More Americans are browsing again — in grocery-store aisles rather than online.
With U.S. states abandoning mask mandates in public places, and more retailers dropping requirements for masks — and the latest omicron wave that led to a spike in COVID-19 cases over the winter now receding — more people are feeling comfortable shopping in person and participating in public activities.
U.S. online grocery sales declined by 6% on the year to $8.7 billion in March, a sharp reversal from a record high of $9.3 billion online grocery sales in March 2020, according to the latest Grocery Shopping Survey carried out by Mercatus and Brick Meets Click, e-commerce analytics firms that work with grocery stores.
The ship-to-home segment saw the largest drop in sales, falling over 30% in March compared to a year ago, to $1.4 billion from $2.1 billion. This decline was driven by a 13% reduction in the number of orders placed by monthly active users combined with a 23% drop in the average order value, the survey released this week said.
However, many people still relied on delivery services for their groceries. Delivery sales increased 20% on the year to $3.5 billion in March from $2.9 billion a year earlier. David Bishop, partner at Brick Meets Click, said the “aggressive expansion of third-party providers into grocery” is helping people to shop online.
People still prefer to squeeze their fruit and vegetables before buying. Online grocery will only account for approximately 11% of $1.124 trillion in grocery sales this year, but that number is expected to rise to 20.5% of $1.285 trillion in grocery sales by 2026, a separate report released by Mercatus last year concluded.
Food prices reach all-time high
As the war in the Ukraine rages on, consumers have good reason to find the best prices for food. “Conflict has driven up international prices for wheat, maize and vegetable oils, as war in the Black Sea region spread shocks through the markets trading in these staples,” according to the United Nations food agency.
The Food and Agriculture Organization’s (FAO) food price index, which tracks the monthly changes in the most commonly traded food commodities, averaged 159.3 points in March versus a revised 141.4 for February, a record high. February already marked the highest the index had reached since 1990.
“Driven by soaring wheat and coarse grain prices — largely as a result of the war in Ukraine — the FAO Cereal Price Index was 17.1 per cent higher in March than it was just a month earlier,” the FAO said. For the last three years, Russia and Ukraine accounted for 30% and 20% respectively of global wheat and maize exports.
“Expectations point to the European Union and India increasing wheat exports, while Argentina, India and the United States are likely to ship more maize — partially compensating for the loss of exports from the Black Sea region,” the UN food agency’s report added.
Other major increases included the vegetable oil price index, which rose 23.2%. “Palm, soy and rapeseed oil prices also rose markedly as a result of the higher sunflower seed oil prices and the rising crude oil prices — with soy oil prices further underpinned by concerns over reduced South American exports,” the FAO said.
In-person grocery shopping is less convenient and can result in impulse buys, but the prices on products are cheaper, according to this head-to-head comparison, and there’s no delivery fee and tip for the driver on top of your bill.
See also: Lower-income consumers will start tightening their belts by trading down to private label goods in 2022, analysts say