Grocery delivery saw tremendous growth during the first year of the pandemic.
- Karen Raschke, a retired attorney in New York, started getting her groceries delivered early in the pandemic. Each delivery cost $30 in fees and tips, but it was worth it to avoid the store.
That’s causing some turmoil in the industry. Buyk filed for bankruptcy in March; Jokr pulled out of the U.S. in June. Instacart — the U.S. market leader in grocery delivery — slashed its own valuation by 40% to $24 billion in March ahead of a potential IPO. Kroger said its digital sales — which include pickup and delivery — dropped 6% in the first quarter of this year.
DoorDash also offers delivery from Target, but it charges more for each item on its website. The cart rings up at $39.90 from DoorDash, which then adds $12.18 in taxes and delivery fees. If the consumer adds a $10 tip, that totals $62.08. But earlier this summer, as gas prices approached $7 and a box of strawberries neared $9, she got serious about cutting costs.
But cost isn’t the only reason some consumers are moving away from delivery. Cloutier says many customers are wary of the quality of items selected by workers.
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Demand for grocery delivery cools as food costs riseKaren Raschke, a retired attorney in New York, started getting her groceries delivered early in the pandemic. Each delivery cost $30 in fees and tips, but it was worth it to avoid the store. Then earlier this spring, Raschke learned her rent was increasing by $617 per month.
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Demand for grocery delivery cools as food costs riseU.S. demand for grocery delivery is cooling as food prices rise.
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