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Indulging in food delivery without the debt

They're convenient, but left unchecked, food delivery services can spoil your budget

Summary

Food delivery can be a safe and convenient way to feed your family during the coronavirus pandemic, but the cost can add up.

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Americans have long counted on food delivery services to take the pain out of mundane meal-planning. But the pandemic has made food delivery services more relevant than ever, as consumers look to minimize contact with others.

Much like going grocery shopping when you’re hungry, you may end up spending more when you are ordering food to be delivered than you would if you had filled your cart yourself.

Luckily, the spike in popularity of food delivery services has led delivery apps to become more competitive than ever, creating opportunities to save – if you shop wisely.

See related: Grocery shopping and COVID-19: What’s changed and how to save money

The rise of food delivery during the pandemic

There is no denying that the pandemic has transformed the food industry. “Due to today’s climate, restaurants have had to make tough decisions around staffing, menu offerings and safety,” says Chef Max Hardy, owner of Jed’s Detroit and COOP Detroit, two restaurants in Michigan. “Owners had to pivot to takeout and delivery.”

Consumers worried about contracting COVID-19 have looked at delivery as a method of avoiding contact with restaurant workers and other diners, while in some regions local mandates required restaurants to temporarily shut down indoor dining and conduct all business through takeout and delivery.

According to a 2020 report by ResearchAndMarkets.com, the global online food delivery services market is projected to rise from $107.44 billion in 2019 to $154.34 billion in 2023.

The pandemic is helping to fuel the increase. For example, because of the pandemic, 26% of Americans said they would order takeout or use food delivery services for Valentine’s Day this year, up from 14% in previous years, according to the Illinois-based market research firm Numerator.

Meal delivery services are also transforming the grocery shopping experience, as subscription services such as HelloFresh, Blue Apron and Green Chef will deliver ingredients and recipes so you can make your healthy dishes at home. And the pandemic has made such subscription services even more of a commodity. For example, HelloFresh announced in November that the number of meal kit orders in the third quarter of 2020 more than doubled from the year before.

See related: Food delivery perks on luxury travel cards

Taking advantage of food delivery during and after the pandemic

But do meal delivery services put more of a dent on your wallet than a trip to the grocery store?

The U.S. Department of Agriculture states that a moderate weekly grocery budget for a person aged 19-50 would run between $61.40 and $72.30 – roughly between $3 – $4 per meal. In comparison, for 3 meals for 2 people per week, HelloFresh charges $3.82 per serving for the meat and veggie option.

While the serving price is comparable, keep in mind that you must order a set number of meals each week. There may also be shipping costs to consider. For example, Blue Apron charges $7.99 in shipping fees for some of its subscription plans.

Prepared food delivery apps such as Uber Eats and DoorDash can do even more damage to your budget, as they bring restaurant meals to your door – at restaurant prices. While it’s difficult to compare the costs associated with different food delivery apps because they are based on such variables as the restaurant chosen, taxes and tips, MarketWatch ordered the same meal using Uber Eats, DoorDash, GrubHub and Postmates and paid:

  • $15.54 at Uber Eats
  • $19.90 at DoorDash
  • $20.47 at Postmates
  • $23.30 at GrubHub

But there are other things to consider whether you’re turning to food delivery:

  • If you’re on a tight budget, getting food delivered regularly is probably not a good idea. Restaurants typically charge more than it would cost to cook food at home. Meanwhile, meal subscription services require you to spend either a fixed or a minimum amount in addition to any delivery fees. Plus, the food prices tend to be higher than what you’d pay at your local grocery store.
  • Decide if it’s a need or a want. Some people mistakenly lump restaurant delivery services into the “needs” category because they are a source of food, says Avery Breyer, author of “Your Road to Wealth Starts Here: A Simple Plan for Everyone to Get Out of Debt and Stay Debt-Free Forever.” However, ordering takeout from a food delivery service is in the same spending category as dining out at a restaurant in person – “it’s a luxury, not a necessity,” Breyer says. That doesn’t mean you shouldn’t indulge; it simply means you should budget for it out of the money you have set aside for extras.
  • Make sure the convenience is worth it. A meal delivery subscription can be convenient, but if you have to go out of town or end up working late all week, you may not be able to make a last-minute change to your delivery schedule.

If you put these purchases on a credit card, getting food delivered could bloat your card balances. Some meal delivery services require a weekly or monthly commitment to a subscription plan that is automatically renewed. As with any subscription, it’s easy to set it and forget it. And if you don’t pay off the balance at the end of the month, you could be paying interest on your meals long after you’ve consumed them. If you’d be likely to carry a balance, consider putting these subscriptions on a debit card instead.

The safety factor

In the midst of the pandemic, money isn’t the only issue at play. As consumers continue to have safety concerns about the coronavirus, some believe it is worth spending more on food if having it delivered will keep them safe. To ensure your food is safe:

  • Pay attention to the packaging. Look for individually-packaged utensils and drinkware.
  • Check the delivery app’s procedures. Find out what precautions the service is taking due to COVID-19, such as requiring delivery drivers to wear masks.
  • Request contactless delivery options if available. Some delivery services will drop food off at your door and walk away before you pick it up, ensuring no physical contact at all.

Even after the pandemic, meal delivery services and subscription services will likely have a bright future, experts say. While the pandemic may have given subscription services a boost, 86% of consumers who have a subscription service expect to have the same number of subscription services or more at the end of 2021, according to San Francisco-based e-commerce solutions provider Brightback’s 2021 State of Industry Report.

See related: Eating my way to amazing 2021 travel

That means consumers may have even more meal subscription choices in the future, says Guy Marion, chief executive officer of Brightback. “I think consumers can expect pricing to remain competitive, but likely we’ll see more choice and more consistency of quality as the space matures and merchants evolve their food preparation, supply chains and fulfillment operations.”

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