MESSAGE DELIVERED
Shoppers revolt vs. Whole Foods fee
Whole Foods customers have voted with their wallets when it comes to the chain’s new $9.95 delivery fee. Orders have plummeted in the wake of the eye-popping charge, The Post has learned.
The Amazon-owned grocer — for years dubbed “Whole Paycheck” because of its high prices — used to offer free delivery to Amazon Prime customers, but the newly tacked-on fee has led some customers to schlep their groceries themselves — and delivery orders have declined sharply, Whole Foods employees at the Columbus Circle location told The Post.
One employee said deliveries per hour at that flagship store had plummeted to 40 from 185 since the fee was introduced on Oct. 25.
A Whole Foods spokesman, Brian McGuigan, said those numbers were “grossly inaccurate,” but he wouldn’t give specific information on the number of deliveries per hour or say whether deliveries were affected by the new fee.
Tough competition
The high-volume store is hardly the only Whole Foods store experiencing fewer delivery orders, according to retail consultant Burt Flickinger of Strategic Research Group, which visits stores across the country, tracking sales and foottraffic trends.
“Whole Foods deliveries are down significantly,” he said, because the grocer already has the highest prices in the industry — and now has the highest delivery charge, too.
Competitor Instacart Express, for example, offers unlimited free deliveries on orders of $35 or more for customers who pay an annual $100 fee. Walmart, too, offers free delivery on orders of $35 or more for members who pay a $98 fee for its Walmart + service. Whole Foods, meanwhile, now charges the $9.95 delivery fee no matter the amount of the order — and that’s for Amazon Prime members who already have forked over $119 a year for various benefits, which previously included free delivery on Whole Foods orders of $35 or more.
“Everyone else is offering free delivery, so it’s not surprising that Whole Foods would lose business because of the delivery fee,” said Dan Glickberg of Dan Glickberg Food, a consultancy and venture capital firm. “Customers would rather have free delivery than premium products. That’s ultimately more important right now.”
‘Negative impact’
Whole Foods said it added the fee instead of raising prices. It might have turned off some customers for good with its new delivery fee, Flickinger contended, but he said the company had little choice because
it was losing money on the service. Whole Foods wouldn’t comment, and Amazon doesn’t split out such granular information on its grocery unit.
Brittain Ladd, a retail consultant and former Amazon executive, agreed that the company was losing
“so much money” on delivery “that it did something it’s never done before — which is add a fee to Amazon Prime members.”
Marc Wulfraat, president of MWPVL, a logistics-consulting firm in Quebec, said the fee has indeed likely led to a “negative impact” on delivery orders. “Customers were upset and were accustomed to free delivery, which becomes like a narcotic after a while,” he said.
The reasoning behind free delivery in the first place, Wulfraat said, was for “Amazon to take over the food world, but all that happened is that Whole Foods came out with massive losses.”
Some of the people who would have otherwise used delivery appear to be shopping in-store instead, according to Placer.ai, which tracks retail foot traffic and said Whole Foods had been seeing a “positive trend” when it comes to in-store visits, although they’re still below prepandemic numbers. Ethan Chernofsky, Placer.ai’s vice president, said it wasn’t possible to parse the data to determine whether those customers would’ve otherwise been using delivery. A Whole Foods spokesman said delivery remained a “thriving” part of its business.
Bezos burn
One employee at the Columbus Circle store said perhaps Amazon owner Jeff Bezos is now focused on other things — like filling his coffers for his space program. “I guess rocket fuel is too expensive for Jeff Bezos,” the employee quipped.
The employee added that since Whole Foods said it was tacking on a fee, the location had slashed the number of employees who are designated shoppers for online orders, although Whole Foods corporate disputed this.
Whole Foods says its customers’ so-called basket sizes have continued to increase since the beginning of 2021 and that it’s investing in initiatives to make in-store shopping more convenient, including bringing prepared foods back and testing Just Walk Out technology at two stores next year.