Why Groceries Are Often More Expensive On Delivery Apps

The pandemic introduced a lot of people to grocery delivery apps. The quarantine era started off with grocery delivery usage more than doubling to $73.7 billion in 2020. Grocery prices have jumped up 29% since February 2020 (via NPR). Regardless, usage of apps like Instacart, Gopuff, and AmazonFresh has increased by 30% in the last year. As this usage has gone up, the cost of delivery has as well. Not only are the obvious extra costs of fees, tips, and miscellaneous charges increasing, but the actual price of some products in the apps is rising. It can lead one to wonder: if there's already a delivery fee, why are the products themselves sometimes more expensive as well? Well, it's complicated.

Take Instacart, for example. The app allows businesses to keep in-store prices or change them. When you scan the page of places to shop from, they may be labeled as having "in-store prices" or "no markups" (depending on your region). Meanwhile, those that change what they charge will say so when you click on the store and then view the "Pricing & Fees" section below its logo in the top left. Instacart takes a percentage of the sale from every spot on the app. So, whether it's higher prices or extra fees, companies need to make that money back. Essentially, buying from Instacart is adding an extra middleman, one whose ability to pick fresh produce can be iffy.

With all these added costs, is getting your groceries delivered worth it? Again, the answer is: it's complicated. For some who are unable to get out of the house due to age, a disability, or illness, food delivery is vital. For those in need, some cities provide cheaper and even free options to get groceries brought to their doorstep.

There are also the people who are too busy to get in the car and head to the market. For them, it comes down to how much their time is worth. If you could be working instead of shopping, there is an opportunity cost that may counteract the price of paying a tech company to hire a person to buy your groceries. It's not just money, though, as time spent finding the ripest avocado and cheapest tortillas may be time that could have been spent bonding with friends and family.

There's also the added benefit of avoiding nonessential spending. Supermarkets have many ways to trick you into spending more money than you planned on. Sending someone else in with a list they have to stick to avoids these extraneous purchases. Regardless, whether delivery is your go-to way of stocking the pantry or you just downloaded Instacart to try it out, make sure you check out our tips for getting your groceries delivered.