In November 2024, the United States saw a slight decline in grocery sales, totaling $74.92 billion compared to $75.06 billion in October. This figure, reported by the U.S. Census Bureau, reflects a 0.2% month-on-month drop, signaling some volatility in the grocery sector amid continued elevated prices. However, grocery sales were stronger than the $73.65 billion recorded in November 2023, illustrating a year-over-year growth despite the recent dip.
The recent report from the U.S. Bureau of Labor Statistics confirmed that the consumer price index for food at home increased by 0.5% in November, contributing to consumer hesitance. In contrast, overall retail sales rose by 0.7% in November, building on the momentum from a 0.5% increase in October. According to Jack Kleinhenz, chief economist at the National Retail Federation, these trends indicate steady consumer behavior, particularly in the lead-up to the holiday shopping period.
He noted, “These numbers combined with better-than-expected October sales are evidence that consumer spending continues to fuel the economy. Job gains, wage increases, and moderate inflation have paved the way for solid holiday spending.” This hints at an overall resilient consumer landscape even as the timing of Thanksgiving delayed typical holiday shopping trends, pushing key shopping days into December.
Interestingly, while traditional grocery sales faced some stagnation, grocery e-commerce exhibited robust growth. The Brick Meets Click/Mercatus Grocery Shopper Survey reported a 17.8% increase in year-over-year e-grocery sales, reaching $9.6 billion in November. Remarkably, 77.8 million households purchased groceries online in November 2024, eclipsing the previous high set during April 2020. This surge highlights the growing consumer reliance on online grocery shopping, a trend amplified by ongoing digital engagement strategies from retailers.
The acceleration in online grocery sales appears to stem from an increase in the monthly active user base and slightly higher order frequency. Consumers, however, spent about the same on average per order compared to the previous year, indicating a growing frequency of purchases rather than increased per-transaction spending.
Moreover, delivery sales in the e-grocery segment saw a notable uptick of 22% year-over-year, now representing 40.6% of all online grocery sales. Pickup fulfillment, on the other hand, rose by 8%, comprising 41.3% of online grocery sales, while ship-to-home options accounted for 18.1%.
David Bishop, a partner at Brick Meets Click, stressed the importance of robust customer engagement strategies during this period. “Supermarkets benefited from widespread and deep discounts on membership and subscription programs offered by both national and regional grocers throughout November,” he stated. However, he warned that competition in the online grocery space continues to intensify, urging retailers to focus on retaining and expanding their customer base amid increasing rivalry.
Mark Fairhurst, chief growth officer at Mercatus, echoed this sentiment, emphasizing that fostering larger orders and repeat purchases hinges on providing a personalized and seamless online shopping experience. He recommended that grocers enhance customer loyalty by offering tailored product recommendations based on consumer preferences and lifestyles, alongside user-friendly rewards programs and intuitive website navigation.
In 2024, as retail environments evolve, creating a user-centric online grocery shopping experience will be paramount for supermarkets aiming to capture and retain customers. Emphasizing personalization can not only improve customer satisfaction but also build trust and encourage long-term engagement.
Despite the challenges faced by traditional grocery sales, the strong performance of e-commerce indicates a pivotal shift in consumer shopping behavior. As the sector adapts, leveraging data analytics and customer engagement frameworks will be essential for driving success in the competitive grocery landscape. Retailers must prioritize the development of their e-commerce strategies to ensure they can meet the growing demands of today’s shoppers effectively.
