Philly grocery chains raise their delivery game to compete with Amazon's Whole Foods

ISRAEL23
Grocery chains are taking note of Amazon’s announcement this week that the online giant will now offer free, two-hour delivery of Whole Foods items to its Prime members. .

When Amazon announced Thursday that it was offering free two-hour delivery of Whole Foods items through its Prime Now service to four cities, it promised delivery within an hour for $7.99 on orders of $35 or more.

The announcement covering Whole Foods stores in Austin, Texas; Cincinnati; Dallas; and Virginia Beach, Va., was not a surprise here. At least four of the biggest chains — Wegmans, Giant, Acme, and ShopRite — say they have been dialing up their delivery game in the last year.

“We of course pay attention to what’s happening in our industry, but pay much closer attention to our customers and our employees,” said Wegmans spokeswoman Jo Natale, who stopped short of naming Amazon.

In December, Wegmans completed the rollout of its service with delivery firm Instacart, giving customers the option of completing their shopping online and having orders delivered in as little as an hour. The service is available in all six Northeast states it has stores in — New York, Virginia, Maryland, and Massachusetts as well as  its 17 stores in Pennsylvania and nine in New Jersey.

By visiting instacart.wegmans.com or downloading the Instacart app, Wegmans customers can purchase all products — from produce, meat, seafood, and frozen foods to specialty cheeses, bakery desserts, prepared foods, and the grocer’s chef-developed EZ Meals —  and have them delivered.

“We will continue to expand the service as we open new stores,” said Natale.

Wegmans’ service marks the beginning of a battle royal among grocers. Amazon’s  announcement of same-day delivery “is the beginning of the ‘unlocking’ of the real value of the Whole Foods acquisition,” said Charlie O’Shea, lead retail analyst at Moody’s. “We expect the entire Whole Foods network to ramp up for delivery in due course.”

Carlisle, Pa.-based Giant, which has 152 stores in Pennsylvania, also began a partnership with Instacart last June and has had one with another delivery firm, Peapod, since 2011.

With Peapod, Giant customers can get their groceries delivered in less than 24 hours.

“If you place an order at 11:30 p.m. tonight, your groceries will be delivered to your house by 3 p.m. tomorrow,” said Giant spokesman Christopher Brand. “We’re picking the perishables you ordered last, about three to four hours before arrival, to make sure they arrive fresh.”

  • Brand said the chain also offers 16 pickup points throughout the Philadelphia area — including Springfield, Flourtown, Wynnewood,  and Fairless Hills —  where customers who order online can go and have Giant staff put the groceries in their vehicle. There are 75 Giant stores in Greater Philadelphia.
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A sign promoting the Amazon Prime Now delivery service is displayed outside a Whole Foods store in Cincinnati. The new program in four US cities is expected to further shake up the grocery industry.

On Thursday, Peapod will announce its fourth “wareroom” in the Philadelphia area to serve 25 percent more customers. A wareroom is a smaller warehouse attached to a Giant store, such as the ones in Willow Grove and Camp Hill, Pa., that serve as a hub for Peapod to get trucks in and out fast.

“We have seen new players that have entered the grocery and grocery delivery space, and that has excited us and emboldened us to do better and to continue the experience for our customers, either in-store or online, to be the best it can be,” Brand said.

As far as Amazon’s latest salvo for Prime members, “we are already ahead of them,” said Brand who also declined to cite Amazon by name. “They are playing with their business model and making adjustments.”

Meanwhile, Albertsons Cos., the parent of Acme, also has an agreement with Instacart, its home delivery vendor, for 135 of its 175 stores.

“Instacart is zip code-driven and therefore, most zip codes within those 135 stores are covered,” said company spokeswoman Dana Ward. “In most cases Instacart can deliver orders within a two-hour window, unless [there is] exceptional high volume or inclement weather. Our more remote locations such as the Jersey Shore and Delaware beach locations are not on Instacart at this time.”

As an incentive, Acme offers shoppers $10 off plus free delivery on their first online order of $35 or more.

ShopRite stores offer ShopRite From Home, with delivery provided by individual stores. The cost, on top of you grocery bill, is $10 to have a Shop Rite employee shop for you, and an additional $9.95 to deliver to your home.

Starting this month, ShopRite customers can save $15 on perishables (produce, meat, seafood, bakery, floral, dairy) on a total delivery order of $225 or more.