While many Canadian consumers likely know to expect delivery and service fees when ordering groceries on Instacart, what they may not know is they could be paying as much as $2.50 more per item in hidden markups — and some retailers say that Instacart is keeping all of it.
A Marketplace investigation into groceries being sold on Instacart from Loblaws, Costco and Walmart found that shoppers at Loblaws and Costco are paying about 10 per cent more per grocery item beyond the itemized delivery and service fees, as well as missing out on advertised in-store specials and sales.
- Watch the full investigation tonight at 8 p.m. (8:30 in Newfoundland) on CBC-TV and CBC Gem.
With a valuation of $39 billion, the third-party delivery app — which allows users to hire a “shopper” to pick up their groceries at a variety of stores — has seen delivery sales grow over the pandemic.
But what’s less clear is just how much consumers — some of whom live with disabilities and depend on Instacart for access to food — are paying for that convenience.
To find out, Marketplace compared the costs of purchasing identical grocery orders at each store on both the Instacart app and in-store. While the prices at Walmart were the same in store as they were on the Instacart app, Marketplace producers discovered substantial hidden markups at Costco and Loblaws.
While every Costco grocery item the team looked at was marked up, the only grocery item that didn’t have a hidden markup at Loblaws were the cucumbers.
In one example, Marketplace paid $12.99 in store at Loblaws for President’s Choice Blue Menu lean Italian beef meatballs; on Instacart, the price was $15.35 — a markup of $2.36.
“I’m thinking that that’s ‘tief.’ That’s the Caribbean word for being ripped off, so I’m very surprised and I feel misled,” said Joanne Dominico, a mother and small-business owner who helped Marketplace with the test.
In total, Marketplace paid $74.16 more for the same order of 20 items through Instacart than when purchasing inside Loblaws; the in-store total was $ 242.49, while on Instacart the receipt for the identical items totalled $316.65.
But while $46.17 of those fees can be attributed to the company’s itemized service and delivery fees, taxes and a default five per cent tip, the markups on grocery and sale items — which totalled an additional $27.40 — were not disclosed on Instacart’s receipt.
In one instance, Marketplace paid $4.01 more for a block of butter that was promoted as an in-store sale at Loblaws, but cost $8 on the app.
“I could have bought a whole new chunk of butter for $4,” said Dominico.
WATCH | Why was this butter $4 in store and $8 on Instacart?
Both Loblaws and Costco do not offer in-store sales and promotions on Instacart.
While shopping at Costco on Instacart, Marketplace found similar hidden markups. In one example, the team paid $2.50 more on Instacart for Kirkland Signature Organic lean ground beef, which was priced at $25.99 in store but $28.49 on Instacart.
Instacart says it notifies customers ‘prices vary relative to store prices’
While Instacart confirmed that the retailers are responsible for setting the prices, it did not respond to questions about who receives the money from the markups.
In an email, the company said that “where there are item markups by a particular retailer, we notify customers that prices vary relative to store prices, so they can make clear and informed purchasing decisions.”
But not everyone finds that notification to be clear enough.
The extra fees are acknowledged in the Instacart app through a small pricing disclaimer, but customers have told Marketplace it can be easy to miss, and they don’t know how much more they are paying for each item.
‘I didn’t see any mention of the higher prices’
Erin Matthews reached out to Marketplace after ordering groceries through Real Canadian Superstore (a Loblaws company) on Instacart. Matthews had broken her ankle and needed groceries delivered to her Calgary home.
Her Instacart shopper accidentally left the in-store receipt with the shopping; the in-store bill was for $177, but Matthews had paid $226 on Instacart. After determining service and delivery fees, tax and tip, Matthews was surprised to find almost $30 unaccounted for.
“I was so angry,” Matthews said. “I didn’t see any mention of the higher prices online. When I called Instacart, they told me that the shopper shouldn’t have left the receipt in the bag.”
Dominco, who helped with Marketplace‘s test, wants to see Instacart be more transparent with its pricing.
“Just let me know and then I can make the choice. But when I don’t know, that’s when I feel disappointed,” she said.
‘We call it the disability tax’
The extra fees may be surprising for some of those who rely on Instacart for their regular grocery deliveries, but even more so for people with disabilities, who frequently rely on the service to meet their essential day-to-day needs.
“I mean for us … it’s an essential service and, you know … we have to pay through the nose to use it. So it’s not really fair,” said Martin Courcelles, a frequent Instacart user who is blind.
Courcelles and his wife, Erin, who uses a wheelchair, appreciate the convenience of the service, but are frustrated by Instacart’s fees and markups.
“We call it the disability tax,” he said.
Higher prices might also place the service out of reach for more vulnerable clients, Courcelles worries, especially in light of a harsh economic climate amid COVID-19.
