The Hidden Costs of Grocery Delivery Apps in Australia

The Price of Convenience: Grocery Delivery Apps Under Scrutiny

In today’s fast-paced world, the allure of convenience often comes at a price, and recent findings by Choice highlight just how steep that price can be for Australian consumers. According to their research, groceries ordered through rapid delivery platforms such as Uber Eats, DoorDash, and Milkrun can be as much as 39% more expensive than purchasing the same items in-store.

Comparison of Grocery Prices

Choice conducted a thorough price comparison of 13 common grocery items, including staples like pasta, milk, and fresh vegetables. They analyzed prices from major supermarkets—Coles, Woolworths, and Aldi—and compared them with their listings on third-party delivery apps. The results were striking:

• On average, products cost 11% more when ordered through third-party apps.
• Delivery fees ranged from $5 to $11, significantly increasing the overall cost of groceries.
• At Aldi, seven out of the 13 items were more expensive on DoorDash than in-store.
• Milkrun charged higher prices for 11 out of the 13 items sourced from Woolworths.

Mark Serrels, the editorial director at Choice, emphasized that while not every item is marked up, “the majority of them are.” He expressed concern over the pricing strategies employed by these delivery services, stating, “There shouldn’t be a mark-up for the goods; there should be a mark-up for the delivery itself.”

Uber Eats: The Costliest Option

Choice's investigation revealed that Uber Eats emerged as the most expensive option among delivery platforms. When factoring in delivery fees, a shopping basket from Woolworths would cost on average 39% more than an equivalent purchase made in-store, while a basket from Coles would see a price increase of 35%. The base product costs were also higher, with an increase of 12% noted.

In response to these findings, a spokesperson from Uber stated, “Restaurants partner with Uber Eats in a variety of ways. Each merchant selects the model that suits their needs and sets their own pricing on the platform, taking into account factors like ingredient costs and supply chain pressures. This flexibility ensures they can run their business on their terms.”

Coles Responds to Price Discrepancies

Coles also commented on the situation, noting, “Like most merchants, including retailers and restaurants, products sold through third-party delivery platforms such as Uber Eats and DoorDash are often priced higher compared to shopping directly.” They justified these prices as a means to provide instant delivery options for customers in need.

The spokesperson further mentioned that shopping directly through Coles’ online platform, which offers delivery and click-and-collect services, allows customers to access the same prices as in-store. Choice’s research corroborated this, revealing that buying directly from Coles was cheaper, even after considering a $15 delivery fee.

A Call for Clarity in Pricing

Serrels described the situation surrounding delivery app pricing as resembling “the Spider-Man meme,” where all parties seem to be pointing fingers at one another. He suggested that the various stakeholders need to collaborate to address the pricing disparities, emphasizing the necessity for a resolution that focuses on consumer interests: “That’s fine for them to defend themselves in this situation, but at Choice, we want an outcome for the consumer, end of story.”

Consumer Choices and the Future of Grocery Delivery

As the convenience of grocery delivery apps continues to grow, so too does the scrutiny surrounding their pricing practices. With major players like Woolworths and Coles stepping into the delivery space, it’s crucial for consumers to remain informed about the potential costs associated with these services.

In conclusion, while the appeal of having groceries delivered to your door may be undeniable, the financial implications are significant. Consumers are encouraged to consider their options carefully and weigh the costs of convenience against their budgets. With rising prices on delivery apps, it may often be more economical to shop directly in-store or through supermarket websites.