As a savvy shopper and retail industry insider, I know that convenience often comes at a premium. And that‘s certainly the case with grocery delivery. While it‘s a huge timesaver to have your weekly provisions brought right to your door, it‘s important to understand what you‘re really paying for that service.
I took a deep dive into the world of Kroger grocery delivery to break down all the costs and help you decide when it‘s worth it to click "deliver" instead of making the trip to the store yourself. Let‘s crunch the numbers!
Kroger Delivery Fees, Explained
Kroger offers two ways to get your groceries delivered: directly through Kroger‘s website or app, or via the Instacart platform. With Kroger delivery, you‘ll pay a fee of $9.95 to $11.95 per order, as long as you meet the $35 minimum. This flat fee applies whether you‘re ordering $40 worth of groceries or $400.
Some examples of how that plays out:
- $50 grocery order + $9.95 delivery fee = 20% premium
- $100 grocery order + $11.95 delivery fee = 12% premium
- $150 grocery order + $11.95 delivery fee = 8% premium
So the more you order, the lower the delivery fee is as a percentage of your total. Ordering just over the $35 minimum means the fee makes up nearly 30% of your bill!
On top of the base fee, some markets have a $0.50 fuel surcharge to help cover variable transportation costs. And of course, while not required, it‘s proper etiquette to tip your delivery driver 10-20%.
If you use Kroger delivery a lot, you can pay $79/year or $9.99/month for free delivery on $35+ orders with their Delivery Unlimited plan. Doing the math, you‘d need to receive at least 7 deliveries per year (about every other month) to break even on the annual subscription.
How Kroger Stacks Up to the Competition
Kroger‘s delivery fees are on the higher end compared to some of its biggest competitors. Here‘s how they compare for a $35 order before tips and other fees:
| Store | Delivery Fee |
|---|---|
| Walmart Grocery | $7.95-$9.95 |
| Amazon Fresh | Free for Prime members |
| Target Shipt | $9.99 for non-members |
| Albertsons | $9.95, free for $30/year |
| Kroger | $9.95-$11.95 |
Keep in mind that the other variables like price markups, subscription costs, and availability differ too. Amazon Fresh is widely available for free 2-hour delivery over $35 for Prime members (otherwise $14.99/month). Walmart can be cheaper than Kroger on many items but has a more limited selection. Target owns Shipt which has a $99/year membership for free delivery. And Albertsons‘ unlimited delivery subscription is much cheaper than Kroger‘s.
Instacart Pricing for Kroger Orders
If you opt to order Kroger groceries for delivery via Instacart, the cost structure is a bit different. Instacart has a sliding scale for delivery fees based on order size and a la carte fees like:
- $3.99 delivery for $35+
- $7.99 delivery for under $35
- 5% service fee
- $0.40 per item over 50 lbs
- 1.9% credit card fee
On top of that, Instacart marks up Kroger‘s in-store prices by an average of 12% to cover their costs as a middleman. So the exact same grocery order can cost over 25% more through Instacart than if you ordered directly through Kroger or shopped in-store yourself.
The Big Picture on Grocery Delivery
Even with the added costs, it‘s clear that grocery delivery has been taking off. Industry reports show that:
- Online grocery sales grew 54% in 2020 to reach $96B
- 60% of US consumers now buy groceries online, up from just 36% in 2018
- 52% of online grocery orders included delivery, while 48% were pickup
- Average online grocery spend per household doubled from $2,089/year to $4,178/year since COVID
- Delivery and pickup will account for 20% of the $1T grocery market by 2025
Kroger has been investing heavily to keep pace and position delivery as a growth engine. Some key moves:
- Partnered with UK-based Ocado to build high-tech robotic fulfillment centers for delivery
- Acquired meal kit company Home Chef in 2018 for $200M to boost delivery business
- Integrated grocery delivery into their fuel rewards program for extra savings
- Launched ghost kitchens for on-demand meal delivery in some markets
- Experimenting with autonomous vehicles and drones for faster, cheaper delivery
All these initiatives show that Kroger is betting big on delivery, even though it puts pressure on their margins to pay for it all. Grocery is a notoriously low-margin business, often just 1-3% profit. Adding extra labor and transportation costs makes it even tighter.
"We continue to be excited about the momentum we‘re seeing in grocery delivery and pickup," said Kroger CEO Rodney McMullen. "It‘s a key part of our model to serve customers in a variety of ways and be wherever they choose to engage with us."
To Deliver or Not to Deliver?
So when you‘re deciding whether to use grocery delivery, how can you tell if the cost is justified? As your personal grocery guru, here‘s my advice:
Think about what your time and energy are worth. If a couple hours spent planning, shopping, and putting away groceries would blow up your schedule or wear you out, paying $10-30 for delivery could be a bargain. Especially if you have a demanding job, family responsibilities, health issues, or lack transportation.
On the flip side, if you live super close to the store, enjoy browsing the aisles, and find it an easy errand to knock out, you might rather save the cash. Picking orders up yourself is also usually cheaper than delivery if you want a middle ground.
Crunch your own numbers to see the impact. Take your last grocery receipt and add 10-25% to the total. If you can afford that and feel it‘s fair to free up your time and effort, go for it. If it‘s too much of a stretch, try cutting back on delivery frequency or being more selective about when you use it.
Use delivery as a special treat. Maybe grocery delivery isn‘t in the budget for your everyday essentials or big weekly stock-up trips. But having a few staples brought to you when you‘re sick, slammed at work, or dying for Ben & Jerry‘s can feel like a lifesaver. Keeping it occasional makes it more affordable and appreciated.
The Bottom Line
I believe that, like any convenience, grocery delivery is worth it when the benefits outweigh the costs for your specific situation. It‘s not an all-or-nothing choice. With some comparison shopping and strategic splurges, you can take advantage of delivery when you need it most.
And luckily, as online grocery shopping becomes the norm, competition should bring down prices and fees over time. Kroger and others are pouring investment into optimizing the process to be more cost-effective. From cheaper labor models to leaner supply chains to smarter inventory management, grocers have lots of incentives to make delivery as efficient as possible.
"We continue to learn and evolve our model to find the right balance of service, selection, experience and value," said Kroger‘s McMullen. "Our goal is to be the most affordable, most accessible grocery delivery service for the most people over time."
So whether you‘re a fan of grocery delivery all the time, some of the time, or none of the time, I‘m confident that Kroger and other retailers will keep innovating to expand your shopping choices. The customer demand is clear, so it‘s just a matter of cracking the code on how to do delivery fast, fresh, and frugally. Until then, I‘ll keep sharing my insider insights to help you shop smarter.
