Continuing and deepening a downward trend, the U.S. online grocery market posted $7.2 billion in total sales, down 7.0% compared to last year.

This was according to the latest monthly Brick Meets Click/Mercatus Grocery Shopping Survey, which was conducted at the end of July.

The month’s downtrend was seen across all three receiving methods and was driven by a pullback in order frequency plus constrained spending per order, despite a larger base of monthly active users (MAUs) than the prior year.

"July’s results reflect the growing financial challenges many consumers are facing today,” said David Bishop, partner at Brick Meets Click, an industry data analysis and consulting company.

“These challenges along with evolving expectations, driven by experience engaging with mass merchandisers, are contributing to the growing gap between conventional grocers and their merchandiser rivals."

Mass merchandisers experienced a surge in customers while grocery experienced only a modest gain in MAUs during July, like the trend that was observed in June. In addition, the average order value for grocery dipped by more than 5% while Mass merchandisers finished up very slightly.

More households are buying groceries online, the researchers found. For July 2023, the overall MAU base continued to grow as the total number of U.S. households that bought groceries online increased nearly 5% versus last year.

This growth was driven by a more than 7% increase in the Pickup MAU base, while Ship-to-Home’s base remained flat and Delivery’s contracted 1% compared to July 2022.

Delivery includes orders received from a first- or third-party provider like Instacart, Shipt or the retailer's own employees. Ship-to-Home includes orders that are received via common or contract carriers like FedEx, UPS, USPS, and others.