How much should a grocery store charge for delivery ?
Apr 29, 2025
Grocery Delivery Fees: How Much to Charge?
Determining the right price for delivery is important for a grocery store, whether it is a neighborhood grocery or a large banner. It is not simply about choosing a random number or imitating competitors, but about deeply understanding one’s own costs, target market, and local consumption habits. The price you apply must not only cover your expenses but also remain attractive to your customers. It’s a balance between profitability and competitiveness.
In this article, we explore in detail how to calculate a fair and sustainable price, what the most commonly used models in the industry are, and how to adjust your fees based on your geographical area, growth strategy, and even the average size of your baskets. You will also find an example based on a local grocery store. Whether you offer delivery with your own employees or through an external provider, this article will help you make an informed and tailored decision to your reality.
Takeaway
The average delivery fee for groceries in Quebec is between $4.99 and $13.99.
Before setting a rate, you need to calculate your actual costs: labor, fuel, packaging, software, management time, etc.
There are three common models: flat rate, distance-based rate, or unlimited subscription.
Offering free delivery over a minimum amount can stimulate sales without undermining your profitability.
A concrete example is provided to guide you in setting your price.
Why Properly Setting Your Delivery Fees is Essential
Delivery is now a service expected by consumers, especially since the pandemic. However, it represents a real cost for grocery stores. Poor calculation can impact your profit margin or hinder sales. If it's too expensive, the customer abandons their cart. If it's too low, you subsidize each order. A well-thought-out rate not only covers your costs but also supports the growth of your online service.
It is therefore essential to adopt a methodical approach based on your internal data, rather than what the competition is doing or what you believe customers are willing to pay.
How to Calculate Your Delivery Fees: The Concrete Method
Step 1: Identify Your Direct and Indirect Costs per Order
Cost Item | Details | Example |
|---|---|---|
Labor (30 min) | Time spent by an employee to prepare the order (gathering items, checking, packaging) and/or make the delivery | $8 (based on $16/h) |
Fuel and Transport | Expenses related to the vehicle: gas, wear and tear, insurance, maintenance, or mileage costs if you reimburse an employee. | $3.00 |
Packaging | Bags, boxes, dry ice, or other materials needed to protect and transport products, especially for fresh or frozen items. | $0.99 |
Management / Customer Service | Time or personnel needed to respond to calls, emails, requests related to delivery (changes, delays, cancellations, etc.). | $0.50 |
Software Fees / Subscriptions | Subscriptions to digital tools (management software, e-commerce platform, delivery planning tool, CRM, etc.). | $0.50 (high estimate) |
Estimated Total per Delivery | $12.99 |
The highest cost is labor, so ideally, you should consolidate orders to lower this cost.
💡 Tip: use an Excel or Google Sheets file to test different scenarios based on distance, order weight, and estimated delivery time.
Step 2: Add Your Target Profit Margin
Add between 10% and 20% of margin or a fixed amount (e.g. $1.50) based on your profitability strategy.
Calculated Cost: $12.99
Desired Margin: $1.50
Suggested Fee: $14.49 per order
This allows you to maintain your margin even with cost variations (gas, time, etc.).
Popular Pricing Models for Grocery Stores
Concrete Example: Local Grocery Store in Montreal
Situation: neighborhood grocery delivering within a radius of 5 to 10 km
Average cost per order: $12.99
Added profit margin: $1.50
Displayed Delivery Fee: $14.49
Free delivery for orders over $125
$2 surcharge for remote areas (10 km)
This hybrid model is simple for customers to understand and allows the grocery store to maintain control over its margins. Conditional free delivery encourages higher-value orders.
The amount for free delivery will depend on your margins.
How to Adjust Your Fees Over Time
Once your starting fees are set, you need to review them regularly. Here are some indicators to watch:
Does your margin per delivered order remain stable or decline?
Does the cart abandonment rate increase when delivery is added?
Are your customers asking for more flexibility (time slots, days)?
Have you received feedback on pricing or delivery speed?
Idea: offer a post-purchase survey to better understand your customers' expectations.
Adjusting your fees once or twice a year may be sufficient, but paying attention to the market will help you avoid losses or decreases in satisfaction.
Examples of Major Brands in Canada
Chain | Fees | Business Model |
|---|---|---|
Metro | $3.99 to $6.99 + preparation fees of $3 to $4. Subscription option available | Fixed rate or subscription |
Provigo / PC | $5.99 to $13.99 | Varies based on priority |
Walmart | $7.97 to $13.97 | Varies based on priority |
These figures can serve as a reference but must be adjusted according to your cost structure and local clientele.
Using an External Delivery Service: A Flexible Alternative
If you do not wish to manage delivery logistics internally, you can rely on external partners such as Uber Direct, Eva, Go Livro. These solutions provide a turnkey service without hiring delivery drivers or managing routes. You can refer to our article Top 10 Delivery Companies for more details.
Conclusion: Find Your Balance Between Profitability and Attractiveness
Setting the right delivery fees is not about copying others: it's about understanding your actual costs, your service areas, your human and technical resources, and of course your target customers. By following a structured method, you will be able to offer a competitive service that inspires trust and retains your customers.
And if you use an e-commerce platform for groceries like OneTrip, you can automate the application of your fees based on zone, time, or cart size. It's a time-saving, accurate, and improved customer experience. Want to know more? Book a quick call now.