Grocery Delivery Competition Heats Up

More services, more cities, more variety

Vons will deliver your groceries.

Amazon will drop groceries off at your doorstep.

Walmart wants to put groceries in your refrigerator.

Why does everyone want to do your grocery shopping?

"Because it is the next frontier in retail," said San Diego State University Marketing Professor Miro Copic.

Copic said less than five percent of grocery shoppers use a delivery service so why are so many companies getting into the delivery business?

"They know that it may end up being the future, " said Copic.

Amazon has gotten the most attention over the years with its two-hour delivery and other grocery options. But grocery stores like Vons have been delivering food for years. And now there are growing companies like PeaPod and Instacart that are expanding.

Those companies work with stores as diverse as Whole Foods, Smart & Final, Petco, Costco, and Sprouts.

"I think we've gone from delivery being a luxury to being a need," said Caleb Grisell with Instacart.  He said the company has expanded from 16 cities to 150 cities in just two years.

But Miro Copic said the service comes at a price.

"Anywhere from close to $100 to as high as $200" for an annual fee and then some companies charge an additional delivery charge. Instacart has an annual fee of $149 but then any orders over $35 come with no additional charge.

Grisell said this is only the beginning.

"Hypergrowth, I would say if you're looking at a graphic it would be like a hockey stick," he said.

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