It was the best of times, it was the worst of times . . . actually, the COVID-19 pandemic has just been the worst of times.  But it has led to interesting divergences in the US and UK grocery markets.  In today’s Insight Flash, we compare the two, digging deep into relative performance and market share for Instacart in the US and Ocado in the UK, in our first-ever flash leveraging our brand-new UK dataset.  CE Transact UK is comprised of +5M UK-domiciled cards with data attributed to 1,618 public and private merchants, 759 of which are mapped to 227 parent companies across the UK, US, and Rest-of-World.

The early weeks of the pandemic saw a sharp rise in spend growth for Grocers in both the US and UK.  Widespread lockdowns started in mid-March for both countries, and the US saw y/y spend growth at Grocers rise from 2-3% in January and February to 75% the week ending March 15 and 65% the week ending March 22 while the UK saw y/y spend declines in the high single digits in January and February reverse to positive 14% growth the week ending March 15 and 18% growth the week ending March 22.  US Grocers not only saw a higher initial surge than their peers in the UK, but the bump lasted longer as well.  The UK sales growth appeared to have a strong pull-forward component, leading to a -25% drop in sales the week ending 3/29/2020 and y/y declines through mid-June.  Meanwhile, sales growth for Grocers in the US remains in the double-digits even through the week ending 1/10/2021, with 40 out of the last 45 weeks seeing double-digit growth.

Grocers Subindustry

Note: Sales for Grocers reflects the sum of sales for brands in the Grocers subindustry published as part of Daily Signal

Where customers are shopping for groceries on each side of the pond differs even more than how much they are shopping.  Instacart in the US and the Ocado brand in the UK have both seen a boost in market share from shoppers afraid to venture out of their homes during the pandemic.  However, while both started out in a similar position in January and February of 2020 with market share just below 2%, Ocado’s pandemic boost maxed out at 2.2% market share, while Instacart’s operational agility allowed share to rise as high as 8.7% in mid-April.  This Instacart share surge moderated to about 5% until a second round of shutdowns in the US caused a new boost, giving Instacart a market share of 7.0% the week ending 1/10/2021 while Ocado’s boost is only to 2.3%.  (Interestingly, Ocado’s partnership switch from Waitrose to Marks & Spencer didn’t have much impact)

Grocery Delivery Market Share

Note: Sales for Grocers + Grocery Delivery reflects the sum of sales for brands in the Grocers + Grocery Delivery subindustries published as part of Daily Signal

Although Ocado hasn’t seen as much of a sales gain, it may be winning on the efficiency front, which could lead to more profitable operations.  Ocado’s average order size grew by 75% in mid-April versus the first four weeks of the year, while Instacart’s peak in mid-May grew only 21%.    Indeed, Ocado’s average order size over the past eight weeks is 45% higher than the average for the first eight weeks of 2020, while Instacart’s is only 11% higher.

Average Transaction Size