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Grocery delivery helped deliver a stellar Q3 for online grocery sales, which jumped 13.8% year over year to $27.4 billion, according to data from Brick Meets Click and Mercatus released this week.
E-grocery saw growth across all three fulfillment methods, with delivery (including first-party and third-party providers) surging 25% YoY to $10.9 billion in sales after a 6% decline last year, while ship-to-home jumped 15% and pickup rose 5%. The growth in delivery comes as players like Walmart and Amazon along with third-party delivery providers like Instacart, DoorDash, and UberEats have also been working to grow their grocery delivery businesses with new offerings and partnerships.
The mass retail channel, including retailers like Walmart, continued to shine, thanks to delivery and ship-to-home. It grew its share of delivery to 52.7%, pushing supermarkets down to under 38%, and share of ship-to-home to 16.4%, taking Amazon’s grip on the segment down to 50.1%. Mass lost some share in the pickup segment, however, which Brick Meets Click and Mercatus said was likely due to Walmart’s efforts to grow delivery within its Walmart+ membership.
The results highlight the “importance of strengthening the customer value proposition to align better with the evolving expectations associated with shopping online for groceries,” Brick Meets Click partner David Bishop said in a statement.
“Mass, and Walmart in particular, have demonstrated the value of better understanding online shoppers’ preferences while also leveraging its vast store network and digital reach to grow faster than the overall market,” he said. Brick Meets Click reported last month that Walmart’s e-grocery growth in the first half of 2024 was supported by a small but growing base of consumers with household incomes over $200K—a notable gain for the retailer which counts lower-income consumers as its largest customer base—while Target, hard discount retailers, and supermarkets lost ground within this shopper segment.
Supermarkets continue to be challenged as the fraction of the e-grocery monthly active user base cross-shopping for groceries at mass rose to one-third in Q3. While the likelihood of customers reusing the same delivery service has dropped over the past three years across both channels, it’s declined more significantly for supermarkets. To regain ground, Mark Fairhurst, chief growth officer at Mercatus, said supermarkets need to “deepen their customer connections and enhance their service,” offering personalization and savings to shoppers.