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The Brick Meets Click/Mercatus Grocery Shopper Survey is out, reporting that "the U.S. online grocery market finished 2023 with $95.8 billion in total sales, down 1.2% compared to 2022."  The study concludes that "a decline in order frequency by online grocery shoppers was the primary factor driving the lower sales in 2023."

Key findings:

•  "Order frequency among monthly active users (MAUs) contracted for the second year in a row in 2023. The average number of monthly online grocery orders completed (including all receiving methods) fell 6% versus 2022 following a 4% decline in the previous year. Contributing to the year-over-year contraction was an increase in the share of MAUs who made only one eGrocery order per month, which rose over 300 bps to 34% in 2023."

•  "Average order values (AOV) … not adjusted for price inflation, rose 3.0% in aggregate in 2023 versus the prior year. Each receiving method posted year-over-year increases: Delivery AOV grew by 3.0%, Pickup increased by 2.6%, and Ship-to-Home rose 1.7% over 2022."

•  "The overall MAU base, which includes all three receiving methods, climbed 2.0% compared to the previous year. However, there was a 172-bps increase in the share of MAUs who used one method exclusively (Pickup, Delivery, or Ship-to-Home) to receive their online grocery order(s), and 70% of MAUs fell into this single-method user category in 2023."

•  "Pickup, the largest of the three segments, finished the year relatively steady versus 2022, growing its share of eGrocery sales by 56 basis points (bps) to 46.0% in 2023."

•  "Delivery, despite expanded availability due to increased competition among third-party marketplace providers, experienced a sales dip of 0.9% in 2023 versus the prior year but gained an additional 11 bps of sales share ending the year with 37%."

•  "Ship-to-Home continued its annual contraction as sales slipped 4.9% on a year-over-year basis, leading to a 66-bps drop in sales share to 17%."

KC's View:

Not a huge surprise that at a time when inflation was a problem for most Americans, and food inflation was a persistent reminder of people's economic challenges, people would back off e-grocery to some degree.  The irony is that in some ways, shopping online for groceries actually can give careful shoppers a way to exert greater control over their expenses.

But perception doesn't always line up with reality, and so we see the decline in e-grocery sales.  Over the long haul, I think, e-grocery will continue to grow.  Slowly but surely.