Grocery Run named favourite online grocer

TIME-POOR Aussies are increasingly turning to online grocers for their shopping needs — but high delivery costs are still the biggest turn-off.

Online grocery stores are slowly taking off.

ONLINE retailer GroceryRun has scored top marks for customer satisfaction, beating out Coles and Woolworths, according to market research firm Canstar.

The online grocer, which charges a flat delivery fee of $9.99, scored five stars for overall satisfaction, despite its customers being most likely to name delivery costs as their greatest frustration.

Coles and Woolworths scored four stars for overall satisfaction in the survey of 1500 shoppers, while Aussie Farmers Direct scored three stars. Thirty-two per cent of GroceryRun customers griped about fees, compared with 27 per cent of both Coles and Woolworths customers, and just 12 per cent of Aussie Farmers Direct customers.

Coles charges delivery fees of between $4 and $14 for most metro areas, but consumers can get free delivery if they choose an eight-hour window and spend more than $150. Woolworths charges between $3 to $11, and only offers free delivery for purchases of more than $300.

Aussie Farmers Direct charges a flat fee of $2 for orders under $25, with free delivery for anything over.

GroceryRun, an offshoot of online retail company Catch of the Day, specialises in pantry, long-expiry food items, toiletries and cleaning products. The company had previously reported a surge in sales as shoppers sought out products the major supermarkets had dropped in favour of home brands.

Earlier this month, the competition watchdog raised concerns about the way Aldi, Coles and Woolworths treat suppliers when dumping products from their shelves, saying some suppliers were given less than a day’s notice.

“Consumers tend to remember the specific product bargains for longer than they remember delivery costs,” said Canstar spokesman Simon Downes. “Overall GroceryRun are deemed to offer the best value for money, but it’s certainly important to watch out for the delivery costs because they might just negate your product savings.”

The online grocery market in Australia has been slow to take off, accounting for just $3 billion of Australia’s $90 billion grocery market, according to market research firm IBISWorld, which projects annualised growth of 12.9 per cent over the five years to 2021-22 to $4.9 billion.

Woolworths has 42.8 per cent market share, followed by Wesfarmers with 36.6 per cent. Aussie Farmers Direct and Grocery Run each have less than 5 per cent share, according to IBISWorld.

“Despite the initial reluctance of Australian consumers to shop for groceries online, demand has started to pick up over the past five years,” said IBISWorld analyst Lauren Magner.

“Online grocery retailers are increasingly targeting time-poor, tech-savvy consumers who appreciate the convenience of being able to order at any time for direct delivery.”

But while it is relatively easy to order groceries online, “it is not as simple to receive these products”, she said.

“Due the perishable nature of some of the industry’s products, refrigeration and timely delivery is important. Consumers are often deterred by expensive delivery costs and the sometimes inconvenient pick-up or delivery options offered by industry players.”

Canstar’s survey found just one in five shoppers currently buy all of their groceries online, but 40 per cent said they expect to do all of their grocery shopping online in the future.

Survey respondents ranked the convenience of having groceries delivered as the biggest driver for shopping online at 38 per cent, followed by not having time to visit a supermarket (25 per cent), while 7 per cent said they “just don’t enjoy” visiting physical supermarkets. Sixteen per cent said it was because they believed shopping online works out cheaper overall.

On average, respondents spent $123.51 on their most recent online shop, including delivery costs, compared with $133.78 for shoppers who went to a physical store.

“This seems to add weight to the theory that shopping online allows you to focus on what you really need, rather than being distracted by in-store promotions,” Canstar said.

“Indeed, 58 per cent of survey respondents said they tend to spend less when buying online, instead of in-store. The amount Aussies spend grocery shopping online has decreased from 12 months ago when the average amount was $129.81.”

Woolworths customers spent the most online at an average of $131.99, followed by Coles shoppers with $128.67. Aussie Farmers Direct shoppers spent $91.21, and Grocery Run shoppers spent just $87.30 on average.

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