SCMP Saturday, February 17, 2001
Delivery fees brought home to customers
JO BOWMAN and CHOW CHUNG-YAN
ParknShop and Wellcome are starting to charge customers to have small amounts of groceries delivered, just two months after the closure of AdMart, the home-shopping service that sparked a supermarket price war.
Shoppers will be billed $15 for each delivery if they spend less than $400. ParknShop made the change on Thursday and Wellcome said yesterday it would follow suit next Friday.
ParknShop said the loss of a rival was not behind the new fee, but Wellcome said the demise of AdMart had allowed it to begin charging for a high-cost service.
ParknShop marketing director Andrew Brent said yesterday: "Over the last couple of years the delivery service has got more and more popular, and we want to make sure we can keep offering a quality delivery service. In order to do that, we need to have some sort of recognition of the costs."
AdMart closed last month, having lost about $1 billion. Tycoon Li Ka-shing, whose Hutchison Whampoa owns ParknShop, said then that the loss of a competitor would not drive up prices.
But watermelon that used to cost $1 a pound in both stores in October 1999 was priced at $2.90 at ParknShop yesterday; a six-pack of Vita lemon tea had risen from $9.50 to $12.90 at Wellcome; and a case of 24 cans of Coca-Cola had gone from $35 to $51 at ParknShop. Ten pounds of Johnny cat-food cost $19.90 at ParknShop yesterday, $4.95 more than in October 1999.
Until this week, both Wellcome and ParknShop were offering free delivery for purchases over $150. ParknShop will now deliver only goods worth $400 or more for free, charging $15 for smaller deliveries to all customers except those with a disability card. Wellcome marketing director Doug Brown said: "Even at $400 we're still spending 10 per cent of that to provide the service."
Chu Yuk-ling, 78, who lives in North Point on an old-age allowance and welfare pension, said: "Rice and oil are much more expensive now. Generally, things cost more than before. I'm too old to carry heavy things, especially those heavy bags of rice. My back gets sore even though it's just a short distance from my home to here. I used to call the shop and ask for home delivery. But now they say I have to buy at least $400 - that's far too much."