The last mile: Which grocer is best at bringing dinner to your front door?

WCPO tests delivery from five big grocery rivals
Posted at 5:31 AM, Nov 05, 2018
and last updated 2018-11-06 00:49:30-05

CINCINNATI -- Rachel Burwinkel has two good reasons for buying home-delivered groceries. They are her children.

“Go into a store with a 2-year-old and a 3-year-old? No, no, no, no,” said Burwinkel, a hair stylist from Loveland.

Burwinkel got a membership to the Shipt home delivery service as a gift last Mother’s Day. She has used Shipt or Amazon at least once a week since then.

“There have been some weeks where I’ve ordered three or four times,” she said. “I’ve ordered twice in one day several times.”

That behavior puts Burwinkel way ahead of the curve compared to the rest of the country.

Wolfe Research analyst Scott Mushkin said home delivery accounts for less than half a percent of all grocery sales at this point. Most online shoppers, which represent less than 3 percent of the nearly $1 trillion industry, prefer to pick up their goods in the store.

“It’s unclear who’s going to win delivery or even how big delivery is going to be,” Mushkin said. “Right now, it’s very niche.”

But it's a rapidly developing niche. In July, 2016, when WCPO last evaluated grocery delivery services, the market was dominated by small companies. Amazon was the only big player offering same-day delivery in Cincinnati.

RELATED: Delivery concepts starting small, growing fast

But now all of the industry's titans are investing heavily to solve that "last mile" problem of getting groceries from the store to your door. Target spent $550 million to acquire Shipt last December. Kroger just finalized a deal with the British online grocer Ocado to build up to 20 robot-powered warehouses that will distribute online orders in multiple cities. One expert told WCPO in June that these Customer Fulfillment Centres, as Ocado calls them, could require an investment of more than $1 billion.

In other words, retailers are betting big that more of us will be like Burwinkel in the coming years.

So, WCPO decided to revisit the state of the market by ordering the same 15 items from Cincinnati’s five main grocery rivals: Kroger, Walmart, Amazon, Meijer and Target.

The order consisted of products to make a hamburger meal with dessert, along with paper goods to serve it up and detergent to clean up afterward. The orders required companies to pull products from all parts of a traditional grocery store, including produce, deli, meat, dairy, frozen foods and even those non-food center aisles.

We created new accounts on iPhone apps downloaded in the days before the competition began. We placed all five orders within 20 minutes of each other, starting at 9:01 a.m. on Friday, Oct. 26. Then we compared the five rivals in four categories: Speed, pricing, fees and service.

Here are the bare bones results: Amazon had the fastest delivery. Kroger and Walmart had the lowest prices. Target had some service issues. And Meijer ranked in the middle of the pack in every category.

But that doesn’t tell you everything you need to know about buying groceries for home delivery. In fact, as much as these companies say they want to help simplify your life, their services seemed fairly complicated for a tech-challenged, first-time user like myself.

The competition begins

At Amazon, for example, I mistakenly split my 15 items into two orders and and opted for a one-hour delivery window. Those mistakes negated my chance to get free delivery pledged to Prime members with a $35 minimum order. Amazon charged $50.82 for the 15 items but the order came from two locations: The Prime Now warehouse in Winton Hills and Whole Foods in Norwood. We paid two delivery fees totaling $14.98. Both orders arrived quickly; 91 minutes for Whole Foods and one hour, 45 minutes for Prime Now.

Kroger was next to arrive with an order placed at 9:05 a.m. and delivered at 11:15 a.m. The Kroger Delivery app, powered by Instacart, provided five updates on the order’s progress. It notified us when an Instacart shopper arrived at the Newport Pavilion Marketplace store, finished shopping, checked out and left the store for delivery. Kroger normally charges $11.95 for this service but it was free for our first-time delivery. Kroger had the lowest combined price on the 15 items, excluding fees, tips and taxes. Its $34.90 tab was 11 percent cheaper than Walmart and more than 30 percent less than Target and Amazon.

Five minutes after Kroger, Meijer arrived at WCPO with an order filled by Shipt and containing a few surprises. Meijer promotes free delivery on orders larger than $35, but the fine print on its website reveals a surcharge on home-delivered goods.

“Our members can expect to pay about $5 more using Meijer Home Deliver than they would on a $35 order purchased in store themselves.”

