Yahoo Finance Are Coles and Woolworths' subscription delivery models a rip-off?
Supermarket giants Coles and Woolworths jumped aboard the online grocery-delivery trend during lockdown. But do their fee-paying schemes stack up?
As Coles and Woolworths strongly deny price-gouging claims, attention has turned to their subscription model of grocery delivery where customers pay a monthly fee to shop online.
Coles Plus and Woolworths Unlimited were developed in response to customers’ changing habits, which were largely picked up or entrenched during lockdowns as many Aussies embraced having groceries delivered to their doorstep.
For busy working parents, carers, shift workers, people with a disability and the elderly, online grocery delivery can be a godsend. Or, after a busy week, sometimes the last thing you want to do is trawl supermarket aisles searching for broccoli and condensed milk.
However, delivery fees can eat into your weekly budget so do Coles and Woolies’ subscription schemes – which both come with bonus reward points – save you money or are they a rip-off for customers?
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It all comes down to how often you shop and how large your orders are. If you have multiple weekly deliveries, a subscription could work out cheaper. But if your regular online shop comes to more than $250, you qualify for free delivery anyway so you won’t save by paying a monthly fee.
Compare the Market's Chris Ford told Yahoo Finance: “Before signing up to any program, we’d encourage Australians to look past the bells and whistles, do their research and ensure that they’re truly getting the most bang for their buck – especially if they’re forking out money to join membership programs.
“In addition to paying for your membership, you may need to meet certain conditions to reap the benefits and, unless they match your circumstances, it may not be worth it.”
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Consumer watchdog Choice took a look at the pros and cons of both schemes:
Coles Plus
Under Coles Plus, members pay $19 a month and receive free delivery – including same-day delivery on orders over $50, double Flybuys at Coles supermarkets and 10 times the number of Flybuys points on alcohol.
There is free access to Click and Collect Rapid for orders over $30 (rather than paying a $5 fee) and a free Liquorland delivery each month if you spend over $50 per order.
Woolworths Unlimited
Woolworths Unlimited has a cheaper monthly fee of $15 or $119 a year. It offers free delivery on orders over $75, double the reward points, free standard shipping on Everyday Market orders over $50 and a fee of $10 instead of $15 for Delivery Now orders – up to 50 items delivered in two hours.
Woolies also has Everyday Rewards for $7 a month or $70 a year, which offers bonus rewards points and a 10 per cent discount on shopping in-store or online - up to $100 a month.
Choice expert Peter Zaluzany said it was worth taking the time to crunch the numbers because you could wind up saving money with a subscription.
“You may only have to pay a few dollars per month if you have someone to split the fee with, like a partner or housemate,” he said.
While you have your ‘finance hat’ on, you could also compare the prices of both supermarkets by inputting your regular list of products into the two delivery platforms and see which one works out cheaper.
Ford said major retailers had rolled out a number of paid membership reward programs, promising Aussies discounts and benefits.
“The catch here is you may need to spend a certain amount, so it may not be worthwhile if you do smaller shops or shop online infrequently," he told Yahoo Finance.
“If you’re paying for a membership, be aware that it effectively could lock you into shopping at one store. You may miss out on greater savings by not shopping where the discounts are.”
What do shoppers say about the subscription schemes?
On Facebook group Markdown Addicts Australia, customers largely seemed to prefer the Woolworths model, claiming the Coles scheme had fewer benefits.
“I think Coles Plus is crap," one wrote. "Wow, you get 2 x Flybuys Points but nothing else. The major perk they offer is getting free Express Click and Collect instead of paying $5 for it.
“Unless you’re grocery shopping big time at Coles each week, I wouldn’t bother with Coles Plus. I get much more out of my Everyday Rewards Extra than I did from my Coles trial.”
Another added: “I find Woolworths so much better. I can get same-day delivery a few hours after I place the order. Minimum spend is $50 I think. I’ve always been a Coles shopper but this has changed my mind.”
A male shopper added: “Just pick the six-hour slots for $2-$3 on certain days and no need to pay for Coles Plus. Apart from deliveries, that’s really it. The double Flybuys is only double standard points so not worth much.”
However, others said they’d switched from Woolies to a Coles subscription and preferred it.
“Despite a few hiccups, overall Coles has been much better,” one happy shopper said. “The food quality is much improved (particularly their meats/seafood), hardly ever have missing items (in fact, it’s very rare), and we seem to be accruing more Flybys dollars than we ever did with Everyday Rewards.
"Not going back to Woolies anytime soon.”
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