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Grocery Delivery Services – How They Work, Cost & Benefits

I’m a member and frequent shopper at my local food co-op, so it feels a bit off-brand to be talking up an entirely different method of purchasing groceries: home grocery delivery services like Instacart, FreshDirect, Amazon Fresh, and store-sponsored options.

But I’m also a realist. I know not everyone has time to visit their local co-op or grocery store and shop for the week. Those living without cars are limited in what they can carry home. And the elderly and those with health conditions may have trouble getting out to the supermarket.

For the busy, the car-free, the infirm, and anyone else without the inclination to visit the supermarket on a regular basis, home grocery delivery is a fast, convenient, affordable solution.

What Are Home Grocery Delivery Services?

A home grocery delivery service is exactly what it sounds like: a means for delivering groceries to consumers, either directly to their homes or to a central pickup location.

Virtually all grocery delivery services allow you to order and pay for your shipments online. Generally, refrigerated trucks, coolers, and freezer bags are used to keep fresh or temperature-sensitive items like produce, meat, dairy, and frozen items cold.

Unless you’re ordering restricted items such as alcohol or tobacco, or you live in an apartment building without a sheltered or private area to leave deliveries, you generally don’t have to be home to accept delivery.

Grocery delivery services are not homogeneous. Each service has its own answer to the question of how to get groceries and household goods to customers quickly, safely, and affordably. Each may also have different costs compared to shopping at a traditional supermarket, though these are subject to change depending on the specific service you’re using, where you live, and what you buy.

What They’re Not

Don’t confuse home grocery delivery services with the logistical networks that transport food and dry goods from suppliers to central warehouses, and then to grocery stores and supermarkets. After all, you can’t just flag down the Safeway semi on the interstate and grab a bag of lettuce off the back. Nor should you confuse home grocery delivery services with meal delivery services like Blue Apron, which curate self-contained meals for customers to prepare at home.


Grocery Store Delivery Services

Many supermarket companies are in the home grocery delivery business. For instance, Safeway, a major grocery chain popular in the western United States, offers online ordering and grocery delivery in many major cities within its trade area. Peapod delivers to major cities in the Northeast and some in the Midwest. Instacart offers delivery from many different grocery chains all across the country. Grocery delivery is available from many smaller supermarket companies, as well. For instance, Price Cutter delivers across a broad swathe of southwestern Missouri, including many small towns.

Grocery store delivery services almost always offer the option to deliver direct to customers’ doorsteps, eliminating the need to visit the store. However, if they don’t deliver in outlying areas, they may also offer the option to pick up in-store. For instance, Price Cutter’s Springfield and Joplin stores collect pickup orders for residents outside the delivery area.

Cost Range

Item prices for grocery store delivery services are usually within the in-store price range in the customer’s geographical area. But since prices and specials often vary from store to store, they’re not always identical. Online-only deals and bonuses may be available, as well. For instance, a limited-time Peapod offer from early 2020 promised new customers $20 off their first online order.

Grocery store delivery services often come with added costs and considerations – namely, delivery fees and minimum purchase requirements. Order minimums typically range from $0 to $60 but can be higher. Delivery fees usually come in under $10 per order with some notable exceptions. Safeway also levies a variable fuel surcharge when gas is above $2.75 per gallon, averaging out to about $0.01 per $0.01-per-gallon increase. Some services also give you the option to tip your shopper, although it’s not required.


Warehouse-Based Grocery Delivery

Warehouse-based grocery delivery services aren’t tied to physical grocery stores or chains. Virtually all deliver direct to your home or place of business, though some may offer warehouse pickup at a reduced or waived fee. Some, such as Amazon Fresh, are owned by massive companies. Others, such as Coborn’s (a Minnesota-based retailer), are smaller and may operate in a single city or region. Some, such as Schwan’s, have been around for decades and may specialize in rural or small-town delivery.

Delivery area is an important consideration when using a warehouse-based grocery delivery service, even if the brand is well-known. For instance, Amazon Fresh rolled out in California and remains concentrated in major East and West Coast cities, such as Seattle, San Francisco, and New York, so it may not be available to residents of other areas. Coborn’s is available to a few million people in a specific area of the Midwest. Schwan’s delivery area includes the entire Lower 48.

Selection is another important consideration. For instance, all Schwan’s items come frozen, so you can’t get fresh fruits and vegetables, though there are plenty of interesting frozen fruit and veggie medleys. The majority of warehouse-based delivery services, however, do deliver fresh produce. Amazon Fresh works with local businesses to bring such varied items as fresh-caught fish, floral arrangements, and prepared restaurant meals to your doorstep.

Cost Range

The cost of warehouse-based grocery delivery can vary widely.

Some services’ prices are similar to grocery stores’. For instance, in a recent search, I found that fresh chicken breast filets cost $5 per pound at Amazon Fresh, $4.99 per pound at Coborn’s, and $5.49 per pound at my local supermarket. Yellow onions were $0.99 per pound at both Amazon Fresh and Coborn’s and $0.89 per pound at my local supermarket.

