Sat. Mar 2nd, 2024

How much does food delivery cost in Canada? I’ve read that in the U.S. the premium for convenience is about 25%.

“In terms of costs, it’s hard to put a percentage like that for groceries. It really depends on the size of the order. If you’re looking at a 55-item order, it’s not 25%; it’s probably more like 10% or even less [based on a standard delivery fee]. 

“If you look at Instacart, for example, you’re looking at a $5 to $7 premium, depending on where you live. So it’s not that bad. And with some services, it doesn’t matter if you order five items or 50 items, it’s basically the same fee. In Halifax, for example, the fee is $6 no matter what. And the food is delivered to you within two hours basically.” (In Toronto, Instacart has a $3.99 fee for same-day delivery for orders over $35.)

“People want their food delivered to their home, and so people are willing to pay a fee. They’re even willing to pay for a membership. So, if they were to slap on a 25% increase, that is food inflation—25% is a lot of money to pay for food delivery.”

What grocery and food delivery services do you like?

“Instacart is very convenient—I’ve tried them all. With Instacart, they really do make an effort to get you in the store virtually. Basically you put your order in, and then maybe 10 minutes later, you get a text from your Instacart shopper: ‘I’m your Instacart shopper, I’m shopping right now for your food.’ They tell you that you’ve ordered bananas, they’re out of bananas, and these are the options to substitute. At the beginning of the pandemic, the accuracy rate was awful. I mean, they were just substituting without consent. And now they are really well organized. 

“And there’s also the Sobeys model with Voilà, where it’s integrated, owned and operated by Sobeys. But Instacart is an app. It’s subcontracting delivery, for Loblaws, Walmart and Costco. You get a car, bringing you your groceries. There’s no uniform or anything. It’s not as sophisticated as Sobeys, for example, with the fleet and branding.”

The effect of inflation on groceries and gas

While the pandemic has moved more and more Canadians to try delivery, the recent news of inflation rate spikes has hit the food apps where it hurts: groceries and gas. So how is that playing out with the cost of food and grocery delivery? 

The prices of these services are rising accordingly. So you will see a difference in prices from the past year, if you compare apples to apples, and cans of tuna to cans of tuna, and so on. 

As for gas, “Some food delivery apps are now adding a fuel surcharge, at least temporarily, to keep drivers in the network,” says Charlebois, which has helped keep drivers driving, he adds. “We are expecting fuel costs to impact food prices overall, unless fuel prices drop. Since March 8, when President Biden announced it would ban Russian oil imports, markets are much calmer.” (Read more about what happened with the markets that week.)

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By admin