Grocery E-Commerce Affordability: Why Retailers Need to Own the Path to Price Parity

Introduction

Affordability has become the defining challenge in grocery e-commerce. Even the largest players have recently called it the industry’s biggest hurdle. And they’re right — the cost of fulfilling online orders has been one of the toughest barriers to long-term growth.

For many grocers, third-party partnerships have helped bridge the gap. But they also come with tradeoffs: platform fees, margin pressure, and added complexity on the store floor. These costs make it difficult to offer true in-store pricing parity online — and even harder to build a sustainable e-commerce channel.

True affordability in grocery e-commerce comes from putting fulfillment back in the retailer’s hands. With the right systems, grocers can keep revenue in-house, protect margins, and run operations that minimize in-store disruption while maximizing fulfillment speed. That’s the foundation for online grocery that grows profitably, not just incrementally.

Why Online Grocery Costs So Much

The gap between what consumers expect and what retailers can deliver sustainably is wide. Online grocery is expensive because:

• Labor costs are high. Picking and packing adds significant overhead compared to traditional in-store shopping, with McKinsey estimating that last-mile and picking operations alone account for more than 50% of total e-grocery fulfillment costs.
• Substitutions and errors pile up. Wrong items and unavailable products erode customer trust — and margin.
• Store congestion creates friction. Gig shoppers and under-equipped staff slow down aisles and frustrate in-store customers.
• Systems don’t talk to each other. POS, ERP, and e-commerce platforms often sit in silos, leaving teams without real-time inventory visibility.
• Third-party platform fees eat into margins. Commissions and service charges force many grocers to inflate online prices just to cover backend costs — making affordability harder to deliver to customers.

The result? Cost-to-serve is inflated, while customer experience takes a hit.

The Third-Party Tradeoff

For many grocers, outsourcing fulfillment to third-party platforms has felt like the only way forward. But while these models can patch short-term capacity gaps, they often introduce long-term obstacles to affordability and control.

High commissions and hidden fees chip away at profitability, while customer relationships shift as the platform becomes the face of the shopping experience and retailers lose the opportunity to build loyalty directly. 

Valuable shopping data and insights often stay with the third party, and brand identity becomes diluted, as grocers compete under someone else’s banner— where the shopping journey is optimized for convenience, not differentiation.

Fulfillment becomes inconsistent, driven by gig labor and variable service standards with rigid, standalone systems that make it difficult to adapt and scale as demand grows. 

For retailers ready to move away from third-party dependency, the next step is rethinking the systems that power e-commerce — and building internal operations that can deliver affordability by design.

What Affordability Really Takes

Grocers looking to build a more affordable e-commerce model aren’t short on ambition—they're short on infrastructure that makes it viable.

Making grocery e-commerce cost-effective means gaining operational control — with store-based fulfillment systems that fulfill faster, stock smarter, and eliminate margin drain across the board.

It starts with real-time visibility: knowing exactly what’s in stock across channels reduces substitutions and wasted labor. Optimized workflows help staff pick and pack orders efficiently—no special training, no errors. Intelligent replenishment strategies can then keep shelves stocked with less spoilage and fewer stockouts.

And those systems must be flexible. Whether demand shifts, new channels emerge, or compliance rules change, tech that can evolve alongside operations ensures affordability doesn’t come at the cost of agility.

But the real unlock is owning the experience end to end. When retailers maintain control of their brand, their customer data and their margins, they gain the strategic advantage needed to personalize offerings, build loyalty, and operate profitably — a principle echoed by Forrester in their analysis of loyalty programs and direct data collection strategies.

Final Thoughts

The conversation around affordability in grocery e-commerce is gaining momentum—and for good reason. Customers want fair prices, but retailers can’t subsidize inefficient models forever.

The path forward is clear: fulfillment systems that drive efficiency, protect margins, and build trust with every order. Retailers who take control today will be best positioned to deliver in-store pricing parity online—without sacrificing profitability.

At OrderGrid, we help make that possible. Our unified platform powers fast, accurate grocery fulfillment with sub–five-minute picks, 99%+ accuracy, and real-time inventory visibility across all channels. No inflated pricing. No platform fees. Just efficient, brand-owned operations that scale.

Ready to cut fulfillment costs, own your margins, and scale profitably? Let’s talk.