Grocery E-Comm Losing Share in High-Price Environment: Study

Brick Meets Click reveals shifts in omnichannel

5/3/2023

A new Brick Meets Click analysis points to changes in the retail mix for online grocery purchases.

Although more people are buying groceries online, the last year has seen some movement away from traditional grocers in the e-commerce space. That’s a key takeaway from a new analysis conducted by Brick Meets Click.

According to the report, "Profiling the Online Shopper: eGrocery Purchase Patterns in the U.S.," the online penetration of grocery stores dipped two points in 2022 over the previous year. Analysts reviewed results of monthly Brick Meets Click/Mercatus Grocery Shopping Surveys for both years and found that while half of U.S. households order groceries online each month, only a third of those buy from grocers’ online sites and apps.

“This analysis highlights the benefit to supermarkets of better understanding who their core online customer segments are, and the value that different shopper segments represent to them,” asserted David Bishop, partner at Brick Meets Click. “These findings provide evidence that can support recommending refinements to how supermarkets compete online – especially against the lower-priced leaders in the market.”

The decline in grocers’ share of the e-comm market is attributed in large part to inflation that marked much of 2022. For example, households with an income under $50,000 a year were 25% more likely to buy groceries online with Walmart compared to traditional grocery stores.

At the same time, higher-earning consumers also made changes to their digital behaviors. The Brick Meets Click report found that households earning more than $200,000 a year, who have been more likely to shop online with supermarkets, likewise upped their digital purchases at Walmart last year. That’s notable, given that households with that income level generate a fifth of grocers’ online sales and typically spend 80% more online with supermarkets than lower income households.

The new report also drew distinctions between Walmart and Target as competitors to mainstream grocery stores. Although the customer base for conventional supermarkets and Targets tends to be similar, Target attracts younger households, including those with families and those between the ages of 18 and 29.

Sylvain Perrier, president and CEO of Mercatus, said that grocers can take steps to shore up their e-commerce share of market. “Customers who shop with supermarkets tend to do so because of the quality of products they can receive, rather than paying the lowest price. So, identifying and improving aspects of the online shopping experience that matter more to the quality-conscious customer can help increase competitiveness in ways that are not focused solely on price,” he advised.