I notice when I use a delivery service for food or groceries, the price I pay through them is not the same price as in store/restaurant. So a $4 burger at McD will cost me $5 through DoorDash/Uber/x, so who gets the extra dollar? Merchant or delivery service? I mean I’m already paying delivery fee plus tip, so I should be getting in-place price. Does anybody know?
Door Dash. It’s how they make money.
Edit: From what I can tell, the restaurant pays a delivery charge and commission (to door dash), hence the higher price. DoorDash (and the others) tried to force the restaurants to have the same prices in the restaurant, I presume, to hide that. There’s is/was a lawsuit over that.
Due to my current mobility issues I have all my groceries delivered. I’ve noticed that I don’t always get offered things at the sales prices that are listed in the store’s weekly flyer, or get the Thursday senior discount that I would get in the store. Although there are occasional discounts of the “$6 off if you spend $30” on selected items. This is with Instacart, where I have premium account which reduces my delivery charges.
Look at what it would actually cost to make a delivery: money for the delivery driver, money for his vehicle expenses, money for running the delivery system. And note the time used so he is probably only delivering one or two orders an hour (between waiting between orders, waiting at the pickup window, driving to you, driving back). So the system needs $20 plus in money for each delivery–but few are willing to pay this directly. So instead it gets split up between commissions from the restaurant, marking up prices, a small delivery fee and tips for the driver.
as an example–if I went to Ruler in person, a 3lb log of hamburger costs $13.97, but delivery same item it costs $20.97!!
I’m in England and I use deliveries for both my weekly grocery shop and an occasional curry.
I pay a stated delivery charge, but the items themselves are the same price as if I went shopping.
There isn’t a set answer to this… it depends on the particular delivery service you’re using, the store you’re ordering from, whether you have a membership with the delivery service, etc. Each combination can have different prices.
Some places charge the same AND don’t charge a delivery fee. Then the delivery service adds their own fees, along with taking a cut from the store’s prices, and sometimes part of the driver’s tip too (at least until they were sued over it).
Some stores don’t want to eat all that margin and so raise their online prices too.
It really just depends.
I raised this issue a couple of years ago in this thread. I previously used Instacart for grocery delivery, mostly from Safeway. But since I discovered Instacart’s practice of marking up prices, I’ve stopped using Instacart and just shop directly on the Safeway web site. As far as I can tell, they don’t mark up over in-store prices, and with a FreshPass membership, delivery is free. FreshPass costs $99/year, but gives you a $5/month credit, so if you use it every month it’s really $39/year, which is totally worth it. All you pay above going to the store and shopping yourself is the driver tip.
Someone is paying and if you are shopping monthly or more and paying $39/year it’s not you (directly). It’s not possible to pick out a basket of groceries and deliver it for $3.25.
Possibly the cost of this service is built into their prices generally. Or they are making enough out of people who sign up to FreshPass and don’t use it to cover the people who do. Or it’s a loss leader in some other way.
The likelihood is you are paying indirectly somehow.
FWIW, some places like walmart and kroger supposedly offer the same delivery prices vs in store prices when you order directly through their websites. That’s my understanding (however you still have a delivery fee and drivers tip). However if you order at these stores through instacart, the prices are higher.
I mentioned that I get my groceries delivered (here in the UK.) It’s by Tesco (a huge chain) and they charge me £5.00 (about $6.60) for delivery. (The groceries come at store price.)
Obviously they have loads of daily deliveries and a fleet of vans, so they have some economies if scale…
The UK minimum wage is £12.71 although I believe there are shady practices that can get below that. At £5 per delivery that’s 23 minutes of waged effort to complete an order. The only info I could find suggested a grocery delivery rate of 2-4 per hour. Even allowing 4 per hour that leaves about 8.5 minutes of waged effort to pick out and otherwise complete the logistics of an order. And that’s before you get to the overhead of running the online system (in respect of which there would be very large economies of scale).
I think part of the cost Is getting built into the overall cost of groceries at Tesco, or they are running it as a loss leader.
I’ve seen the Safeway shoppers in the store. They are obviously shopping multiple orders at once, going off a computer-generated list on a tablet. The list is undoubtedly optimized to require just one pass through the store, picking up the required items for all the orders, in the order that they are sitting on the shelves. If they shop 5 or 10 orders in basically the time needed to walk through each store aisle once, I can easily imagine that the average time per order is pretty small. And then the delivery time is partially amortized when they deliver all those orders in one trip in the same vehicle. A delivery order must certainly produce less profit than the exact same order purchased by an in-store shopper, but factoring in delivery purchases from people who wouldn’t bother to drive to the store to make the purchase, I can see that it’s overall a money maker.
I just did this today. I found out that Harris Teeter has their own delivery program, HT Plus, which has the same annual cost ($99) but allows me to buy things at the weekly advertised sale prices. Also if I shop on Thursdays (as I did today) I get the 5% Senior Discount. As a bonus, it also includes access to Disney/Hulu/ESPN streaming!
There’s also the benefit of customer retention. Seems unlikely that someone would buy into multiple $99/year delivery deals, so you are basically giving reliable repeat customers a good deal and are less likely to lose them to the store down the block.
Plus there’s some corporate goodwill generated by providing a service to the less mobile population without the DoorDash-level price gouging.
Ever since the pandemic, I have been paying $100/year for the service of having them prepare my online order. This covers delivery to the store parking lot. For an additional $3.50, they will deliver it to my apartment. I usually do the latter. Other than that, I get the usual prices including the weekly specials. It is well worth the price and I pay it gladly. Add a $5. tip and it is still worth it.
Looking at wages along can be misleading.
The cost of employing someone is usually quite a bit more. On-costs need to add in the admin, insurance, employee facilities and so on. Delivery adds the costs of a vehicle and all its attendant costs. Which for commercial use will entail another layer of coverage.
The counterpoint must include savings on the in-store facilities and support for physical shoppers. Reduced checkouts, reduced load on mandated facilities like toilets, safety, and parking. Parking might be a big win. Any given physical shop can support more customers.
In my usual supermarket I see staff going around filling orders in the evenings, and they could probably do a lot of order filling for next day delivery during shelf restocking when the store is closed. So again minimising pressure on facilities. Staff doing this work usually seem to be young and probably students getting at bit of part time work.
My supermarket also provides a pre-order and pickup service. Which splits the difference.
Prices are identical.