Economic headwinds are forcing Americans to make tradeoffs in their purchasing behavior, trading down or deal-seeking in certain categories – like staples and apparel – in order to maintain higher spending levels on things they value the most, including travel and entertainment. This trend is evident among lower-income Americans more than others, particularly in the grocery category, where recent reductions in SNAP benefits not only impacted household bottom lines but reduced the benefits of shopping in-store.
CivicScience has tracked Amazon.com grocery spending since 2016, which serves as a strong indicator of overall online grocery shopping.
Since December of 2022, the percentage of lower-income Americans who spent at least $50 on groceries via Amazon has increased dramatically. Conversely, higher-income adults reduced their online grocery shopping on Amazon during that same period. As shown in the data below, the share of U.S. adults earning under $35K who spent at least $50 monthly on groceries from Amazon.com increased nearly six percentage points in recent months (from 20.8% to 26.5% from December to February) – with a similarly sharp increase for those earning under $50K (23.8% to 27% over the same window).
Additional CivicScience data reflect that U.S. adults earning under $50K annually were nearly twice as likely as those earning over $50K to report shopping more for groceries online in the past three months than they typically do at this time of year (40% compared to 22%). These online grocery shoppers also tend to skew under age 35.
In the case of a site like Amazon, which sees high gift card volume over the holidays, extra cash to use on essentials might play a role in these shifts. Separate CivicScience data looked at several different reasons that may have contributed to an increase in online grocery shopping among $50K and under earners. Among these online grocery shoppers who claimed they were impacted by one or more reasons, 13% said that gift cards have contributed to their buying grocery products online within the last three months.
Lower-income Americans also face a major disruption to SNAP (Supplemental Nutrition Assistance Program) benefits, after the expanded pandemic payments expired in every state when February turned to March – which has coincided with skyrocketing prices on select household staples, like eggs. Per the aforementioned CivicScience data, 16% of the online grocery shoppers earning less than $50K claimed recent changes to SNAP (EBT) benefits were a motivator in buying on the web.
But among all American online grocery shoppers earning less than $50K, convenience far-and-away leads the pack in motivators (48%), with just over one-quarter (27%) of this subset claiming they were feeling too sick or unwell to personally shop in-store. Although gift cards and SNAP changes round out the lower end of reasons to grocery shop online – just behind finding better prices online – they combine for nearly 3-in-10 of online grocery shoppers in this income range and might account for substantial enough movement as displayed in the Amazon grocery spend over the past two months.
So which kinds of grocery products do lower-income Americans prefer to purchase online? A majority have bought either snack and dessert products (52%) or canned/preserved foods and bread/rice/cereal (48% respectively), with beverages (45%) not far behind. Organic food and alcoholic beverages are the least likely to be ordered online by this income bracket.
Although online grocery shopping might seem on its face like a higher-cost convenience alternative to driving to the store, many lower-income shoppers have leaned on it in recent months – in the wake of holiday gift card season, changes to expanded SNAP benefits, and surging prices for household essentials.
CivicScience will continue to track the dynamics of online grocery shopping for Americans of all income brackets. Interested in where your consumers’ habits land? Get in touch.