Millennial Money: For Grocery Delivery, Add Fees to the List
NEW YORK (AP) – I haven’t set foot in a grocery store in nearly four months.
With a 10-month-old baby to think about, my husband and I have kept trips to the store to a minimum out of an abundance of caution during the pandemic. We’re fortunate to have just about every grocery delivery service at our disposal — and we’ve taken advantage.
In between orders from Costco, Whole Foods, Imperfect Foods and more, I’ve noticed our virtual shopping habit is changing how we budget. We’re accounting for new grocery-related expenses. We’re also more deliberate about what we buy.
Here’s why online grocery shopping could affect how much you spend — and ways to keep your budget intact.
You could pay more online than in the store for the exact same item. That’s because some delivery services, or the retailers they partner with, inflate grocery prices to cover fulfillment costs.
On Costco’s website, I was met with the message “item prices are marked up higher than your local warehouse. Instacart uses the markup to pay for their delivery service.” The exact price difference wasn’t specified.
Same-day delivery service Shipt says its members can expect to pay about $5 more on a $35 order online than in the store. Plan that you will spend a few extra bucks every time you buy groceries online.
At the grocery store, the price you see is typically the price you pay. But online, fees for delivery, service, alcohol, memberships and subscriptions could be tacked onto your bill. Extra charges could range from a couple dollars for a service fee to about a hundred dollars for a membership.
“You’re spending more money because it’s a service,” says Jennifer Weber, a certified financial planner in Lake Success, New York.
How you use that service can also affect the cost. Often, you’ll pay a premium for quicker or high-demand delivery times. Then, there are tips. Tipping, while optional, is a simple way to support the workers risking their health to provide you with an essential service. Many grocery services set a default tip, so make sure to pick the amount you prefer.
Items could be unexpectedly out-of-stock, incorrect or missing from your delivery. Certain services allow substitutions for unavailable inventory. However, that can come at a higher cost. When the conventional tomatoes I ordered sold out, I ended up with organic tomatoes for $1 more.
When using services that charge for pricier replacements, consider opting out of automatic substitutions or allocating a few extra dollars toward your grocery budget as a cushion. Inspect orders closely upon arrival as well and notify the company if you’re charged for forgotten or incorrect items.
Getting your groceries while sitting in front of your screen isn’t all bad news for your wallet: 46% of consumers say they’ve made fewer impulse purchases since shifting to online grocery shopping in the spring, according to a survey from Magid, a business strategy and research company.
“Careful planning and buying only what you intend to is a little bit easier to do online,” says Steve Caine, a partner with the retail practice of Bain and Company, a management consulting firm. “You don’t get influenced quite the same way as you do when you’re walking through a store.”
With no enticing candy displays or cleverly arranged shelves to stroll past, you might fill your cart with fewer items. Plus, Caine says shopping online allows you to better keep a “running total” of your purchase, while in the store, you usually don’t know until checkout.
WAYS TO WATCH YOUR BUDGET
Online grocery shopping is here to stay for the foreseeable future. These strategies can reduce the strain on your budget.
— MAKE A LIST. Check your fridge or pantry and jot down what you need for the week. “You can think ahead and say, ‘I want to spend $100 or $50.’ Then, you can do price comparisons for those items,” Weber says.
— COMPARE GROCERY SERVICES. Try building a basket on a few different sites to see which offers the lowest price on items. Explore all the costs involved and look for coupons or promotions before checkout.
— BE FLEXIBLE. Choosing curbside pickup can help you skip delivery fees, tips and other charges. But if you opt for delivery, note that one-hour or same-day windows could be more expensive. Giving yourself time to plan and pushing it to next-day or two-day delivery can reduce the cost, Caine says.
By NerdWallet reporter Lauren Schwahn for the Associated Press