Grocery e-commerce surge to continue, despite drop in August

Published on
September 16, 2020

Kroger, Walmart, Target, Albertsons, and other major U.S. grocery chains are experiencing record e-commerce grocery sales. And while total grocery e-commerce sales declined in August, analysts expect stronger future growth.

U.S. grocery delivery and pickup sales for August totaled USD 5.7 billion (EUR 4.8 billion), down from their peak in June, according to the August 2020 Brick Meets Click/Mercatus Grocery Shopping Survey.

However, Americans are buying a larger volume of groceries online and ordering more frequently, the research firms found.

The average order value for online grocery pickup and delivery increased to a record high of USD 95 (EUR 80), a surge of 32 percent compared to last August. Plus, active online grocery shoppers placed 1.6 online orders per month compared to one per month in August 2019.

Around 37.5 million, or 29 percent of all U.S. households, are considered monthly active users of online grocery pickup and delivery services in August 2020 compared to 16.1 million a year ago – a 133 percent increase.

In addition, shoppers’ intent to make a repeat purchase in the next month with the last service used reached 75 percent.

“This level of repeat intent is a significant improvement from June, highlighting how improved retail conditions are leading to stronger shopping experiences,” Brick Meets Click/Mercatus said in a post on its website. “Many have been anticipating there would be a drop from peak COVID sales for grocery delivery and pickup at some point. Now that we have seen the expected adjustment in total sales, we have a better idea of what the market will look like going forward. We see a large base of committed shoppers, which shows signs that the online grocery pickup and delivery market is substantial and can be expected to strengthen.”

Major retailers are reaping the benefits of Americans’ increased affinity for buying grocery online and utilizing pickup and delivery services.

For example, Kroger’s e-commerce sales soared 127 percent in its second fiscal quarter.

Kroger CEO Rodney McMullen said he believes that the trend towards consumers cooking at home more, which has fueled the surge in both in-store and online sales, will continue well into the future.

"So everything that we can see, it's something that will be a long-term trend because people have, one, learned how to cook and, two, found they really enjoy it,” McMullen said on CNBC’s Closing Bell. “And the other thing that's special, is when families eat as a family, they stay together. The kids don't get into as much trouble.”

Amazon is also committed to future e-commerce growth, saying it will hire 100,000 full-time and part-time workers in the U.S. and Canada to meet heightened demand.

The Giant Co. also plans to hire 4,000 new employees, Supermarket News reported.

Grocery stores are also noting higher food prices, which rose 4.1 percent in August, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI). Fueling the increase over the past year are the meat, poultry, fish, and eggs categories, which rose 7.1 percent since August 2019, Supermarket News reported.

In other retail news, Walmart will open a Hissho Sushi and Craft Beer Bar inside one of its stores in Rogers, Arkansas. The concept features sushi made by trained sushi chefs, as well as hot appetizers and craft beer.

And in Aldi U.S.’s Fan Favorites 2020 survey, shoppers said the retailer’s seafood brand has the best shrimp. Aldi’s Fremont Fish Market Medium EZ Peel Raw Shrimp won the Fan Favorite vote for best seafood product.

Photo courtesy of Hananeko_Studio/Shutterstock

Contributing Editor

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