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The October Brick Meets Click/Mercatus Grocery Shopping Survey is out, concluding that "the US online grocery market finished October with $7.8 billion in total sales, down 3% compared to a year ago and flat versus the prior month … While October's year-over-year decline was similar to the prior month, October's results were driven by different factors, including changes in spending per order, order frequency, and monthly active users (MAUs), that were not evenly distributed across the leading retail formats like Mass and Grocery."

More from the report:

"During October, and unlike the prior month, all three segments (Pickup, Delivery, and Ship-to-Home) experienced slowdowns in spending per transaction, declining 5% in aggregate versus the same period last year. Ship-to-Home’s average order value (AOV) contracted the most, dropping nearly 11% versus a year ago; Delivery’s AOV slipped more than 7%, and Pickup’s dipped just over 3% during the comparable periods. This broad-based downturn in online grocery spending suggests that customers are either shifting some purchases offline and/or buying fewer items in general due to a challenging economic outlook combined with persistent price inflation.

"Order frequency, defined as the number of orders received by MAUs during the period, was another area where October trends differed from those in September. The composite order frequency for October fell nearly 7% as all three segments slipped versus last year. For the specific segments, Ship-to-Home MAUs declined the most, receiving 12% fewer orders in October compared to last year, while Pickup contracted 7%, and Delivery was essentially flat, declining less than one-half of a percent. The softening of this metric indicates a subtle shift in how customers get groceries, with offline purchases gaining from more in-store trips."

The report goes on:

"The overall eGrocery MAU base, which encompasses users of Pickup, Delivery, and Ship-to-Home, grew by 10% in October on a year-over-year basis but slipped slightly versus last month.   Each segment experienced growth in its respective MAU base, driven by a 10% gain for Delivery, followed by an almost 8% lift for Pickup, and a nearly 6% bump in Ship-to-Home users.  Although the difference between the MAU base for October and September may reflect the impact of less-frequent customers who cycle in and out of online grocery shopping, the positive trends across the board highlight a larger customer base that retailers can nurture to unlock additional, latent demand."

KC's View:

I continue to believe that declines in e-grocery are more a function of accelerated growth propelled by the pandemic slamming into headwinds created by inflation and a recessionary mindset.  A certain amount of retrenchment is to be expected, but in the end, as the economy levels off, I would expect that e-grocery sales will be a lot higher than it was pre-pandemic, and will continue to grow.