Safeway(or Albertson) is offering grocery home delivery service in selected areas. I am looking for some statistic and some numbers that breaks down the delivery cost structure:

1. What is the volume of online orders per day per store?

2. With this volume and at about $8(for 4 hours delivery window) and $10(for 2 hours delivery window) per delivery, is Safeway making or losing money on the delivery?

3. For the same dollar amount of the order, will Safeway make more if people just visit their stores? How will that change if volume pick up?

4. What is the break down of the cost? i.e. how much it costs to pick and prepare the order? How much for storage before delivery? How much for the actual delivery cost, which can be further broken down to driver, truck and fuel cost?

5. Albertson also provides store pick up service with $5 fee. Is it a popular one? How many orders are delivered vs how many orders are picked up by buyers?

I think they will loose money on that deal. For one, between gas and salary, it probably costs an average of $10 to make that delivery. And two, it has been proven that people will purchase way more if they are actually in the store and subject to advertising and are able to see things they didn’t realize they needed or wanted. It’s a great service for elderly and handicapped customers but I believe that on average they will actually loose money on the transaction.