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Margins at most grocery stores are abysmal. Not even Whole Foods, which has the highest margins in the industry, could subsidize that delivery model.

Yes - if they're reducing the costs (real estate, cashiers, etc) of the store, they can get money from that side of the transaction. The same is true for food delivery: restaurants save a lot of money if they're not providing space, servers, dishwashers, etc.

This isn't to say that many won't go out of business. Many will, and the market will consolidate.

> They could easily be taking a cut from the shop's profits

If its easy, why are they not doing so? Because there's only so much pain you'll tolerate as a supplier before setting up shop yourself to provide that service directly.

Gross margins are probably pretty good for some items at grocery stores, but in general their income percentages are razor thin.