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COVID costs lead Spud.ca to introduce delivery fees

Online grocer’s approach was to be ‘transparent, open and honest’ with customers about increased operational costs

SPUD.ca CEO Peter van Stolk with one of the company's delivery vans.SPUD.ca CEO Peter van Stolk with one of the company's delivery vans.

For the first time in its 23-year history, Vancouver-based Spud.ca introduced delivery fees on certain orders.

“COVID has increased costs in operations in a lot of areas and we tried to absorb those costs from the start of the first wave,” said Peter van Stolk, CEO of Spud.ca, in an interview with Canadian Grocer. “However, with the reality that this is going to be a longer, drawn-out process, we had to look at implementing delivery fees.”

In an email to customers, van Stolk laid bare the challenges the pandemic has brought to the business.

“2020 has been a very challenging year for all of us; as a company that has been in business since 1997, this year has been the most challenging,” he wrote. “Delivering safe and healthy food to you and your family has always been our mission while reducing our environmental impact continues to be at the forefront of our business. Like all businesses, we have had to adapt to the change that COVID-19 has created for our team members. We have all had to change how we live and how we do business, and like you, we do not know how long this new way of life will last.”

Van Stolk went on to list what cost areas the delivery fees will help cover: extra packaging and recycling costs; increased sanitization and safety protocols; and increased compensation for team members.

“I think it’s fair to say that every retailer has to address some additional costs and there are only two ways they can do it. They can raise prices, or they can really be transparent, open and honest with their customers about the costs,” van Stolk told Canadian Grocer. “We’ve taken a really transparent approach and said here’s what the costs are, here is why and here are some ways that we can help you mitigate those costs.

As of Nov. 9, there’s a $6.25 delivery fee for orders below $84.99 and a $4.25 delivery for orders between $85 and $124.99. Orders over $125 will be delivered free of charge. In addition, orders delivered on Saturdays and Sundays will be free. Those weekend days are what van Stolk called “environmental days.”

“We’re really trying to reduce our greenhouse gases, and if your truck is full, then you are optimizing your environmental capacity,” said van Stolk. So, customers who help with those environmental savings won’t see any delivery fees on their bills.

So far, customers have been understandable, as evidenced by some feedback van Stolk shared with Canadian Grocer. “Thank you for the clarity in explaining why the fees were launched.” “Very understandable.” “Love Spud.”

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