business news in context, analysis with attitude

Brick Meets Click is out with its assessment of June and Q2 e-grocery sales, concluding that in June e-grocery sales were up six percent to $7.2 billion compared to the same month a year ago, while Q2 e-grocery sales were up one percent to $22.4 billion in sales compared to the same period a year ago.

According to the report, "Pickup, the largest segment of eGrocery, performed well; its June and second quarter sales rose 3% respectively versus a year ago. An expanding monthly active user (MAU) base and higher average order values (AOVs) were offset by lower order frequency among its MAUs during both periods. For the second quarter of 2022, Pickup contributed 45.7% of total eGrocery sales, up 80 basis points versus 2021."

In addition, "Delivery’s monthly sales jumped over 20%, and it finished the quarter 6% higher than year-ago results. Gains in the MAU base during both periods drove most of the sales lift, although higher AOVs also contributed to the year-over-year gains. Delivery reported mixed results relative to order frequency as frequency increased during June but declined for the quarter. Delivery captured 34.2% of the online grocery dollar share for the second quarter, up 1.7 percentage points from 2021.

"Ship-to-Home continues a long-term decline that started at the onset of the pandemic in March 2020 when online grocery shopping began to evolve rapidly to meet new needs. Year over year, Ship-to-Home sales fell over 14% in June and by more than 10% for the second quarter. While the segment’s MAU base grew over both periods, consistently lower AOVs drove the sales decline along with a slight contraction in the number of orders placed each month. Ship-to- Home dollar share for the quarter was 20.0%, down 2.6 percentage points versus last year."

“Inflation and COVID are creating cross-currents in the market as higher prices motivate customers to look for ways to avoid paying more than necessary, and ongoing concerns about contracting the virus motivate shoppers to use online grocery as a way to stay healthy,” said David Bishop, partner at Brick Meets Click, in a prepared statement.  “This is especially true as new variants of the virus triggered surges in infection and rising illness rates during May and June.”

KC's View:

I think David Bishop's comments are on-point.  There are a lot of cross currents at the moment, as inflation works to make people leery of practices that will cost them more money, but a new and contagious variant makes people concerned about going to the store.

E-grocery won't grow at the same rate as it did during the pandemic, but in the long run, IMNSHO, it is a mistake to think that this segment won't continue to expand.