In 2023, the US online grocery market experienced a downturn, as indicated by a new report attributing the decline to a reduction in the frequency of orders placed by online shoppers.
Bricks Meets Click, a US consultancy that focuses on online shopping, and e-commerce grocery business Mercatus reported the online grocery market in the US finished 2023 with $95.8bn in total sales, down 1.2% compared to 2022.
The survey tracks the “order frequency among monthly active users,” and according to the researchers, this contracted for the second consecutive year in 2023. The average number of monthly online grocery orders completed declined by 6% compared to 2022, marking a continuation of the 4% decrease observed in the previous year.
In contrast, the unadjusted average order value (AOV) experienced a 3% increase overall in 2023 compared to the previous year, unaffected by price inflation. Each delivery method demonstrated year-on-year growth: delivery AOV saw a 3% rise, pickup increased by 2.6%, and “ship-to-home” experienced a 1.7% increase compared to 2022.
“These annual results show that 2023 was very challenging for grocery retailing as higher prices chipped away at household purchasing power even though inflation has slowed considerably since its peak in 2022,” said David Bishop, partner at Brick Meets Click.
“Despite the challenges, pickup continues to prove its appeal to shoppers, even without the benefits of expanded availability and/or aggressive promotions that aided delivery in 2023.”
Regarding the share of wallet, the online channel’s portion of overall grocery expenditure experienced a decline of 18 basis points in 2023, reaching 12.5%.
Excluding “ship-to-home”, which most US supermarkets do not offer, the combined pickup and delivery segments fared slightly better, falling six basis points compared to 2022 and finishing the year with a 10.4% share of total grocery spending.
Mark Fairhurst, global chief growth officer at Mercatus, said, “As Walmart grabs market share through its price leadership and omnichannel strategies, regional grocers find themselves in a precarious position.
“To remain competitive, they must intensify their efforts in improving customer engagement, offering tailored personalisation and building loyalty. This strategic shift is not just about weathering the storm of price inflation and intense competition, but about thriving in it.”
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