In other cases, delivery prices may be higher. Schwan’s chicken breast filets cost $6.79 per pound when I checked, for instance – high enough to make me think twice. Bear in mind that prices are subject to change and may vary in your area.

Delivery fees range from $5 on orders of $50 or more for Coborn’s to a flat fee of $9.99 on orders under $50 for Amazon Fresh. Amazon Fresh also carries a $14.99 monthly membership fee that’s separate from the $12.99-per-month Amazon Prime fee. Many services, including Amazon Fresh and Coborn’s, don’t come with minimum order requirements, though some – like Amazon Fresh – charge small-order fees.

Like grocery store delivery services, warehouse-based services may offer discounts and online coupons that aren’t available in-store, especially for new customers. For instance, Schwan’s offers 50% off your first order and a frequent-shopper program that offers decent discounts on future orders. Coborn’s waives shipping costs for the first order.


Community-Supported Agriculture (CSA) Delivery

Community-supported agriculture (CSA) is a great way to support your local agriculture industry. CSAs typically bundle together the products (sometimes just plant, sometimes plant and animal) produced by one farm or a collection of farms for sale in weekly shares during a month or season. Depending on how much you eat, you can usually buy a small, medium, or large share.

You may need to pay upfront, though some CSAs offer payment plans. And unlike other delivery services, you usually can’t pick and choose what you get. The CSA decides what goes into each delivery, based on what’s ready for harvest. Depending on the CSA, you can either arrange door-to-door delivery or pick up your share at a central location – hopefully closer than the farm itself.

Cost Range

CSAs typically charge by the month or season, with prices dependent on share size. Food costs are comparable to organic items found in a supermarket and may be cheaper than those found in a co-op.

Delivery costs vary widely based on the size of the operation, whether it delivers to a central location or customer doorsteps, and its delivery radius. Some don’t charge for delivery as a separate line item, bundling the delivery expenses into the total cost of the share. Others do. Often, it depends on how far the customer or pickup hub is from the farm and how many other customers or hubs can be found in the vicinity.

Grocery Delivery In Box Woman Opening


Advantages of Grocery Delivery Services

These are some of the top selling points of grocery delivery services.

1. Shop on Your Own Schedule and Save Time

As with any type of online shopping, you can build and place your grocery order at your convenience, such as during a 15-minute break at work, after putting the kids to bed, or before your morning jog. However, you typically can’t receive orders late at night, as services tend to deliver during regular business hours only. Also, since many services let you modify or add to your order until the day it ships, if you remember an item you forgot to add to your list, you can update your cart.

By contrast, shopping at a grocery store is a logistical headache. You have to block time out of your day and drive to and from the store. Once there, you have to find parking, walk the aisles, and wait in the checkout line. And if you forget to buy something, you either have to run back to grab it or alter your meal plans.

2. More Convenient for Carless Shoppers

If you live without a car, getting to the grocery store can be a pain. You can haul small orders by hand or in a backpack, but larger orders probably require a taxi or ridesharing or carsharing vehicle with adequate trunk space. Hiring a car just to get your groceries each week is expensive and can be time-consuming. Using a home delivery service eliminates this worry.

3. Potentially Looser Rules for Alcohol Delivery

I live in a state that prohibits alcohol sales in grocery stores, so I was surprised to learn that grocery delivery companies sell beer and wine here. When I’m trying to pair wine with planned meals or simply want to avoid an extra trip to the liquor store for a single six-pack, this is super-convenient. Check the laws in your state, though – some may be more restrictive about how and when alcohol can be shipped.

Pro tip: If your grocery store doesn’t deliver alcohol, you can look into the Drizly app. Drizly is available in over 100 markets across the United States and offers $5 off your first delivery.

4. May Limit Impulse Purchases

Though impulse buying is often cited as a major ill of online shopping, that may not be the case with grocery delivery services. Traditional grocery stores are carefully designed to maximize temptation, with complimentary items next to one another and high-margin, often unnecessary goodies (such as candy, soda, and trashy magazines) at the checkout counter to tempt customers in line.

Delivery services’ online ordering platforms are arranged logically and cleverly, with sales and specials prominently displayed. There’s no temptation to grab a magazine or bag of potato chips and dig in while you wait in the checkout line. And since there’s a delay between when you place and receive your order, you’re less likely to add unnecessary items simply because you’re hungry. That adds up to good news for your grocery budget.

5. Useful If You’re Temporarily Out of Commission

If you’re recovering from a major injury or serious illness, aren’t able to venture out on a shopping trip, and can’t call on anyone to help out, a grocery delivery service could be just what the doctor ordered.

6. May Come With Sign-Up Promotions

Some grocery delivery services offer attractive deals for new or first-time shoppers. For instance, Safeway waives the delivery fee on your first order. When I signed up for Coborn’s, it waived the first delivery fee and threw in a voucher book for 5% to 10% off my next four orders. Schwan’s offers new customers a whopping 50% off.

