Walmart wins e-commerce grocery sales from traditional grocers
- Walmart netted nearly 36% of all U.S. e-commerce grocery sales in the second quarter, according to Brick Meets Click.
- While supermarkets held a 150-basis point (bps) share edge over Walmart during the second quarter of 2022, Walmart surpassed supermarkets in the fourth quarter of 2022 and finished with a 570-bps share advantage this year.
- Target also gained 70 bps of share versus 2021, and finished the second quarter with approximately 7% of grocery’s e-commerce sales.
Walmart netted nearly 36% of all U.S. e-commerce grocery sales in the second quarter, up more than 5 percentage points from the prior year and its highest share to date, according to a new report by Brick Meets Click and sponsored by Mercatus. The benefits that pickup offers consumers helped to drive Walmart's share increase, which finished at 48% for the second quarter, almost 2 points higher than last year.
In the third quarter of 2022, Walmart’s share (excluding Sam’s Club) first surpassed supermarkets when food-at-home price inflation peaked, according to Brick Meets Click, and it has been gradually building its top spot as the e-commerce grocery market leader each quarter since then.
While supermarkets held a 150-basis point (bps) share edge over Walmart during the second quarter of last year, Walmart surpassed supermarkets in the fourth quarter of 2022 and finished with a 570-bps share advantage this year, Brick Meets Click reported.
“The combined effect of price inflation and the expiration of COVID financial supports has triggered a flight-to-value as purchasing power remains under pressure,” said David Bishop, partner at Brick Meets Click. “This means it’s vital for grocers to offer customers more ways to save money while also providing the experience that online shoppers expect, as cost considerations will weigh more heavily than convenience for cash-strapped households in the second half of this year.”
Target also experienced moderate growth during the past two years. It has gained 70 bps of share versus 2021, and finished the second quarter with approximately 7% of grocery’s e-commerce sales. Strong and consistent execution – especially in fulfilling pickup orders – and a price gap that is halfway between supermarkets and Walmart likely offered a degree of defense for its online grocery business, according to Brick Meets Click.
Overall, consumer interest in buying groceries online declined slightly during the second quarter with all households except for the most engaged. The share of U.S. households that completed one or more online orders contracted to just less than 53%, down by 275 bps compared to a year ago, according to Brick Meets Click. Total grocery e-commerce sales were down 1.1% in second quarter versus the prior year and the main driver of the sales decline was fewer orders completed per household, down 5% year-over-year for the quarter.
“As competition for the shopper intensifies, regional grocers should be leveraging analytics and insights to provide customers with personalized recommendations, discounts, and offers as well as developing targeted, cost-effective strategies to encourage and reward repeat purchases online and in-store,” said Sylvain Perrier, Mercatus' president and CEO. “In addition, grocers can expand the online market they serve by offering pickup as a lower-cost alternative to delivery.”
While repeat intent rates during the second quarter were down slightly versus last year across pickup and delivery and for core formats (mass, supermarkets and hard discount), the gap between mass and supermarkets for both receiving methods continued to widen. The gap in repeat intent that mass had over supermarkets for delivery climbed by 210 bps and pickup’s grew by 560 bps.