Are You Paying Too Little for Your Grocery Delivery?

It is estimated that we spend roughly £136 per household, per year on delivery charges, it may be that we are paying too little. Though shoppers tend to be of the opinion that delivery charges are too high, retailers may actually be footing the majority of the bill, especially when it comes to grocery.

Sainsbury’s for example, currently charge between £2.75 and £6.95 for a grocery delivery, with Tesco similarly charging between £3-6. However according to analysts Shore Capital Stockbrokers, the process of choosing your items, bagging them and delivering them to your door costs closer to £20. They believe that the service is seen as more of a gimmick for retailers rather than a way to make a profit; in order for the service to become profitable, retailers would need to charge closer to £15 per delivery.



Dislikes of online grocery shopping among online grocery shoppers - 2011

With the number of shoppers who are opting for online delivery for their main shop increasing year-on-year (over half or all shoppers now shop online at least occasionally), analysts claim that in-store shoppers are subsidising the retailers loss in revenue by increasing the cost of the food itself.

Of course if this is the case and retailers do increase their delivery changes substantially (which is unlikely in the near future), the retailers that do not increase their delivery charges will likely see an increase in orders with shoppers switching their loyalties. Currently, half on online shoppers cite the cost of delivery as their biggest dislike of online shopping (see graph), and 80% say that free delivery would increase their frequency of use of this channel.

We investigate online shopper loyalty, the barriers to online shopping, and much more in our upcoming report ‘Online Food & Grocery: The Shoppers Perspective 2012’.

Actions Speak Louder Than Words for Lunch On-the-go Shoppers

UK workers work an average of 36.3 hours a week (ONS).  This leaves them time poor when it comes to their lunch break.  As such, consumers need convenient food which fits in around their busy lifestyle, driving the out of home market. Consumers are actively looking for food which they can eat on-the-go and which will keep them fuller for longer whilst they are busy at work.

When considering what factors are important to shoppers when they are choosing their lunch on the go ‘Taste’ and ‘Fill me up’ are ranked as the highest drivers to item choice.  Lunch on the go shoppers ultimately want something they will enjoy but will also fill them up so they won’t snack during the afternoon.

Price as a driver was ranked third with health in final place rated 60 out of 100.  However, these ratings and rankings were recorded directly after a shoppers trip, reflecting their actual behaviour.  When we compare this to shoppers’ opinions and how they think they choose their lunch on-the-go items a different picture appears for health.

Shoppers rated health at 78, almost 20 points above the rating given when recorded immediately after purchase.  This actually places health above price as a driver of item choice for lunch on-the-go.  This shows how there are discrepancies between how shoppers think they act and how they actually act.  Shoppers like to think they are choosing healthy items whereas when they are actually in the time pressured situation health takes a back seat.

It is important to use a range of different research methods to capture these differences between opinions and actions.  Our Smartphone diary method allows for the capture of data immediately after purchase whereas a qualitative survey gives a retrospective account of how a shopper believes they act in a certain situation.  Both are valuable pieces of information which allow for these differences in beliefs and actions to be highlighted.