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Measuring the Online Grocery Market Sales Share in the US – August 2023

Mass Captures 6 Percentage Points More of the Total US eGrocery Sales Over Past 4 Quarters

There has been a dramatic shift in the online grocery sales landscape over the past year. Mass retailers, led by Walmart, have quickly expanded their market share, creating a difficult environment for regional grocers.

This writeup summarizes the key data and findings from the Mercatus/Brick Meets Click August 2023 Online Grocery Market Sales Share in the U.S. research report. This writeup also aims to provide the intricate details and support grocers on adapting to current conditions, so they may adjust their strategies for future success.eGrocery Sales Market Share August 2023

Mass Retailers Gain Market Share

Walmart alone now commands an astounding 36% of all U.S. eGrocery sales as of Q2 2023, marking a more than 5-percentage-point increase from the prior year. Furthermore, mass retailers have eclipsed supermarkets in market share for the third consecutive quarter.

For regional grocers, this isn’t just a data point—it’s a call-to-action. Walmart’s gains are not only significant but are accelerating, effectively tripling their year-over-year growth rate. This signals that mass retailers are successfully leveraging their cost competitiveness and scale to attract a broader group of consumers, many of whom shop at regional supermarkets.

The Economic Squeeze on Consumers

The impact of economic pressures seems to be driving consumers toward cost-effective shopping options. The purchasing power of U.S. consumers has declined by over 7% in the first half of 2023, following a more than 9% drop in 2022. This financial strain is exacerbated by the expiration of COVID-related financial supports and additional burdens such as commuting and childcare costs.

For regional grocers, these economic realities can no longer be viewed as temporary fluctuations; they’re the new normal that is reshaping consumer behavior. As household budgets tighten, price is becoming a more significant determinant of where people shop, leading many to opt for mass retailers like Walmart and Target. To remain competitive, regional grocers may need to reevaluate their value propositions. This could involve providing more cost-saving options, optimizing supply chains for better pricing, or leveraging personalized shopping experiences to keep the customer base loyal and engaged.

Shift in Consumer Behavior: Pickup Gains Traction

The rise of Pickup services in eGrocery sales presents both a challenge and an opportunity for regional grocers amid changing consumer preferences. Pickup services now account for nearly 48% of eGrocery sales as of Q2 2023, marking a nearly two percentage point increase from the previous year. Mass retailers dominate this segment with a 60% share, while regional grocers maintain a narrow lead in the delivery space. However, this lead is precarious, as trends suggest Mass could surpass regional grocers in delivery within a quarter or two.

For regional grocers, it’s an opportunity to lean into a Pickup-first strategy. The growth in Pickup services is not accidental; it’s a direct result of consumer demand for convenience and cost-effectiveness. Mass retailers have already capitalized on this by ramping up their Pickup offerings. If regional grocers want to maintain and grow their market share, they must act swiftly to expand their Pickup services. This could mean allocating resources for infrastructure, employing targeted marketing strategies, and optimizing the Pickup experience for customers.

Age Group Dynamics

The changing spending patterns within the 30-44 age group signal a need for regional grocers to reevaluate their customer engagement strategies. The 30-44 age group has traditionally been the most valuable demographic for eGrocery sales. However, recent data indicates that this age group, along with those under 30, are reducing their online spending, potentially due to economic pressures.

This shift has serious implications for regional grocers who have counted on these age groups as their main revenue drivers in the online grocery channel. Now, more than ever, it’s critical to engage these age groups with value-driven offerings, personalized experiences, and loyalty programs that incentivize repeat business. Ignoring these changing dynamics could result in a lost opportunity to maintain a strong hold on a traditionally reliable customer base.

Decline in Overall eGrocery Sales and Customer Engagement

The downward trend in overall eGrocery sales and customer engagement is a signal for regional grocers to recalibrate their online strategies. The market share data shows a 1.1% decline in eGrocery sales in Q2 2023, primarily driven by fewer orders per household and a slight decrease in consumer interest in online grocery shopping. Moreover, the percentage of U.S. households making at least one online grocery order has slipped to just under 53%, with most of the reduction occurring in the lower quartiles of online spending.

Regional grocers must see this as an opportunity to reassess and adapt their online offerings. Whether it’s through enhancing user experience, offering more cost-effective options, or better leveraging data analytics for personalized marketing, now is the time to act.

Competing on Go-to-Market

Price isn’t the only battleground; customer loyalty, particularly in Pickup services, is emerging as another critical front where mass retailers are gaining ground. The data revealed that mass retailers are outperforming regional grocers in customer repeat rates for the next month, especially in the Pickup category. This is likely due to a virtuous cycle where higher order volume allows for better staffing and thereby improved customer service.

For regional grocers, it’s not merely about being the low-price option; it’s about creating an ecosystem that encourages repeat business. As suggested above, a high volume of orders allows for better staffing, which in turn boosts customer service—contributing to a cycle that secures customer loyalty. Regional grocers should be investing not just in price competitiveness but also in training and staff allocation, especially for Pickup services. It’s an integrated approach that doesn’t just attract customers, but keeps them coming back.

Strategic Recommendations for Regional Grocers

Given this backdrop, grocers need a strategy that prioritizes building customer loyalty and profitability:

  1. Focus on value-added services like digital deals, multi-purchase offers, and rewards discounts.
  2. Offer Pickup as a lower-cost alternative to Delivery. This is where you can catch the customer’s eye and compete against the mass retailers.
  3. Innovate in areas where mass retailers can’t or won’t, such as localized product offerings, better customer service, or more flexible delivery options.
  4. Execute your existing strategies flawlessly. The current environment may be tough, but poor execution will only increase issues.


These trends are reversible, but they are unlikely to change in the short term. Economic improvements could shift some advantages back to regional grocers, but grocers should prepare for a prolonged battle.

The path to not just survival but growth lies in agility and innovation. Regional grocers should focus on immediate strategic adjustments—from investing in customer service to optimizing their online platforms for both Pickup and Delivery. As frequently mentioned, the perfect mix is blending cost savings with convenience.

Grocers that adapt quickly, invest wisely, and execute flawlessly will not only weather the storm but will pave their own way to profitability and growth.

Read the complete press release here.

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Mark Fairhurst Headshot

Mark Fairhurst

Chief Growth Officer, Mercatus

David Bishop

David Bishop

Partner, Brick Meets Click