Modern technology has made it easier than ever to have your groceries brought to you without getting up off your couch. Big names such as Uber Eats, Postmates, and DoorDash have started offering grocery pickup and delivery in recent years, joining Instacart in the grocery delivery market that boomed for both customers and people looking to make extra money delivering food during the pandemic. But what does convenience really cost consumers, and how can shoppers save money on grocery deliveries?
While these companies all offer the same convenient service, how much they charge for it differs. To determine whichapps offer the best and worst value to customers, our FinanceBuzz research team tested major grocery delivery apps to compare food markups, delivery and service fees, and taxes across major delivery carriers.
Key Findings
- Regardless of which app customers use, getting groceries delivered will cost at least 24% more than picking them up in person.
- Postmates and DoorDash have the highest markups on grocery trips. Customers can expect at least a 33% premium compared to shopping in person.
- Although paying more for convenience on grocery delivery apps is unavoidable, we saw the lowest markups on orders placed through Instacart and Uber Eats.
What we did
To understand grocery delivery service markups, we placed an order of 21 common grocery items worth around $100 at a national grocery chain. We then placed that exact same order from the exact same store location via Instacart, Uber Eats, Postmates, and DoorDash. All orders were placed for local delivery to the same location.
For each order, we collected data on how much the groceries themselves cost on each app, how much each app charges in delivery and service fees, as well as how much tax each app charges. We then compared this data to our control order directly from the grocery store.
Comparing grocery delivery markups
No matter which app customers prefer, it will always cost more to have your food delivered to your door than to pick up groceries in-store yourself. The convenience of having someone else do your shopping and bring it to you understandably comes with a price. As we found, however, that price can be higher or lower depending on which app people choose to use.
At all four grocery delivery apps we examined, markups on the food itself cost at least $14 more on our $101 order vs. shopping in-store, while delivery and service fees tack on at least $9 on top of that.
With all that in mind, Instacart and Uber Eats were the most affordable apps for grocery delivery, adding 24% and 25% to the bill, respectively. Postmates and DoorDash had the highest markups, adding at least 33% to their users’ receipts.
As a note, these costs only cover unavoidable costs that each app charges customers. Each app encourages users to tip their shoppers/delivery drivers, including providing a recommended tip amount for each order. As tipping is completely optional, however, we did not include that as an additional cost, though it’s a practice we always encourage.
With between a 24-34% markup on groceries (before leaving a tip), it’s clear that convenience comes at a cost, but that doesn’t mean it needs to break your budget. For instance, using grocery credit cards can earn you cash back or rewards for your grocery spending (including on some delivery apps), and using cash back apps can help you save money on everyday purchases, including at the grocery store.
Which services offer the most affordable grocery delivery?
1. Instacart
Instacart has traditionally focused on grocery pickup and delivery, something the company has done since it was founded in 2012. That makes it both a specialist and a trailblazer in the grocery delivery space. In our experiment, they also had the smallest upcharge of any app, with a 24% markup.
- Grocery costs: $114.59
- Delivery Fee: $2.99
- Service Fee: $6.74
- Tax: $1.05
- Total Cost: $125.37
- Markup: 24%
2. Uber Eats
Despite the fact that they do not specialize in groceries the way that Instacart does, Uber Eats very nearly matched the industry leader when it comes to customer costs. Uber Eats costs just $1.50 more than Instacart for the same order and also charges the smallest delivery fee of any app ($1.99).
- Grocery costs: $114.70
- Delivery Fee: $1.99
- Service Fee: $7.99
- Tax: $2.21
- Total Cost: $126.89
- Markup: 25%
3. Postmates
Postmates was bought by Uber in 2020, but even though they are owned by the same company, Postmates charged significantly more than Uber Eats to deliver groceries. While both apps charge the exact same amount for the food itself, Postmates charges more in taxes as well as service and delivery fees. In fact, the $15 service fee Postmates charged for this order was the highest of any app and more than double the service fee charged by Instacart.
- Grocery costs: $114.70
- Delivery Fee: $2.49
- Service Fee: $15.00
- Tax: $2.78
- Total Cost: $134.97
- Markup: 33%
4. DoorDash
Despite the size of Postmates’ service fee, DoorDash was still more expensive than Postmates. That makes it the most expensive app we examined, with a 34% total upcharge. The $4.99 delivery fee charged by the app is the highest of any company, and the $12.83 service fee is just a few dollars smaller than what Postmates charges.
- Grocery costs: $115.28
- Delivery Fee: $4.99
- Service Fee: $12.83
- Tax: $2.55
- Total Cost: $135.65
- Markup: 34%
Save more money on groceries
Whether you prefer getting your groceries yourself or enjoy the convenience of having them delivered to your door, here are some tips for saving on your shopping:
- Cut your grocery bill in half. Saving money can be as simple as writing out a shopping list, and sticking to it!
- Earn extra perks from your grocery hauls. Certain credit cards for groceries offer cash-back bonuses and other rewards – including free memberships on delivery services.
- Make budgeting a regular habit. Track your spending and automate your savings with the help of these top-rated budgeting apps.
Methodology
FinanceBuzz created an order for $100 ($100.35 before taxes to be exact) worth of groceries at one of the largest national grocery chains in the country. The order included 21 different items, including everyday essential items such as milk, chicken, and bread as well as popular snack items such as Oreo cookies and Doritos.
We then placed the exact same order on Instacart, Uber Eats, Postmates, and DoorDash, ensuring to order the exact same brand and size of item as we ordered through the store. All app orders were placed at the exact same store location (which was also the same store location the initial order was placed at for store pickup) and set to be delivered to the same location less than 10 miles away.
We then collected the charge amounts for the groceries themselves, service and delivery fees, and taxes from the checkout screen of each app and compared the total costs to what the groceries cost when ordered for in-store pickup.