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The Spoon

Daily news and analysis about the food tech revolution

Brick Meets Click

Survey: Online Grocery Falls in August, Though Majority Will Continue E-Shopping

What goes up must come down, especially, in this case, when people feel safe enough to go out. New survey data from Brick Meets Click/Mercatus shows that U.S. grocery delivery and pickup sales for August dropped to $5.7 billion, down from June’s record high of $7.2 billion.

This pullback in online grocery isn’t a huge surprise. Between March and June of this year, online grocery shopping had seen one record month after another, but that growth was artificially inflated, fueled by the pandemic.

According to Brick Meets Click, the fall in online grocery dollars correlates with increased ease about COVID-19, with 38 percent of U.S. households expressing high levels of concern about the virus in August versus the high of 47 percent in April.

“There is a common belief that the rapid and dramatic surge in sales caused by COVID-19, starting in mid-March, would recede at some point as stay-at-home orders and in-store shopping restrictions like occupancy limits, shortened hours and one-way aisles were relaxed,” David Bishop, a partner at Brick Meets Click, said in a press release announcing the August results. “While the August results reflect a retrenchment of sorts, the market appears positioned to begin a new growth cycle with a large base of committed shoppers.”

This larger base is actually good news for those investing in online grocery services. Brick Meets Click said that roughly 37.5 million, or 29 percent of all U.S. households, are monthly active users of grocery delivery and pickup. That’s an increase of 133 percent over August of 2019, when that number was just 16.1 million.

August wasn’t without its own record setting, however. Brick Meets Click found that spending per order hit a record $95 in August, up 32 over a year ago. Active shoppers placed 1.6 orders per month versus 1.0 orders during the same time last year.

Additionally, more people are developing new online grocery shopping habits. According to the survey, 75 percent of customers said they are “extremely or very likely” to online grocery shop through their retailer again within the next 30 days. This desire to continue shopping online, said Brick Meets Click, was likely because of improved online shopping experiences.

Considering that people have been living under pandemic conditions for half a year (!) now, new habits have definitely set in. One thing to look for is the change in the weather. Now that people have experienced online grocery shopping, will they return to it when the weather outside is frightful (and delivery and pickup can be so delightful)?

Online Grocery Sales Climbed to $7.2 Billion in June

U.S. grocery e-commerce sales continued to break records as they hit $7.2 billion in June, up 9 percent from May (which saw $6.6 billion in sales), according to a new Brick Meets Click/Mercatus Grocery survey announced today.

The survey, conducted between June 24 – 25, also found that 45.6 million households used delivery and curbside pickup for a larger portion of their grocery needs, and order frequency grew to 1.9 orders per month, up from 1.7 in May.

Online grocery shopping has had a big year, spurred on by the COVID-19 pandemic and people sheltering in place. I was particularly interested to see what the June numbers would bring, as many states relaxed their lockdowns restrictions. However, despite re-openings, the coronavirus still loomed large over people’s shopping in June. From the Brick Meet Clicks press announcement:

In June, 44% of all households reported high levels of concern about someone in their household contracting COVID-19, up two percentage points from the previous month. The increase was almost entirely driven by a 9% increase among shoppers in the over-60 age segment since May.

Brick Meets Click noted that retailers of all sizes have been aggressive in expanding capacity to meet the demand for all this increased e-commerce. Anecdotally speaking, I’ve seen this play out where I live, as grocery stores big and small have both launched new online ordering platforms and carved out more space in the parking lot to fulfill pickup orders.

Will record-setting grocery e-commerce continue into the summer? There’s a good chance it will as the pandemic shows no signs of slowing down and restaurants are forced to shut down again. With three full months of pandemic quarantining in place, new habits have definitely formed. And all the confusion around opening/closing/partial opening, people could just force people to throw their hands in the air and stick with online grocery shopping for the rest of the year.

Online Grocery Sales Hit $5.3 Billion in April, Up 37 Percent from March

April was a record-setting month for U.S. online grocery sales, which reached $5.3 billion, according to new research released by Brick Meets Click and Symphony RetailAI earlier this week (tip of the hat to Grocery Dive). This represents a 37 percent growth over March, which was its own record month with $4.0 billion in sales.

The Brick Meet Click survey found that over the last 30 days, 40 million people shopped for groceries online (up from 39.5 million in March), with the total number of orders hitting 62.5 million in April (up from 46.9 million in March), and a slight increase in spending per order at $85 in April (up from $82 in March). Consider, for comparison, that a Gallup survey in August of last year showed that only 11 percent of respondents shopped for groceries online once a month.

All of this record-setting action, of course, is driven by the COVID-19 pandemic and shelter-in-place orders enacted across the country starting in March. This isolation and social distancing spurred droves of people online to shop for groceries to be either picked up curbside or delivered.

Among the motivating factors for grocery e-commerce was fear. Brick Meets Click found that 47 percent of households surveyed had a “high level” of concerns about catching the novel coronavirus. This echoes a recent survey from C+R Research that found 60 percent of respondents were “fearful” of actually shopping at the grocery store.

These record months of online grocery shopping have put a tremendous strain on the grocer retail infrastructure. Amazon, Walmart, Kroger Instacart and others have all ramped up hiring and added additional measures to try and keep up with the sudden uptick in demand.

But despite two record months in a row, there are bigger, more existential troubling signs on the horizon. In addition to all the boomtown data Brick Meets Click found, its survey also gave us a sobering glimpse at the economic hardship data that lags behind the big sales numbers: 39 percent of surveyed households indicated that their monthly income has dropped 25 percent or more since January and February of this year. Less household money, sadly, means less spent at the grocery store.

Though grocery stores have remained opened during this pandemic, some states are starting to ease their shelter-in-place restrictions. We look forward to seeing Brick Meets Click’s May scorecard to see if and how online grocery shopping behavior has changed.