Delivery takes center stage as Pickup loses steam—Walmart’s expansion puts pressure on smaller grocers to control the customer experience.
Delivery pulled the weight in May, masking deeper cracks in Pickup and pushing Walmart’s online dominance into overdrive.
Online grocery sales didn’t crash—because Delivery carried the team
Let’s not sugarcoat it—May’s online grocery sales dropped 12% month over month, falling below the $9.5B streak we’ve been riding since last August.
But here’s the kicker:
We still hit $8.7 billion, up from $6.8B in May 2024. That’s a +27% year-over-year spike, and the reason is simple: Delivery is cooking.
This isn’t just “more shoppers.” This is a full-stack growth machine:
- Delivery’s MAUs tripled YoY growth vs. the overall base
- Average order value (AOV) is up
- Order frequency? Also up
- Sales? A monstrous +70%, jumping from $2.2B to $3.9B
- It now accounts for 45.4% of all online grocery sales
The catch: Pickup’s slide shows cracks in the model
Let’s talk about the elephant in the grocery aisle: Pickup is slipping.
- Sales dropped to $3.2B in May (down 3.6% YoY)
- Order frequency is down
- AOV is down
- And even though MAUs grew, they’re not converting like they used to
Pickup used to be the margin-friendly darling for grocers. First-party control, lower delivery overhead, and solid loyalty potential. But now? It’s losing share—down 11 points YoY to 37.2% of sales.
Why it matters: Walmart is eating your lunch
If you’re a regional grocer, this is your wake-up call.
Walmart’s online grocery base grew 1.5x faster than the national average across all methods. And now they’re expanding delivery to 12 million more households, thanks to backend tech upgrades.
That’s not market share. That’s market dominance in motion. And guess what? They’re not just riding Instacart’s rails—they’re building their own.
So while Delivery’s growth looks like a rising tide, it’s mostly Walmart’s boat lifting.
Operator POV: Own the experience—or get owned
Here’s where the rubber meets the road.
“Collaborating with delivery platforms is often essential for grocers, but the key is to ensure that these partnerships strengthen — not weaken — their connection with the customer.”
– Mark Fairhurst, CMO @ Mercatus
Translation: Don’t hand the keys to DoorDash and pray. If you’re not:
- Owning your first-party digital UX
- Building trust with personalized offers
- Using Pickup as a loyalty moat
Yes, delivery is up. But if your customers don’t know it’s your experience? You’re just a SKU with a logo on someone else’s app.
So what?
May wasn’t a disaster—but it was a message.
🧨 Delivery is the growth channel now
📉 Pickup needs a UX overhaul
🏪 Walmart isn’t competing. They’re conquering
The Delivery boom is real. But unless you’re turning that volume into loyalty—and keeping the experience close to the chest—you’re just an anonymous vendor in someone else’s checkout flow.
It’s time to get serious about customer ownership, or Delivery’s gains will just mean Amazon and Walmart win faster.
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