retail news in context, analysis with attitude

The Washington Post reports this morning that “the rising cost of fuel is rippling far beyond what consumers pay at the pump. Companies across an array of industries are instituting fuel surcharges that are nibbling away at consumers' pocketbooks. Like the airline industry with its baggage fees, businesses say they are being squeezed by higher gas prices and must pass on the costs to survive.”

One example cited by the Post: “Grocery delivery service Peapod normally charges $6.95 to $9.95 for delivery, depending on the size of the order. About seven months ago, it added a fuel surcharge tied to the average price of gas in certain states. An online chart outlines costs up to $1.48 for a fuel price of $4.05 per gallon. But with gas averaging $4.079 yesterday, the current surcharge of $1.58 is literally off the charts. ‘We did everything we could to save the customers,’ spokeswoman Elana Margolis said. ‘There was no way around. We waited for a really long time’.”

KC's View:
I used to believe that free delivery – or at least the illusion of free delivery, as in the case of Amazon Prime – would be a cost of doing business in the e-grocery sector. I’m not so sure of that anymore, and tend to think that consumers will understand fuel surcharges that are fair and transparent. We all understand how expensive gas is…it all will depend on the way it is done.