Despite higher prices, grocery delivery services ringing up new ...

Tag : peapods

With high gas prices squeezing profits, grocery home deliverycompanies such as Peapod and Roche Bros. have taken steps to cutcosts.
But despite fewer free promotional deliveries offered by RocheBros. and the addition of a temporary fuel surcharge by Peapod,consumer orders continue to rise.
Elana Margolis, spokeswoman for Peapod, Quincy, Mass.-based Stop& Shop’s home delivery service, said Peapod’sdelivery fee – $9.95 for a minimum order of $60, and $6.95for orders over $100 – is not enough to cover thecompany’s transportation costs, so it instituted a temporaryfuel surcharge in late 2007.
“We waited a really long time to do it,” she said ofthe surcharge, “and only did it after the price of gas hadstayed up for so long.”
The variable fuel surcharge is tied directly to the retail price ofgasoline in the New England, Central Atlantic and Chicago regions– areas served by the company. It is recalculated weekly.This past week’s surcharge was $1.38.
Margolis said the added fuel surcharge doesn’t seem to havehurt business, and Peapod’s order volume is up 20 percent sofar over this time last year.
To help offset the increase, Margolis said Peapod offers customers$1 off the delivery fee if they opt for a larger delivery-timewindow – a three- to four-hour window, instead of a two-hourwindow. This helps the company maximize the use of its trucks andplug customers’ orders into a truck that is nearly full.Peapod also offers customers $1 off the fee if they pay for theirorder by online check.
Wellesley, Mass.-based Roche Bros. has not instituted a fuelsurcharge, but has taken other steps to cut back on delivery costs.
“We had a lot of promotional codes for free deliveries outthere,” said Arthur Ackles, marketing director for Roche.“We backed off on those.”
Ackles said Roche’s delivery order volume is up 10 percentover last year. Customers are also placing larger orders, he said.
Ackles said Roche’s $9.95 delivery fee, with no minimumorder, is sufficient to cover the company’s transportationcosts, and it has no plans to institute a fuel surcharge at thistime.
“We are hoping not to if gas stays where it is,” hesaid. “If it got much higher than $4 a gallon we would haveto consider it.”
Mike Berger, editor at Duxbury, Mass.-based Griffin Report of FoodMarketing, said despite the economy and added costs charged byretailers, more consumers are opting for services like Roche Bros.and Peapod for convenience.
Kelly Croke of Braintree, Mass., is one of those customers. She hasbeen using Peapod to shop for her family of five for a little overa year. With a weekly grocery bill that often tops $200, and a tripto the grocery store taking up to two hours of her time, theservice saves her both time and money, she said.
“Nowadays, to hunt the bargains and go from store to store,it’s not fuel-efficient,” she said.
With Peapod, she orders just what she needs, cutting down onimpulse buying, as well as wear and tear on her vehicle.
“For me to have to take three kids to a grocery store,it’s not fun,” she said, “and as much as you tryto be firm, it’s all impulse buying.”
With Peapod, Croke said she can stay home with her children, dolaundry, vacuum and clean her house and have her groceriesdelivered at the same time.
And when she forgets to put something on her Peapod list and goesout to the store, the trip isn’t always a simple one.
“Last week, I had to go to three stores to get razorblades,” she said. “How fuel efficient is that? If Ihad just ordered them online I would have saved myself time andaggravation.”
The Patriot Ledger