Giant Food is rolling back delivery fees and order minimums for customers shopping online, announcing that it's removing the fee for orders delivered Tuesday through Thursday and halving them, to $3.95, for orders delivered Friday through Monday.
The Landover, Md.-based grocery chain, which operates 164 stores in three states and Washington, D.C., also is cutting minimum order requirements for delivery to $30 from $60 and nixing them completely for pickup orders. Pickup orders still carry an everyday pickup fee of $2.95.
"We are at the forefront of this growing space and believe lower delivery fees and order minimums will make these convenient services even more accessible to consumers," Giant director of e-commerce Gregg Lorazio said in a news release. To help entice customers to use the services, Giant also is offering a free rotisserie chicken or ready-to-heat pizza with delivery or pickup orders of $30 or more through Dec. 31. The offer can be redeemed up to twice a month.
"Convenience and value are cornerstones of our mission at Giant, and that extends to our e-commerce offerings, especially as consumer demand for delivery and pickup options increases," Dorazio said.
Giant's scaling back of delivery fees comes as grocery retailers continue to tweak their fee formulas in an effort to balance the business-boosting potential of e-commerce with the higher labor costs that come with online order fulfillment. Whole Foods Market last month began charging $9.95 for delivery in select markets; Costco in New Mexico earlier this year began a trial of a $10 fee for curbside pickup, saying at the time that the service "adds an additional expense to our low-cost business model and limited markup structure."
R5 Capital CEO Scott Mushkin told WGB in February that he believes businesses need to charge for the added convenience they're providing customers via online ordering. "You are giving the consumer an additional service; they need to pay for it," he said.
Consumers, meanwhile, may be reluctant to shell out an extra $10 or $15 for delivery (including tip) as they eye rising prices for the groceries they're buying: The pace of price increases slowed a bit in August, according to the Bureau of Labor Statistics' latest Consumer Price Index report, but earlier this summer, 32% of consumers polled by IRI said they believed food prices are much higher than they were pre-pandemic, and 49% said they believe prices are somewhat higher.