Romaine lettuce from Meijer

Meijer also required a $99 Shipt membership, which is charged automatically to your credit card after a free two-week trial. The order was accurate and delivered in less than two and a half hours but it contained some unpleasant surprises. A bag of grapes, estimated to cost $2.39 at checkout, ended up costing $5.39. In addition, Meijer’s romaine lettuce was a little black around the edges.

Message from Shipt shopper

Target had even more surprises with its order, filled at the Newport Pavilion store and delivered by Shipt. Two hours and 36 minutes after placing the order, our Shipt shopper texted to say the store was out of Market Pantry 93 percent lean ground beef and Ball Park hamburger buns. I responded that any other buns and ground beef above 90 percent would be acceptable. But the final order included no buns and ground beef that was 85 percent lean. There were also no potato chips, but that was probably my mistake. I thought I ordered them but they were not listed on the receipt or in the purchase history section of the Target app.

Walmart was the only company to immediately spot yet another mistake I made during my 19-minute ordering frenzy: I gave all five competitors the wrong address. WCPO is located at 1720 Gilbert Ave., at the corner of Gilbert and Elsinore. When I typed 1720 Elsinore, Walmart’s app wouldn’t accept the order. So I had it shipped to my home address instead. The other four companies adjusted to my mistake on the fly, proving adept at customer service via text messages and phone calls.

As for the delivery itself, Walmart was last to arrive, four hours and 39 minutes after the order was placed. The wrong address wasn’t a factor because I placed a second order in my shopping cart around mid-morning and the fastest delivery time offered was four hours. Walmart also substituted merchandise for out-of-stock items, including a pre-packaged bag of Dole’s romaine lettuce hearts instead of the fresh produce I ordered. Finally, Walmart charged less than expected for delivery. It promotes a flat fee of $9.95 with a $30 minimum order, but its website explains the fee can vary by time slot. WCPO paid $7.95 for the delivery.

Here’s a footnote on pricing: We used general search terms that let each company’s app steer us to the best value. Store brands, which tend to have lower prices, were chosen about 25 percent of the time. Even when a name brand was chosen, they often came in different sizes. So, we compared unit pricing, including cost per ounce. In that analysis, Walmart was the low-price leader, followed by Kroger, Target, Amazon then Meijer.

How to game the system

So, that’s how home grocery delivery works for the neophyte. But seasoned veterans like Rachel Burwinkel have learned a few tricks to squeeze extra value from the service.

For one thing, Burwinkel advises prospective customers to look for sales on Shipt membership, which is required for Meijer and Target orders. Her family paid half price when they purchased her one-year membership in May.

Burwinkel also figured out a way to get repeat deliveries from the same Shipt shopper, who knows her preferences on substitutions and is pleasant to work with.

“She sees my address and she snatches it,” Burwinkel said. "She’s like, ‘You’re really easy. I know what you like and don’t like and you’re really easy to work with.’ And I always tip.”

Finally, when shopping through services that require an annual membership, like Shipt or Amazon Prime, Burwinkel will not click to complete an order unless delivery is free.

“I’d rather you nickel and dime me than actually give me a delivery fee,” she said.

If you’re eager to avoid delivery fees, Lauren Schultz has some options.

"Brands (sometimes) sponsor a click and collect order or a Shipt delivery,” said Schultz, a senior analyst for the digital marketing agency VML. “Shoppers can sometimes access those deals through a digital coupon or a specific promotion."

Another alternative is to bite the bullet on a $99 Shipt membership, which provides free delivery for Meijer and Target orders over $35. Then, there is the $119 Prime membership, which offers lots of perks beyond free grocery delivery.

VML Managing Director Jacquelyn Baker said research suggests it takes shoppers at least three tries before they’re comfortable enough to be hooked on digital grocery shopping. To ease the transition, she recommends taking your time on your first visit to the virtual store.

"Spend a large amount of time the first time building out a very detailed grocery list,” she said. “Every time you do it after that it can be super fast and quick because you can build you future list off of your previous purchases."

One final point: Online grocery shopping is a rapidly evolving marketplace, so these results will not be the last word on the matter.

Kroger, for example, is experimenting with driverless cars and robot-powered warehouses to close the gap against Amazon’s speed and efficiency. Walmart is rapidly expanding home delivery to 100 cities with services that reach 40 percent of U.S. households by the end of this year. And Amazon is working to end that “Whole Paycheck” reputation for the natural and organic grocery chain it acquired in 2017.

“We’ve seen Amazon take down prices significantly at Whole Foods over the last 18 months,” said the Wall Street analyst Scott Mushkin. “In our opinion, Amazon is probably the guy to beat.”