U.S. online grocery sales in August 2024 grew across the board year over year, according to new data from the monthly Brick Meets Click and Mercatus Grocery Shopping Survey.

Brick Meets Click and Mercatus define the three receiving methods for online grocery sales as:

• Delivery: Includes orders received from a first- or third-party provider like Instacart, Shipt or the retailer’s own employees.
• Pickup: Includes orders received by customers either inside or outside a store or at a designated location/locker.
• Ship-to-home: Includes orders that are received via common or contract carriers like FedEx, UPS, USPS, etc.

And online grocery sales from each method grew year over year in August 2024. Although all three methods grew, the delivery method contributed to more than half of the overall increase in sales during the month, growing 10.2% year over year. Brick Meets Click and Mercatus attributed this to “a continued surge in the number of monthly active users (MAUs).”

Online grocery sales surge in August 2024

The U.S. online grocery market combined for $9.9 billion in sales during August 2024. That’s a 7% year-over-year increase, according to Brick Meets Click and Mercatus data. It also marked the third straight month of high-single-digit growth for online grocery sales in 2024, the companies added. They attributed the growth to “strong promotional efforts for subscription and membership programs that started in May.”

Moreover, August recorded the highest online grocery sales total to date in 2024. That was also the case in 2023.

Ship-to-home accounted for a fifth of total online grocery sales growth in August, Brick Meets Click and Mercatus said. Sales from that fulfillment method grew 8.9% year over year to reach $1.8 billion. The companies credited that to “significantly higher average order values (AOV),” which they said offset flat growth in MAUs and a drop in order frequency.

Although pickup accounted for the most sales overall, its growth rate wasn’t as high as the other two methods, at 3.5%. The companies credited this to “a pullback in order frequency and AOV.”

“Achieving growth will only get more challenging for grocers that don’t have a competitive offering or ways to offset the discounts,” said David Bishop, partner at Brick Meets Click, in a statement. “Converting a customer into a member/subscriber motivates them to buy more frequently, especially given that most firms are promoting ‘free’ delivery. Even though there’s a cost to join, explicit fees are an on-going source of friction that many shoppers want to avoid.”

Impact of Walmart and Mass Merchants on online grocery sales

Those special offers and promotions have mainly focused on delivery services, he said. Walmart, specifically, was one of the primary beneficiaries of the various promotional activities. The retailer’s MAU base grew by about 9% year over year.

Walmart is No. 2 in the Top 1000, Digital Commerce 360’s ranking of North America’s online retailers by web sales. Additionally, Walmart is No. 9 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top marketplaces by third-party gross merchandise value (GMV).

“The collective impact of these promotional efforts is evident after analyzing sales results across the last six months,” Brick Meets Click and Mercatus said.

In the three-month period following the start of the promotions, June 2024 to August, total online grocery sales growth accelerated. It increased to 7.9% year over year, compared to 1.4% year over year for the preceding three-month period (March 2024 to May).

The impact on delivery, specifically, has been more dramatic, they said. Year over year, delivery sales grew 16.1% from June 2024 to August. That compares with just 0.6% growth from March 2024 to May. The companies attributed that to a 13.9% increase in MAUs from June to August. That compares with 4.6% growth from March to May. Order frequency also increased 14.9% from June to August, compared to 2.2$ from March to May.

“We know regional grocers are facing increased competition from retail giants like Walmart and Amazon, who can leverage huge pools of CPG ad monies to sustain aggressive promotions and capture more share of the online business,” said Mark Fairhurst, chief growth officer at Mercatus, in a statement. “Regional grocers should play to their strengths in fresh foods, private label, and convenient locations while investing in targeted promotions that resonate with existing customers. Creating stronger customer connections via relevant, personalized engagement is vital for building loyalty and competing digitally today.”

Read last month’s update here.

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