Woolworths cuts delivery costs in online shopping war with Coles

The space is worth billions to the supermarket giants and Woolworths has overhauled its offer to entice more customers in.

Woolworths is looking to muscle in on a bigger share of the booming online shopping scene as it slashed the amount shoppers need to spend to get free delivery by half.

The supermarket giant announced it would provide free deliveries on all orders of $50 and over for customers that are signed up to its subscription service.

It also includes shorter same-day delivery options as part of the minimum spend.

For all other online customers, the fee for online delivery is up to $15.

Woolworths’ move is part of a strategy to try and retain customers who turned to online shopping during lockdowns.

It has cut its annual subscription called Delivery Unlimited, which offers free delivery across the year, reducing the cost by 30 per cent to $119. This equates to less than $10 a month for the subscription.

Woolworths new online customer fulfilment centre in Lidcombe. Picture: Dallas Kilponen/Woolworths

First launched in 2019, Delivery Unlimited also covers the cost of reusable or paper bags.

Woolworths general manager for e-commerce, Alistair Venn said demand for online grocery shopping continues to grow and the needs of customers are changing.

“More and more customers are looking for greater flexibility and shorter delivery lead times to place orders more often,” he noted.

“Same day delivery is quickly becoming the expectation from our customers and we’re proud to offer more same-day delivery windows than any food retailer in Australia.”

Woolworths overhaul of its delivery options would suit frequent online shoppers who are looking to save on delivery costs – whether it be a large family shop to stock up or a midweek top-up, the supermarket giant added.

For shoppers who live to chase points, Everyday Rewards members can also use the subscription to boost their balance.

An annual subscriber to Delivery Unlimited who places an order between $100-$149 each week would stand to save at least $560 each year on delivery fees and reusable bags, while collecting up to 15,600 points which are worth almost $80.

A Woolworths workers packs a delivery. Picture: Supplied

Woolworths is now offering a 30-day free trial of the subscription service.

Meanwhile, Coles offers free delivery on orders for $250 or more, although it said delivery costs as little as $2 from Tuesday through to Thursday.

“We know that our customers love the convenience of Coles Online and we are seeing increased demand for Click & Collect, with a minimum spend of $50,” a Coles spokeswoman said.

“We want to help our customers shop more easily anytime, anywhere, anyhow, and we continue to see significant growth in demand for online grocery shopping and we are investing in customer experience and capacity, which is having a positive impact on customer satisfaction.”

Woolworths recorded $3.5 billion of e-commerce sales in financial year 2020/21, up almost 75 per cent year-on-year, while Coles e-commerce sales grew 52 per cent to $2 billion during the same period.