Apparently the true cost of your supermarket home delivery is often nearer the £15 to £20 mark, according to an article in yesterday’s (where else?!) Daily Mail. (Delivery Fee For Online Groceries May Hit £15).
Internet shoppers are being ‘subsidised’ by everyone else.
Having palpitations at the £6.99 delivery fee from some supermarkets for peak time deliveries, I am currently using Ocado and have signed up to a savings pass offer – 6 months’ free delivery and £6.99 per month thereafter.
Open All Hours – The Joys of Shopping on t’Internet
I must confess to a slight frisson of “Primrose Hill and Chelsea-ness” whenever I complete my order online at Ocado and feel like I should be wearing high heels and have a pair of large designer sunglasses perched on my head whilst clicking. (Incidentally, why do some women insist on wearing sunglasses on their head all the time – indoors?).
But shall we have a tiny reality check here?
Have you noticed what many of the online supermarkets do? Ocado in particular has come up with the genius of an idea of suggestion page after page of items at checkout you might have forgotten, have ordered before, or might fancy if you’re premenstrual. I have just been offered a lovely bunch of sunflowers (£8) and a fruity Chardonnay (£7). A couple of clicks and, bang, £15 could have just been added. I suspect that many people end up spending at least 10% to 15% of their shopping budget each time. Unless you’re a demon with the trolley, I’m sure you don’t bomb round Morrisons doing your own version of Supermarket Sweep and chucking in anything that takes your fancy.
There are a raft of packaged online deals and on the Sainsburys site, a recipe page where you can click through the recipe text to put the ingredients straight in your trolley. Actually I have a particular fondness for Sainsburys current championing of family values with the emphasis on dads.
Oh, and then there’s all that lovely DATA. One of the main strengths of the loyalty card, e.g. Tesco Clubcard, is that it tells Tesco precisely what you spend, when, how much and on what. This data allows them to forecast sales, peaks and troughs in sales and to see what’s selling with what. They know which stores are the most profitable – hence the development of Metros, Expresses and Superstores to fulfil the needs of the local population.
And guess what – online shopping does exactly the same at a much lower cost.
Yes, there are the costs to the business of employing drivers and running vans. There are the costs of employing staff to pick and pack but these are not management level salaries and, given the vast profits, supermarkets make, I find it hard to believe that these costs are not easily absorbed elsewhere.
There’s no doubt that the out of town superstore seems to be killing high street business. Equally, it’s pretty obvious that small scale producers are being squeezed out of the market by the huge buying power of the supermarkets – no matter how many ‘green’ themed commercials they come out with or how many quality marks / standards or stickers they use.
But I don’t think we’ll be seeing the death of the physical shop for a long time. For a start much work needs to be done on UK broadband provision. There is an assumption that most homes have internet access but this is probably false. Further, there are sections of the population who are resisting the internet with full force. How many Silver Surfers are there really?
An even greater issue is the distrust many have about spending money via the internet, their banking security and identity theft.
If supermarkets try to raise the cost of home delivery I think many will just get back in their cars and go to an actual store. To use the Ocado savings pass, for example, there is a minimum spend of £40. One box of Pampers nappies and you’re nearly half way there but for many this amount is, I’d suggest, too high.
Christmas is approaching; many businesses make a substantial part of their annual profit at this time of year and, frankly, the supermarkets need to keep us sweet. We won’t be bought off by Clubcard vouchers or discounts if the basics of price and product are wrong. We do want to feel valued and needed which is something that John Lewis understands very well. Look at its current ad focusing on values – with not a product mentioned.
It’s going to be an interesting festive period for the supermarkets.