Walmart accounted for a whopping 36% of all US grocery e-commerce sales in the second quarter of 2023, up more than 5 percentage points from the prior year and its highest share to date.

That’s among the highlights of a new report, Measuring the Online Grocery Market: eGrocery Share in the U.S., created by Barrington, Ill.-based consultancy Brick Meets Click and sponsored by Mercatus.

The report also found that click-and-collect increased its share of total grocery ecommerce, rising to 48% in the quarter, two points higher than last year.

“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 is also still holding its own in grocery e-commerce, with moderate growth over the last two years. The retailers finished the second quarter with approximately 7% of eGrocery sales. Strong and consistent execution — especially in fulfilling click-and-collect orders — and a price gap that’s halfway between supermarkets and Walmart likely offered a degree of defense for its online grocery business, Bishop said.

Total grocery e-commerce sales were down 1.1% in the 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.

In addition, consumer interest in buying groceries online declined slightly except for the most engaged households.

“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, president and CEO of Mercatus. “In addition, grocers can expand the online market they serve by offering Pickup as a lower-cost alternative to Delivery.”

This article is an excerpt from the October 2023 issue of Supermarket Perimeter. You can read the entire E-commerce feature and more in the digital edition here.