The cost and benefits of grocery delivery services
Grocery home delivery has its place, but it does come at a cost. Personal circumstances dictate whether ordering groceries in makes financial sense, and there are a few strategies that can offset the delivery fee.
The Facts
- Ordering groceries online encourages meal planning
- Delivery saves one step for busy people and can free up more time for meal prep
- It’s helpful when driving to a store is not an option
- Delivery services can delay the move to assistant living
- Fees and service vary greatly between providers
Grocery delivery has become very popular. There are clear advantages to this service. It frees up time which may make it easier to fit batch-cooking and meal prep into a busy schedule. In Toronto for example, grocery shopping can take up the better part of a Saturday, given traffic congestion and trouble finding a parking space. For anybody who can’t drive to a store, this might be a cost-effective way to get groceries. And for anybody who is house-bound, having reliable access to groceries might delay the move to assisted living.
The question is whether this service takes too much of a bite out of a household’s food budget. Or could it actually help save money? The convenience of ordering in definitely comes at a price. Delivery fees, service fees, store-price markups, and tips quickly add up, but in most places, consumers can choose between several providers.
- Supermarket delivery services are generally cheapest, in part because the delivery price of an item is usually the same as the in-store price. Major chains also offer subscriptions that will quickly pay for themselves with regular use.
- Third-party platforms may mark up item prices by 10% to 30% compared to in-store prices, and their fees often exceed those of the grocery chains.
Major survey data shows broad reliance on apps like Uber Eats (used by over 50% of Canadians annually) and DoorDash for quick convenience and household essentials. With these services being among the more expensive delivery options, there is room for saving money by switching to grocery-store delivery instead.
Keeping costs low: A few strategies can rein in the cost of grocery delivery. Ordering less often and from a limited number of stores, avoiding small orders, and possibly paying for subscriptions to one or two delivery platforms can make a significant difference overall.
Actually saving money: Having groceries delivered has a definite potential for lowering money spent on groceries overall. Not driving to the store means not putting gas in the car. Building the very detailed shopping list a delivery service requires may lead to more concise spending. Meal planning and shopping from a list are cheaper than ‘winging it’, and delivery personnel won’t add impulse purchases to the cart.
The elimination of impulse purchases might already more than offset the price of delivery. Just don’t build the shopping list on an empty stomach! And if money is tight, don’t order from third-party platforms that heavily mark up the in-store price of groceries before applying their fees to the order total.
Supermarket delivery services:
- Walmart operates a nationwide delivery network with flexible time slots and standard, express, and same-day options. The yearly Walmart+ subscription eliminates delivery fees on most orders.
- PC Express provides online ordering and scheduled delivery from Loblaw-affiliated stores in most major Canadian cities. The PC Express Pass eliminates fees, but certain restrictions apply.
- Voilà by Sobeys provides delivery services in select regions and offers a subscription.
- Save-On-Foods operates its own direct delivery service with time-slot selection. They charge a standard delivery fee per timeslot but don’t offer a subscription.
Third-party delivery apps:
- Uber Eats delivers groceries from local supermarkets like Walmart, Loblaws, and Costco with real-time tracking. Base delivery fees fluctuate depending on distance and driver availability, though qualifying orders are free for Uber One members.
- Instacart partners with local chains like Sobeys, Safeway, FreshCo, and Walmart for same-day delivery. There is a 10% markup on item prices and a higher service fee for orders that contain alcohol.
- DoorDash offers grocery and convenience items, including partnerships with stores like Save-On-Foods. Delivery fees are dynamic, based on location. There is a 15% - 30% markup on item prices, because DoorDash charges both customers and stores a fee for its services.
- Skip The Dishes features a groceries section in its app for ordering household essentials and food items. There is a 20% - 30% markup on item prices compared to in-store prices
- Buggy, formerly known as Inabuggy, delivers custom grocery orders from major stores in as little as an hour. It charges high fees but does not mark up in-store prices. If an order includes multiple stops, additional fees are added for each stop.