How much does food delivery in Canada cost? I’ve read that in the US the premium for convenience is about 25%.

“In terms of costs, it is difficult to give such a percentage for groceries. It really depends on the size of the order. If you look at an order of 55 items, that’s not 25%; it’s probably more like 10% or even less [based on a standard delivery fee]†

“For example, if you look at Instacart, you’ll see a $5 to $7 premium depending on where you live. So it’s not that bad. And with some services, it doesn’t matter if you order five or 50 items, it’s basically the same rate. In Halifax, for example, the fee is $6 no matter what. And the food is basically delivered to you within two hours.” (In Toronto, Instacart has a $3.99 same-day delivery fee for orders over $35.)

“People want their food delivered to their homes, so people are willing to pay a fee. They are even willing to pay for a membership. So if they were to make a 25% increase, that would be food inflation – 25% is a lot of money to pay for food delivery.

What groceries and delivery services do you like?

“Instacart is very useful – I’ve tried them all. With Instacart, they really go out of their way to get you into the store virtually. Basically you place your order and maybe 10 minutes later you get a text from your Instacart shopper saying ‘I’m your Instacart shopper, I’m shopping for your food now.’ They tell you that you have ordered bananas, that they are out of bananas, and these are the options to replace. At the beginning of the pandemic, the accuracy was terrible. I mean, they just bartered without permission. And now they are really well organized.

“And there’s also the Sobeys model with Voilà, where it’s integrated into, owned and operated by Sobeys. But Instacart is an app. It is subcontracted delivery, for Loblaws, Walmart and Costco. You get a car that brings you groceries. There’s no uniform or anything. It is not as sophisticated as Sobeys, for example, with the fleet and the branding.”

The effect of inflation on groceries and gasoline

As the pandemic has pushed more and more Canadians to try delivery, recent news of inflation spikes has hit food apps where it hurts: groceries and gasoline. So how does that factor into the cost of food and grocery delivery?

The prices of these services increase accordingly. So you see a price difference compared to last year, if you compare apples to apples, and cans of tuna to cans of tuna, and so on.

As for gasoline, “Some food delivery apps are now adding a fuel surcharge, at least temporarily, to keep drivers on the grid,” said Charlebois, who has helped keep drivers driving, he adds. “We expect fuel costs to affect food prices in general unless fuel prices fall. Since March 8, when President Biden announced a ban on Russian oil imports, markets have become much calmer.” (Read more about what happened to the markets that week.)

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