“A lot of people with disabilities aren’t working these days. And this might be the only way that they can get food in the house,” he said. “And for them, you know, all these extra costs, it builds up after a while, right, and some might not be able to afford it.”
It’s a sentiment shared by officials at the Centre for Independent Living in Toronto (CILT), who also note that many people with disabilities are living in poverty and at higher risk of contracting COVID-19.
“For some folks, their only option is grocery delivery through an app, but the high fees can reduce their food budget, and this means less food on their table,” said the CILT in a statement.
“With food prices set to rise in 2022, yet more disabled Canadians will become more food insecure if there’s no reduction in delivery app prices or a discounted option of some kind.”
Sylvain Charlebois, the senior director of the Agri-Food Analytics Lab at Dalhousie University and a professor studying food security, says that as the food delivery market continues to grow, companies like Instacart will have to look at making their services more accessible to those who have no choice but to order their food online.
Charlebois says for those living with physical or intellectual disabilities, or people who need to quarantine, “service charges are simply a regressive tax.”
“As we learn to live with viruses and other unfortunate public health challenges, access to online food delivery services can be an asset only if they don’t penalize those who have no other option, temporarily or permanently.”
No price break for those with disabilities
Currently, Instacart does not offer reduced delivery prices for those living with disabilities, but the company says it does offer a dedicated phone line for clients who have disabilities and need more assistance.
Charlebois thinks a reduction in fees for people with disabilities or mobility issues is long overdue.
“Just on the basis of compassion, absolutely. I think it should have been done by now,” he said.
With the food delivery market poised to reach $20 billion in Canada by 2025, the time to act is now, says Charlebois.
“I think it’s the right time to have that conversation as the market grows,” he said. “If you don’t figure this one out, a lot of people will be in big trouble.”
Walmart, on the other hand, charges only in-store prices on the Instacart app and allows consumers on the app to take advantage of in-store sales for about the same fees as ordering through Walmart directly. Customers can look for stores that display “in-store pricing” or “everyday store prices” on Instacart to shop for groceries without hidden markups. But they should check the fine print, as not every retailer offers advertised in-store sales or promotional prices on Instacart.
Instacart says that “when possible” it works with companies to ensure the prices on the app are the same as in the store and that customers can review their pricing policy for more details, adding that in North America more than half of Instacart retailers offer same as in-store pricing through Instacart.
Costco and Loblaws say that customers who order directly from them will get a better deal.
Costco’s SameDay Service, powered by Instacart, has no added delivery or service fees. However, there are markups on grocery items.
Loblaws customers can use PC Express where available and receive in-store pricing and sales, and orders can be picked up for a small fee or delivered for $9.95.
As for hidden fees, Instacart maintains that it’s clear about the possibility of price differences in the app, and says it’s working to add more features to make grocery shopping more affordable for everyone by implementing features like reduced fees and free delivery on orders placed 24 hours in advance.
In the meantime, shoppers like Courcelles who depend on Instacart will have no choice but to pay a premium.
“During winter, it’s pretty much the only service that we can use to get food into the house,” he said. “It’s the only option we have at this point.”
Have questions about this story? We’re answering as many as we can in the comments.
House Price Index rose 26% in 2021, fastest pace on record – CBC News
The Canadian Real Estate Association’s House Price Index rose by 26.6 per cent in the 12 months up to December, the fastest annual pace of gain on record.
The group, which represents more than 100,000 realtors and tabulates sales data from homes that listed and sell via the Multiple Listings Service, said the supply of homes for sale at the end of the month hit an all-time low.
After pausing for a few weeks in the early days of the pandemic, Canada’s housing market has been on an absolute tear for the past two years, as feverish demand from buyers wishing to take advantage of rock-bottom interest rates has drastically outpaced the supply of homes to buy.
That imbalance is a major factor contributing to higher prices, as buyers have to pay more and more to outbid others because of the lack of alternatives.
Various experts are suggesting that parts of the country are showing signs of being in a speculative bubble, and CREA says the biggest reason for runaway price increases is that there aren’t enough homes being put up for sale.
“There are currently fewer properties listed for sale in Canada than at any point on record,” CREA’s chief economist Shaun Cathcart said. “So unfortunately, the housing affordability problem facing the country is likely to get worse before it gets better.”
High prices not denting demand
CREA says the average price of a Canadian home that sold on MLS in December went for $713,500. That’s actually down from the record high of more than $720,000 in November, but still well up on an annual basis.
High prices don’t seem to be slowing demand, however, as 2021 was the busiest year for home sales ever. Some 666,995 residential properties traded hands on MLS last year, smashing the previous annual record by 20 per cent.
TD Bank economist Rishi Sondhi said that there was a less than two-month supply of homes for sale during the month, which means at the current sales pace, all listings would be gone in less than two months. Under normal conditions, there’s a five-month supply of homes for sale, and Sondhi says that supply and demand imbalance is a major factor in eye-popping price gains.
