Google Express adds fresh food deliveries
February 17, 2016 01:31 PM
(Bloomberg)—Google is adding fresh fruits, vegetables, meat and milk to its Google Express deliveries, answering rival Amazon.com Inc.’s Amazon Fresh grocery service and supermarket-shopping startups such as Instacart Inc.
Google will add perishable groceries to select neighborhoods in San Francisco and Los Angeles, the company said Wednesday. Deliveries are $2.99 for members and $4.99 for everyone else. Membership costs $95 a year. Amazon gives customers who pay $99 a year for Prime service the ability to get some foods delivered within a two-hour window, and offers an expanded range to those subscribed to Amazon Fresh for $299 a year.
The Express update is Google’s latest move in the fragmented online grocery market, which IBISWorld estimates is a $13 billion industry. Major players include Peapod LLC, No. 69 in the Internet Retailer 2015 Top 500 Guide and a subsidiary of Royal Ahold NV, which serves markets in the Northeast and Midwest, and FreshDirect in New York City. Amazon’s grocery deliveries are available in New York, Seattle and parts of California. Instacart offers grocery delivery in 18 states and Washington, D.C. and has a partnership with Whole Foods Market.
Delivering perishable groceries is more difficult than non-perishable items that can be left on doorsteps, and groceries are a low-margin business. Amazon (No. 1 in the Top 500) and Google are seeking to bring their technological savvy to bear on the problem and are developing systems that could one day see drones or self-driving cars deliver products to a person’s home.