EDGE Fast food: Home grocery delivery expands in Chattanooga

EDGE Fast food: Home grocery delivery expands in Chattanooga

October 1st, 2017 by Tim Omarzu in EDGE

An Instacart shopper drops off a bag of groceries in this photo provided by the San Francisco-based startup company.

Photo by Contributed Photo /Times Free Press.

If going to the grocery store isn't your bag, life in the Chattanooga area keeps getting better for you.

Home grocery delivery keeps expanding here, as an increasing number of grocery stores offer the option.

The most recent is Food City. The Abingdon, Virginia-based chain in September announced it would launch same-day delivery service in Chattanooga with help from Instacart, a San Francisco-based company that's in more than 100 U.S. markets. Food City offers home delivery through its website, foodcitydelivers.com "powered by" Instacart.

That came after Instacart kicked off its delivery service here in July with a free, "no-strings-attached," one-year subscription to Instacart Express — unlimited, same-day delivery for orders of more than $35 from Publix, Whole Foods Market, Costco and Petco.

Shipt's headquarters in downtown Birmingham, Ala.

Shipt's headquarters in downtown Birmingham, Ala.

Photo by Contributed Photo /Times Free Press.

Shipt's headquarters in downtown Birmingham, Ala.

Shipt's headquarters in downtown Birmingham, Ala.

Photo by Contributed Photo /Times Free Press.

"It's great for a wide range of people," Instacart area manager Jennifer O'Shaughnessy said then. She started working for the company three years ago as a shopper.

"The bulk of my customer base was busy, working people. A lot of people looked at it as a convenience, not really a high-end luxury," O'Shaughnessy said.

Here's how Instacart Express works: Customers go online to www.Instacart.com or open the Instacart mobile app on their iPhone or Android device, select their city and store, add items to a virtual cart, then choose a delivery window (within one hour, within two hours, or up to seven days in advance) and check out.

An Instacart shopper accepts the order on his or her smartphone, uses the Instacart shopper app to guide them through shopping, pays with a credit card provided by Instacart, and then delivers the order to the customer within the designated delivery time frame.

Food City said then it would create more than 100 new jobs for Instacart shoppers.

In addition to Instacart, Shipt, is a Birmingham, Alabama-based grocery delivery startup that delivers groceries from Publix stores in Chattanooga. And Google Express, which lets people order from the Costco Wholesale store, also offers home delivery of grocery items in Chattanooga.

In August, Target and Aldi made moves to start home delivery.

Target said it would buy delivery logistics company Grand Junction to help it offer same-day delivery service to in-store shoppers.

Software made by the San Francisco-based company connects retailers with about 700 delivery companies around the country that pick up items from stores or distribution centers and take them to customers.

Target's move is aimed not at online shoppers, but at making buying an easier decision for in-store shoppers. The company has been working with Grand Junction to test same-day delivery at a New York store. Shoppers there can ask to have heavy bags, a sofa or anything else delivered that day for a fee, that's calculated based on time and location.

Aldi Inc. said it is partnering with Instacart Inc. to deliver groceries in three U.S. cities, a move that comes amid intense competition and disruption in the industry. Aldi planned to launch a pilot program in Los Angeles, Atlanta and Dallas with the potential of expanding to more cities in the future.

"Grocery shopping online is a relatively small part of the business but it is continuing to grow," Aldi's Vice President of Corporate Buying, Scott Patton, told Reuters.

The website Statista predicts that the $7 billion in online grocery sales in 2015 is expected to rise to $18 billion by 2020 — with millennials most likely to grocery shop online.

Meanwhile, Amazon's recent purchase of Whole Foods has the grocery industry wondering if that will take the home delivery of groceries to a whole new level.

But some question whether grocery delivery will ever boom.

TABS Analytics, a firm that studies the consumer packaged goods industry, caused a stir last year when its founder and CEO, Kurt Jetta, suggested online grocery shopping was under-performing.

"It's not like we want online grocery to fail," TABS Analytics said in a blog post last year. "But as it stands, there are no facts to suggest that a massive boom from this channel can be expected any time soon, or ever, really."

The Associated Press contributed to this report.