“With interest-rate pull-forward behaviour keeping demand so strong, and supply struggling to keep up, it’s little wonder why prices are continuing their relentless upward march,” he said. “Buyers pulling forward demand ahead of looming interest rate hikes kept sales at unsustainable levels last month. How long this effect will last is uncertain, but it should eventually fade.”
COVID-19 antiviral: Canada authorizes Pfizer pill – CTV News
Health Canada has authorized the use of Pfizer’s COVID-19 antiviral treatment Paxlovid.
The federal health agency says the prescription-only medication can be given to adults ages 18 and older to treat mild to moderate cases of COVID-19, if they have a confirmed positive viral test and are at a high risk of becoming seriously ill.
The authorization comes with specific instructions on scenarios in which the regime cannot be used, including to prevent COVID-19 infections or to treat patients who are already hospitalized due to severe COVID-19 cases.
The medication— two antiviral medicines co-packaged together— cannot be taken for longer than five days in a row, nor can it be given to teens or children.
More details about the authorization are being provided by Health Canada’s Chief Medical Adviser Dr. Supriya Sharma, in a technical briefing in Ottawa.
Pfizer submitted clinical data for the oral medication, on Dec. 1, 2021.
The government has a deal in place with the pharmaceutical giant securing access to an initial one million doses of the therapeutic drug.
Responding to recent calls from the provinces for a swift rollout of this medication in the face of an expected surge in Omicron hospitalizations, the federal government has vowed that delivery of the drug will happen in short order.
Health Minister Jean-Yves Duclos and Procurement Minister Filomena Tassi will be holding a press conference to discuss the rollout of this treatment at 1:30 p.m. EST.
In November 2021, Pfizer released the results of their Phase 2/3 trials for the drug, stating that they had found the pills to significantly reduce hospitalization and death in COVID-19 patients.
Pfizer said that in a randomized, double-blind study of more than 380 patients, there was an 89 per cent reduction in the risk of being hospitalized or dying of COVID-19 in patients that received Pfizer’s pill within three days of displaying COVID-19 symptoms, compared to the study group that received a placebo.
According to Pfizer, Paxlovid is designed to block the activity of an enzyme in SARS-CoV-2 that is essential for the virus to replicate itself, and also help to slow the breakdown of the pill’s ingredients in order to help combat the virus for longer.
“PAXLOVID stops the virus from multiplying. This can help your body to overcome the virus infection and may help you get better faster,” reads Health Canada’s authorization.
Paxlovid contains two medicines co-packaged together, a 150mg pink tablet of Nirmatrelvir and a 100mg white tablet of Ritonavir, which has been used in combination with other antiviral medications before.
The regime is meant to be taken consistently twice a day, for five days in a row. The agency has outlined on their website the detailed instructions for taking this medication, as well as a list of potential contraindications.
For example, Health Canada has issued warnings for patients with kidney or liver problems; patients with a human immunodeficiency virus (HIV) infection; patients who are pregnant, breastfeeding, or are planning to become pregnant; and patients who take a series of other medicines which may interact with Paxlovid.
Side effects can include an altered sense of taste, diarrhea, muscle pain, vomiting, high blood pressure, and headache. Though, given the limited use of this medication to date, the agency cautions that it is possible not all side effects are known at this time and advise speaking with a healthcare professional if other side “troublesome” effects arise.
The medication is what is called a “protease inhibitor antiviral therapy”, a type of medication that has largely been used before to treat HIV/AIDS and hepatitis C.
Health Canada has also been reviewing an experimental pill from drugmaker Merck, called molnupiravir, since mid August. The federal government also has a contract to purchase 500,000 of Merck’s antiviral medication, with an option for 500,000 more pending regulatory approval.
In late December, the U.S. Food and Drug Administration issued an emergency use authorization for both Pfizer and Merck’s drugs.
With files from CTV News’ Alexandra Mae Jones and Sarah Turnbull
China cuts rates on policy loans for first time since April 2020 – CNBC
China’s central bank on Monday cut the borrowing costs of its medium-term loans for the first time since April 2020, defying market expectations, to cushion any economic slowdown.
The People’s Bank of China (PBOC) said it was lowering the interest rate on 700 billion yuan ($110.19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85% from 2.95% in previous operations.
Thirty-four out of the 48 traders and analysts, or 70% of all participants, polled by Reuters last week predicted no change to the MLF rates, although a rising number of market participants start to forecast a rate cut.
With 500 billion yuan worth of MLF loans maturing on Monday, the operation resulted a net 200 billion yuan of fresh fund injections into the banking system.
The central bank also lowered the borrowing costs of seven-day reverse repurchase agreements, or repos, by the same margin to 2.10% from 2.20%, when it offered another 100 billion yuan worth of reverse repos into the banking system on the day, compared with 10 billion worth of such short-term liquidity tool due on Monday.
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