E-Grocery Sales Down 3.8% in April, Dogged by Inflation

E-grocery sales in April fell 3.8% to $8.1 billion, while order volume was down 5.8% and market share dipped as nagging inflation and the ongoing return to stores hit both order frequency and the number of active online users, according to a monthly survey from Brick Meets Click and Mercatus.

The sector has been giving back some of the the healthy gains it saw in 2020 and 2021 as online was a lifeline for grocers across the board. For the month of April, e-grocery saw a 12.3% of total grocery sales, down slightly from 12.7%.

The inflation impact is undeniable. Of the $83.1 billion spent online in March, according to Adobe, $2.8 billion was due to higher prices, citing groceries as a main category. Adobe said grocery prices were up 9% in March.

Home delivery orders, representing a third of April’s sales, were down nearly 6% from the prior year, accounting for nearly half the decline in total sales, Mercatus and Brick Meets Click said. On the positive side, average order value for home delivery rose 6% to $84, helping offset an 11% drop in order volume from a customer base that contracted nearly 9%.

Ship-to-home orders, the small segment at about 20% of sales, was down 3% in April. Order volume was down 6%, while AOV increased nearly 3% to $47. The decline in order volume was the result of a 2% dip in monthly active users, who received 4% fewer orders during the month.

Pickup, representing nearly half of all e-grocery sales in April, was down about 3%. AOV for this category was down less than 1% to $81, while order volume declined 2%. The number of monthly active users was down about 3% and order frequency stayed the same.

“It’s no surprise that inflation is affecting where and how people shop online for groceries,” said David Bishop, a partner at Brick Meets Click. “Some customers may now find store 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.”

Shoppers at mass market retailers, such as Target, Walmart, Costco or BJs, were more cost-conscious than those going to standard grocery stores, Mercatus and Brick Meets Click found. During March and April, mass market shoppers were 34% more likely than grocery shoppers to say cost was the most important factor in where to shop online.

Customers who picked up their online orders at grocery stores were 18% more likely to cite cost as the primary driver than those using delivery services, while those picking up at mass market retailers were 11% more likely to do so.

Among those who shopped online for groceries, 63% said they were likely to do so again in the next month, up from 55% a year ago.

Brick Meets Click/Mercatus surveyed 1,746 adults on April 27-28.