The cost of not shopping around

Shopping Cart
Shopping inside a grocery store (Oleg Magni/Pexels)

By Kari Mcmahon
Medill Reports

Alyce Barry, a 68-year-old retiree from Evanston, stopped going to the grocery store in early March. As the coronavirus outbreak started to take hold in the U.S., she looked for alternate options.

At first, Barry tried online grocery delivery but faced long wait times. Since her 73-year-old husband has chronic asthma and is in the high-risk category for the coronavirus, she reached out to her local mutual aid group, which enables people in communities to request or provide help during the crisis, whether it’s running errands or providing masks. In April, through the mutual aid group, Barry found a personal shopper to deliver groceries.

Illinois’ stay-at-home order was implemented March 20 to minimize the spread of the coronavirus. Under the order, residents must stay home with exceptions for essential activities, which include grocery shopping. Some residents have chosen to shop differently than they would prior to the order, so they can social distance and prioritize their health.

“[My approach to shopping amid the coronavirus] has changed more than I ever realized at first,” Barry said. “What I’m realizing is that going grocery shopping has been a coping strategy for years, and I hadn’t really realized until I suddenly couldn’t go anymore.”

When Barry retired, she found cooking relaxing and shopped frequently for ingredients. Under the stay-at-home order, her habits have changed. She is only buying basics, such as non-dairy milk and butter, and stopped purchasing fresh fruit and salads because of concerns about decontamination.

Items are delivered by a personal shopper, who charges $20 per hour plus tips. Barry is spending around 60% more per week compared to last year.

Advanced grocery retail sales
Advanced retail sales from grocery stores over 10 years from the U.S. Census Bureau. (Federal Reserve Economic Data/Federal Reserve of St Louis)

As society’s shopping habits changed, retailers have suffered. Retail sales declined 8.7% in March compared to the prior month, according to the U.S. Census Bureau’s retail sales estimate.

However, grocery stores weathered the storm, with a 27% increase in sales in March compared to the previous month, according to the Federal Reserve Economic Data’s advance sales estimate.

Neil Stern, senior partner at retail strategy and consulting firm McMillanDoolittle, said grocery stores experienced surge buying and stockpiling in March, which boosted sales, but anticipated sales stabilizing in April.

“[We’ve] gone into a pattern of much lower traffic counts, so much fewer trips to the store, but with higher basket size [of shopping], so people are making less trips but spending more money,” Stern said.

Before the pandemic, an average consumer spent around $150 per week on groceries, Stern said. People are now spending around $45 to $50 more per week on groceries as they shift away from spending money in restaurants, he said.

Debbie Benjamin-Koller, a 51-year-old part-time educational consultant from Chicago, would typically spend about $100 to $150 on her family of five’s weekly groceries. Now she spends $250 to $300 through using Instacart, a grocery delivery and pick-up service, every two weeks.

“My grocery bill is now $600, so it makes things tight,” said Benjamin-Koller, describing a recent order which included a 20% tip. She rationalizes spending more on groceries because her family no longer go out to eat due to the pandemic. They used to go out to eat a lot, she estimated each time would be over $100.

Chris Kelly, vice president at the management consultant firm Connors Group, said consumers tend to consolidate more when shopping online by going to fewer stores than they would in person, which increases the cost of shopping.

Instacart, one of the most prominent grocery delivery apps, is known for being more expensive than shopping in store because it charges service and delivery fees. Price markups are also added to items in shops Instacart has not partnered with to cover the cost of service.

Instacart has recently come under fire for its treatment of workers. Caitlyn Tillett, a 22-year-old from Evanston, worked for Instacart but now works through Dumpling, an app that enables individuals to start their own grocery shopping service, charging a $15 fee.

“On Instacart, I don’t get to set my own rates, or it’s never the same person that I’ve delivered for, and it became a lot more saturated,” Tillett said. Inc and Instacart’s treatment of workers influenced Barry’s decision to select a personal shopper. She trusts that her personal shopper receives the full amount and is responsible enough to secure their own personal protective equipment, such as masks and gloves, she said.

So far Tillett has been able to secure her own masks, gloves and hand sanitizer. She understands the safety concerns but said she is well equipped to provide the service. In turn, customers like Barry and Benjamin-Koller are willing to pay more because of the risk their shoppers take.

“That’s why I feel like tipping at least 20% is necessary,” Benjamin-Koller said. “I feel like these companies that take so much money from these shoppers, [they] need to know that [they have] to make it sustainable for the shopper because it’s really in their hands whether they’re going to go out there and risk their lives.”

Photo at top: Shopping inside a grocery store (Oleg Magni/Pexels)