Tesco Announces Its Increasing The Minimum Spend For Home-Delivery Orders
Source: Mintel 31-03-2023

UK 31-03-2023

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Tesco has announced it is increasing the minimum spend that customers have to reach for home delivery orders. Starting on the 2nd of May, its customers will have to spend an additional £10 to reach the new minimum of £50. If customers do not reach the minimum spend, they will be charged a £5 fee rather than £4. Its minimum spend on click and collect will remain the same.

Mintel comment:

“Tesco has announced plans to increase its minimum spend for its home delivery orders to £50 and if customers do not reach the minimum spend then they will be charged an additional £5. This will be coming into effect on the 2nd of May. This comes after Tesco initially announced that to support its growing costs of operating online that it would be introducing fees to its suppliers to compensate for these costs; this was received with some backlash, subsequently Tesco later announced that the suppliers would not be delisted if they refuse to agree to the new fees.

With the current economic backdrop, online grocery shopping is perceived to be a more costlier way to buy food and drink and consumers are seeking greater value whilst grocery shopping. Some 35% of consumers believe they find better prices/promotions in-store, and are planning their shopping and sticking to their budgets.

Many retailers, especially in the grocery sector are adjusting to the growing energy costs, and rising prices brought on from supply chain demands. Now, retailers are having to pass on some of these costs onto consumers.

Grocery shoppers are experiencing the strains of the rising costs of living, and many have sought out ways to save, and to avoid these additional costs being brought onto them. Some 31% of consumers find that delivery charges are too high, noted in Mintel’s Online Grocery Retailing - UK, 2022 Report.”