Examining the Potholes and Potential of Branded Grocery Delivery
In an ideal scenario, grocers would have full control over their delivery, offering in-house, branded service with their own workers picking, packing and bringing orders to customers.
But the steep cost of owning delivery end-to-end mean grocers oftentimes can’t have it all. Paying for the costly last mile has always been a particular challenge, and the growing demand for services like 30-minute delivery only makes that more difficult.
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“Your typical grocer really is not equipped from a logistical standpoint, [an] employment standpoint to employ door-to-door delivery drivers. It’s not in their sweet spot,” said William Anthony, partner at law firm Blank Rome.
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Being aware of the changing labor landscape
As the grocery industry grapples with hiring and retention challenges, grocers face the question of when they want to use their own workers for e-commerce operations versus when to outsource labor, especially for the delivery portion.
On the outsoucing side, the gig economy is booming, and flex work is a desirable option for drivers, according to Anthony and Porter. But there are legal and legislative challenges for grocers to be mindful of. Discerning between the classifications between employees and independent contractors can be tricky because criteria for the two often fall under numerous state laws, Anthony said. Some states are reconsidering how they classify independent contractors.
Grocers need to watch out for potential "joint employment" issues that could arise, like if they use a combination of delivery vendors and their own employees for the same duties, or if they control the method or means of how a contract worker performs their job, Anthony said.
“Independent contractors often point to ... a situation describing ‘Do you have employees doing the same thing that I do? Because if you do, then I can’t be an independent contractor,'" he said.
Anthony and Porter are hopeful companies can find a balance between employees and independent contractors.
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"Examining the Potholes and Potential of Branded Grocery Delivery," by Catherine Douglas Moran was published in Grocery Dive on February 24, 2022.