity from third-party e-commerce companies, according to Brick Meets Click.

In April, delivery order volume declined 11% year-over-year, while average order value climbed 6% to $84. Meanwhile, pickup order volume declined 2% while average order value totaled $81, a drop of around 70 basis points. 

Delivery accounts for nearly a third of online grocery sales while pickup accounts for nearly half, according to the report. Ship-to-home sales, which include orders mailed via common carriers like UPS and FedEx, have steadily declined since the early months of the pandemic and dropped more than 3% versus April of last year.

Although e-commerce sales have been slipping, shoppers’ satisfaction with online grocery services appears to be increasing overall, according to the latest report. The likelihood that e-commerce shoppers plan to use the same grocery service within the next month increased nearly 8 percentage points, to 63%. Between March and April, the likelihood that shoppers will use the same service again increased 50 basis points among grocery shoppers, while that metric slid 3 points among mass shoppers.