business news in context, analysis with attitude

Brick Meets Click and Mercatus are out with their monthly analysis of the e-grocery business this morning, concluding that "April online grocery sales pulled back 3.8% versus last year, finishing at $8.1 billion, as total order volume dropped 5.8% driven by lower order frequency and a slightly smaller monthly active user (MAU) base."

The analysis goes on:

"Delivery-related sales, which accounted for almost one-third of total online grocery sales during April, dropped nearly 6% versus a year ago and contributed nearly half of the decline in total sales year-over-year.  The segment’s average order value (AOV) jumped 6% to $84 versus April 2021, helping to mitigate an 11% decline in order volume that was mainly driven by an MAU base that contracted nearly 9% over the past year.

Ship-to-Home, the smallest segment with just over one-fifth of the sales in April, fell over 3% versus last year. Order volume drove the decline, dropping nearly 6% versus April 2021, while the AOV increased by almost 3% to $47. The decline in order volume was the result of a contraction in the MAU base of more than 2% as well as MAUs receiving 4% fewer Ship-to-Home orders during the month.

"Pickup, the largest eGrocery segment with almost half of total sales, declined by less than 3% versus the prior year. Unlike the other two segments, Pickup reported a nominal drop in AOV of approximately 70 basis points to $81; this, combined with a 2% drop in order volume, contributed to the year-over-year decline in sales. Versus April 2021, Pickup’s MAU base shrank by less than 3% and order frequency among its MAUs was essentially unchanged."

The report also concludes that "the likelihood for an online grocery shopper to use the same service again within the next month increased during April, coming in at almost 63%, up almost 8 percentage points on a year-over-year basis."

KC's View:

No surprise here.  The combination of a post-pandemic mentality and the pressures of inflation almost certainly will create some backing off from Covid-era behavior.

That's not to suggest that e-grocery somehow is going to go away.  In many ways, this is just a temporary correction … and there still are a bunch of companies out there pushing faster and faster delivery windows, which will create heightened expectations.