U.S. online grocery sales fell 16% in May

The latest e-commerce report from Brick Meets Click and Mercatus shows that total U.S. grocery e-commerce sales in May were $7 billion, down 16% from the same period last year.

The weighted average order value for the month fell 7% year-over-year , with delivery and pickup spending per order falling 14% to $77, while the value of home delivery orders rose 4% to $50.

The study found that as cross-shopping increases, consumers’ expectations of grocery shopping are being influenced by comparable services from mass retailers. In May, 29% of online customers used both grocery and mass retail services, compared to 15% in August 2019.

David Bishop, partner at Brick Meets Click, said U.S. e-commerce sales in May were down sharply compared with the same period last year, when consumers ordered online en masse early in the coronavirus pandemic, making the 16% sales drop less dramatic.

He noted that online sales in the U.S. totaled $7 billion in May, 3.5 times the pre-pandemic level of $2 billion in August 2019, according to Brick Meets Click.

“May results show that the market has retained 70% of its incremental gains from the coronavirus-driven record high of $9.3 billion, indicating that the majority of the pandemic-driven gains remain in place,” Bishop said in the report’s statement.

Looking at the performance of e-commerce so far this year, sales have shown "volatility" as consumers get vaccinated and return to in-store shopping . Online sales in January and March both reached $9.3 billion, while May was the first month this year to see monthly online sales decline for two consecutive months, with a return rate down from $8.4 billion in April.

(Image source: Brick Meets Click)

Survey data shows that store-based e-commerce continues to lead home delivery services as shoppers turn to local grocery stores. Pickup remains the most popular channel, used by 55% of monthly active users, up 4 percentage points from May last year. Nearly 30% of active users only use the pickup function for e-commerce purchases, indicating that consumers prefer a more profitable service than delivery, and 17% of active users only use delivery services on a monthly basis.

In the early months of the pandemic, shoppers spread their spending across a range of home delivery services as local grocers faced capacity issues . That spending continued to contract, with home delivery share of active users falling 6 percentage points year-over-year and order share falling 8 percentage points.

While the sales volatility isn't surprising, Brick Meets Click reported that there are still signs that online grocery loyalty is weak amid growing competition. The repeat usage rate -- the likelihood that an active online user will use the same grocery service again in the next month -- was 53%, 4 percentage points lower than a year ago. It's also Brick Meets Click's lowest rate so far this year, down from a high of 62% in March.

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