Dive Brief:
- Giant Food has stopped charging a fee for grocery pickup, joining other food retailers that already offer the popular e-commerce service to customers at no extra cost, the East Coast supermarket chain announced in a press release Monday.
- The change builds on Giant Food's decision last year to eliminate minimum order requirements for its pickup service and lower charges for delivery orders.
- Grocery chains have been looking to make their online services more attractive to customers as the pandemic-driven surge in e-commerce demand decelerates.
Dive Insight:
The move by Giant Food to take away the $2.95 fee it had been adding to pickup orders follows the retailer's announcement in September that it would no longer require shoppers to spend at least $30 to qualify for the service.
Free pickup is currently available at 159 Giant Food locations, and orders are available within four hours of when they are placed, according to the announcement.
When it eliminated the minimum order requirement for pickup last year, Giant also stopped charging a fee for delivery orders placed on Tuesday, Wednesday and Thursday, when order volume can be slower. In addition, The Ahold Delhaize-owned chain, which runs 164 supermarkets in Maryland, Virginia, Delaware and Washington, D.C., halved the delivery fee for orders placed from Friday to Monday to $3.95 and shaved the minimum order size for delivery from $60 to $30.
The Giant Company, another grocery chain in Ahold Delhaize's U.S. portfolio, ceased charging a fee for pickup or requiring pickup orders to meet a minimum threshold in February. Walmart also does not charge a fee or require a minimum order size for grocery pickup, while Kroger offers pickup service for free on orders of at least $35.
Ahold Delhaize has broadened its delivery services even as it takes steps to make pickup less expensive for shoppers. In December, the Dutch retailer announced it had begun offering 30-minute convenience delivery across all of its banners in the United States in partnership with Instacart.
In November, Ahold Delhaize executives said they expected net online sales in the United States and Europe to double by 2025, adding they are looking to e-commerce services to play a leading role in helping the company increase its revenue base between 2023 and 2025.
Pickup has emerged as a favorite channel for food shoppers, and has been growing even as overall grocery e-commerce volume has slowed in recent months. Pickup sales for the grocery industry in the United States rose 2% in January compared with the same period last year, to about $4 billion, and accounted for 47% of online volume, according to data released by Brick Meets Click and Mercatus. Total online grocery sales declined 8% during the month, to $8.5 billion.
