The research is clear: Customers want online grocery delivery.
Over a three-month span, grocery delivery reached over 80% of U.S. households — a trend that’s only growing among millennials and Gen Z.
That said, the question isn’t whether to offer grocery delivery. It’s how to do it without losing money, customers… or your sanity.
Here are the seven biggest online grocery delivery challenges you'll face, and exactly how to solve them.
Challenge #1: High Fulfillment Costs
The problem: Delivery is expensive to run on a small scale. Every order requires someone to pick items, stage the order, and either hand it off to a driver or deliver it directly. Without the order volume that large chains enjoy, the cost-per-order stays high — and on thin grocery margins, it doesn't take much to make an order unprofitable.
Add in supplies like insulated bags, gel packs, and cold chain packaging, and the costs pile up before you've even thought about driver wages or mileage.
The solution: Start with pickup, then add delivery.
Quick tips:
- Launch curbside pickup first — no drivers, no routing, no cold chain complexity.
- Add delivery only after your picking and order management workflows are solid.
- Start with a five-mile radius and expand as volume grows.
- Set a $30–$50 order minimum so each delivery covers its own cost.
- Charge a flat delivery fee to offset fulfillment costs.
Related Read: How To Organize a Small Grocery Store: 6 Easy Ideas
Challenge #2: Logistics & Route Complexity
The problem: If you want your online grocery delivery to be profitable, you need to get multiple orders to multiple doors in the right sequence, within narrow time windows, while accounting for traffic, weather, and the fact that someone's milk needs to stay cold the entire time.
Without route optimization, drivers waste time and mileage. Without accurate time estimates, customers get frustrated. Both problems cost you money.
The solution: Use software built for delivery routing.
Quick tips:
- Use tools like Onfleet, Routific, or Circuit for automatic route sequencing with traffic and weather data.
- Give customers live tracking so they don’t have to wonder where their order is.
- Batch deliveries by zone rather than by time received to reduce mileage.
- Build buffer time into delivery windows — underpromising beats the alternative.
If you're working with a third-party delivery platform like Instacart or DoorDash, much of the routing is handled for you — though you trade control for convenience and pay a commission (more on that in Challenge #6).
Challenge #3: Order Errors & Substitutions
The problem: In store, a customer can grab a different size or brand when something's out of stock. Online, they trust you to make that call for them — and when you get it wrong, they're frustrated. Substitutions that feel lazy ("I ordered oat milk and got whole milk") destroy trust.
Allergy-related errors are worse. A missed note about a nut allergy or a gluten intolerance is a liability.
The solution: Build confirmation checkpoints into your picking workflow.
Quick tips:
- Have pickers scan a barcode or QR code to confirm every item before it goes in the bag.
- Offer three substitution options at checkout — accept, reject, or be contacted first.
- Seal orders immediately after packing to prevent mix-ups.
- Flag allergy notes in your order management system.
Challenge #4: Perishable Product Freshness
The problem: Groceries have a narrow window between perfect and the customer requesting a refund. A bag of arugula wilting in a warm van for 45 minutes is a bad customer experience. A quart of ice cream that arrives partially melted is worse.
Even one or two compromised orders a week can noticeably dent already thin margins through refunds and store credits.
The solution: Treat cold chain management as seriously as the order itself.
Quick tips:
- Pick in zones. For example, ambient, then refrigerated, and frozen last.
- Stage completed orders in a cooler or temperature-controlled area until handoff.
- Use insulated carriers and gel packs for every order.
- Send a post-delivery freshness prompt to catch problems early and show customers you care.
After delivery, send a quick follow-up asking customers to rate item freshness and temperature. This gives you data on where your cold chain is breaking down and shows customers that you take quality seriously.
Challenge #5: Unpredictable Order Volume
The problem: Online order volume doesn't flow evenly throughout the week. Maybe Fridays and weekends surge, but Tuesday afternoons are dead. Without historical data, staffing for this is mostly guesswork — and getting it wrong in either direction is costly.
The solution: Incentivize off-peak ordering and use your point of sale (POS) data to staff smarter.
Quick tips:
- Offer a discount, free delivery, or bonus loyalty points for orders during slower days.
- Let customers schedule delivery in advance so you can plan picking labor.
- Review POS sales trends weekly — patterns emerge quickly and make staffing much easier.
- Use promotional spikes as data points to anticipate future surges.
Challenge #6: Thin Profit Margins
The problem: Grocery margins are infamously tight — typically 1–3% net for independent stores. Delivery compresses them further. If you're using a third-party delivery app like DoorDash or Instacart, expect to pay 25–35% commission on every order.
That can turn a marginally profitable sale into a loss, but building your own delivery infrastructure has costs, too — software, drivers, insurance, supplies. Neither option is free.
The solution: Know your true cost per order and price accordingly.
Quick tips:
- Calculate all-in cost per order (labor, packaging, mileage, platform fees) before setting any fees.
- Use third-party platforms like Instacart and DoorDash for customer acquisition — then migrate regulars to your own direct ordering channel where you keep the margin.
- Launch a monthly delivery subscription ($9.99–$19.99/month) to generate predictable revenue and encourage higher order frequency.
- Consider a modest online price markup (3–5%) to offset fulfillment costs — just be transparent about it.
- Set an order minimum that ensures every delivery is worth making.
Challenge #7: Competition With Big-Box Supermarkets
The problem: Big-box supermarkets have advantages that are almost impossible to match head-on — deeper discounts, larger selection, faster delivery, and the infrastructure to take losses on some orders while making it up across thousands of locations.
Trying to beat them on price or speed is a losing game for an independent grocery store.
The solution: Stop competing where you can't win, and double down where you can.
Quick tips:
- Feature locally-sourced produce, meats, and specialty items that your competitors simply don't carry.
- Curate your online menu — a well-organized 3,000-product store beats a cluttered 30,000-product one.
- Partner with local farms, bakeries, and producers for exclusives no chain can match.
- Use loyalty data to make personalized recommendations.
- Tell your local story in delivery confirmation emails and packaging.
Related Read: What Do Consumers Expect from Local Markets vs. Big-Box Chains?
How Markt POS Makes Online Grocery Delivery Challenges Manageable
If you're serious about online grocery delivery, you need Markt POS — the POS system built specifically for small grocery stores.
It helps you:
- Reduce mistakes and improve substitutions. Use Smart Search to speed up item lookup, and enforce grocery-friendly checkout rules to cut picking and ring-up errors.
- Simplify inventory management. Auto-fill low-stock items, track case breaks and expiration dates, and manage POs without spreadsheets.
- Protect margins. Run promotions, support dual pricing, and track shrink to see exactly where profit is leaking.
- Speed up checkout. Offer mobile pay, contactless options, and fast card-only self-checkout to keep lines moving.
- Scale pickup and delivery. Start with curbside and expand to full delivery without rebuilding your system.
Ready to see how it works in action? Schedule a software demo today.
by Joel
by Luke
