Martin Waller
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The big grocery chains such as Tesco and J Sainsbury are under pressure to offer free deliveries to customers ordering online, after Waitrose announced it was scrapping delivery costs.
A price war in online food shopping will put further pressure on margins in what is already a fiercely competitive industry and could prompt grocers to seek further price cuts from suppliers.Waitrose said that from Wednesday deliveries costing more than £50 would be free. At present, delivery charges vary and can cost up to £7 a time.
Mark Price, the managing director of Waitrose, said: “Customers tell us they don't like delivery charges or short-term gimmicks. Prices go up and down depending on the times in the day. It's confusing and it penalises some householders.”
He added that the move would be expensive for Waitrose's rivals to follow but would cut customers' bills for goods bought over the internet by between 5 and 10 per cent.
A spokesman for J Sainsbury said the grocer would not rule out cutting delivery charges “but it's definitely too early to say. We believe our delivery charges are competitive.” At present, those spending more than £100 get free deliveries on Tuesday to Thursday.
Tesco also said it was too early to say how the chain would respond to the Waitrose initiative. Tesco does offer free delivery “from time to time”, said a spokeswoman, but believed it remained competitive with other retailers. “It's about the whole package, looking at the value of groceries and delivery.”
The UK has the most developed online grocery market in the world, expected to rise to 10 per cent of the overall market in the next four years and be worth £13 billion a year. Last autumn, online grocery shopping overtook sales of electronic items for the first time.
A study by the MyVoucherCodes website showed that customers were turning to online supermarket sites for exclusive offers and discounts for home deliveries.
The website polled more than 4,000 consumers and found that 44 per cent went to Tesco, 23 per cent to Asda and almost 12 per cent to J Sainsbury. The average online shopping basket cost £53 a week.
Waitrose uses Ocado, the delivery company in which the John Lewis Partnership, its parent, has a 29 per cent stake, to serve customers within the M25 but has indicated it wants to grow its online service aggressively outside the South East. It is still relatively small in this area. A spokeswoman said: “Our total sales are more than £4 billion a year and online accounts for less than 1 per cent, so we see lots of room for growth.”
The Waitrose home delivery side grew at about 80 per cent last year and is now expanding at more than 60 per cent annually, the retailer said.
Total Easter trading figures across Waitrose are currently 6 per cent ahead of forecasts, Mr Price also announced.
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