7. May Offer Customized or Saved Shopping Lists

Many warehouse- and store-based grocery delivery services let you save your shopping list from previous orders or create a customized template. Coborn’s brags that its regular shoppers complete their orders in five minutes, on average, using these tools.


Disadvantages of Grocery Delivery Services

These potential drawbacks could give you pause.

1. Temperature-Control May Be a Factor

It’s hard to imagine a world without refrigeration. Without it, much of the food selection we take for granted at the modern grocery store – meat, dairy, frozen foods, even fresh produce – wouldn’t be available much of the time. Grocery delivery services’ trucks and vans are generally refrigerated or at least equipped with industrial coolers to keep sensitive items below ambient temperature.

However, the delivery process still presents challenges, even in fully refrigerated trucks. What do you do with items that really shouldn’t be refrigerated, such as red wine? Should you freeze all meat, knowing that some customers may want to cook their steaks or chicken on the day of delivery? What if the refrigeration system fails temporarily?

Some smaller delivery services, particularly CSAs that drop off at central locations, may not have suitable equipment for keeping food at the right temperature. Our CSA, for instance, puts fresh produce in a box and leaves it in a shaded outdoor area at a nursery. On hot days, I have to pick it up as soon as it’s ready if I don’t want wilted lettuce.

App-based grocery delivery services, such as Postmates and Instacart, can be nearly as unreliable when it comes to refrigeration. Postmates provides each new driver with an insulated hot/cold bag, but large grocery orders typically don’t fit in a single bag. Each additional bag costs $6. Instacart expects its drivers to provide their own cold storage, such as coolers or insulated bags. If your driver has inadequate insulated storage capacity, your frozen or refrigerated items might not remain at a safe temperature until reaching your doorstep.

2. You May Have to Be Present to Take Delivery

Many grocery delivery services are happy to drop your order on your back stoop or porch, especially if your residence has a separate entrance (in other words, it isn’t an apartment building with a secure door leading to an interior hallway).

However, if your service sells restricted items, such as beer or wine, you may have to be present to take delivery. Since many deliveries come during the workday, that can be inconvenient if you have a 9-to-5 job or simply don’t want to wait around at home to sign for your groceries.

3. Browsing Is Harder

Some grocery delivery companies don’t let you browse and view images of stocked items online. Even CSAs that don’t let you choose what you get typically have a website where you can view the coming week’s delivery.

However, that’s not the same as being able to slowly walk the aisles in a traditional grocery store, studying the labels of unfamiliar items or comparing prices, sizes, and key physical characteristics at a glance. Your knowledge of the food you eat – and possibly the variety – may suffer as a result.

4. You May Have to Pay Delivery Fees

These services generally charge a delivery fee, which can vary based on the company and the amount you order. Larger orders sometimes have lower fees. It may come out as a wash if you consider the cost of getting to the grocery store, such as gas or transit fare, but it’s still a line item your regular grocery bill doesn’t have.

5. You Can’t Use Your Own Bags

It sounds nitpicky, but I like using my own, reusable carrying bags and produce bags at the grocery store for two reasons. First, it’s better for the environment. Both plastic and paper bags require lots of energy to produce, and despite the proliferation of recycling programs around the country, many still end up in landfills or on roadsides.

Second, it reduces clutter. Our house has an ever-expanding “bag bag,” a heavy-duty plastic bag that hangs from a closet doorknob and holds a multiplying assortment of plastic grocery and produce bags that we desperately (and futilely) try to find new uses for. Using canvas bags to carry heavy items and cloth sacks to store produce reduces this clutter.

6. Possible Minimum Purchase Requirements

Many grocery delivery services impose minimum purchase requirements. Accordingly, you may need to plan and shop for multiple days or meals at a time. These minimums could be particularly troublesome for people who live alone and don’t need to order as much at a time.

7. Choice May Be Limited in Some Areas

Some geographical areas, particularly those outside major cities, may not be served by popular grocery delivery services such as Peapod, Amazon Fresh, and Safeway. The upshot is that these areas may have equal or better access to local CSAs. If you live in a rural part of the country, you may still have to drive a long way to a traditional supermarket or look for a delivery service that operates in rural areas, such as Schwan’s.


Final Word

My wife and I are fortunate enough to live close to a big-name grocery store and well-stocked cooperative, but we don’t jump out of our seats at the thought of heading to either. If you feel like you have better things to do than walk the aisles in pursuit of tomorrow’s dinner, you may find grocery delivery to be irresistibly convenient.

Then again, there’s something to be said for old-fashioned grocery shopping and all that it entails, such as the pleasures of discovering a new fruit and the peace of mind that comes with being able to turn over a jar or pouch in your hand. The best approach to shopping might just be an “all of the above” strategy: a weekly trip to the cooperative, supplementary big-box runs for hard-to-find items, and grocery delivery for staples and last-minute remembrances.

Have you ever used a grocery delivery service? Would you recommend it?

Brian Martucci
Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

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