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Feds OK test of USPS grocery delivery

Federal authorities have given approval for the U.S. Postal Service to commence a two-year test of a customized delivery program for grocery e-tailers.

The USPS began operational tests on such a service earlier this year in partnership with AmazonFresh in San Francisco. The Postal Regulatory Commission approved a further test allowing for USPS to work with retail partners to deliver bins of groceries to customer homes between 3 and 7 a.m.

The commission said it would cap the revenues the service could reap from the test to $ 10 million, but said the USPS could ask for an exemption to exceed that amount. In its petition, the USPS said it was likely the test would generate at least that much.

The commission determined that the new service would not cause disruption for existing grocery delivery services, as alleged in an objection to the test by a group known as the Taxpayers Protection Alliance.


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The USPS has been delivering groceries to 38 ZIP codes around San Francisco in the test with Amazon. It said the test “is designed for retailers to deliver groceries and other prepackaged goods in a customized delivery window, tailored to their unique offerings and customer base. In addition to testing the operational feasibility of customized delivery windows, this market test will also assist the Postal Service in determining the optimal pricing structure for this type of service.”

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Retail View: Instacart raises bar on home delivery

Like many new companies in this era of technology, the needs of the owners led to the launching of Instacart, an online grocery shopping and delivery service.

“It was a problem that we personally had that we wanted to solve,” said Max Mullen, a co-owner of Instacart. “We wanted to get high-quality groceries and have them delivered quickly, and nobody was doing that.”

He and a couple of partners launched Instacart in July 2012 in the San Francisco market and since then have expanded it to 12 metropolitan centers across the United States. Mullen said five new metropolitan areas will be opened by the end of 2014 and he expects exponential growth in 2015, with most major population centers being served by the end of next year.

Mullen said other online grocery companies have not survived for various reasons that Instacard has been designed to avoid. For example, he remembers the famous flameout of Webvan, which was also launched in the San Francisco Bay area, and said that company was “extremely costly to run from an infrastructure perspective. And it was over-leveraged.”

Webvan could not support that infrastructure as it searched for customers and it died a spectacular death.

Personal-ShoppersPersonal shoppers on their way to delivering an order. Produce is included in 95 percent of all orders and makes up about 35-40 of total orders.Instacart has a simple model built on partnering with existing retail grocery stores and offering very fast delivery. Using the company’s technologically advanced software either on a computer or a smart phone, a customer can order groceries, including fresh produce, and often receive that order within an hour. In fact, if certain geographic criteria are met when the order is placed, Instacart guarantees the delivery within an hour.

Mullen said the company is targeting busy moms as well as urban professionals. He said both groups are challenged for time and appreciate having their high-quality groceries delivered the same day they order them. It is the speed of delivery that he believes will help Instacart survive as giants such as amazon.com and Google enter the home delivery grocery space.

Instacart can make good on its delivery guarantees because it has shoppers in stores throughout the metropolitan area waiting for orders to appear via their own smart phones. Instacart partners with specific independent retailers and chains in each market area. Often the personal shopper is already working on another order when the new order is placed. The items are bought via a previously established account and delivered quickly.

Mullen said the delivery can happen so quickly that a mom making a meal and missing an ingredient can place the order and have it delivered while still making that dish.

For orders under a $ 35 ring, the delivery charge is $ 5.99, while for orders above that threshold the charge drops to $ 3.99 per order. In addition, most customers tip the delivery person.

Mullen said the model works financially for several reasons.

First, the retailers that are involved share the cost of the service. The benefit to that store is that it often gets access to new customers.

For example, in San Francisco, Rainbow Grocery is a very popular independent grocery co-op, but its single location makes it difficult for consumers who live several miles away to frequent the place. With Instacart, they now have access to the high-quality produce and other items for which the retailer is noted.

Mullen said that as Instacart moves into a new metropolitan area it partners with popular retailers with high-quality products that many consumers want access to. This gives the service instant credibility and instant access to customers.

Other retailers that are currently serviced by Instacart include Whole Foods, Costco, Kroger and many smaller chains throughout the country. As it opens new markets, Mullen said its rate of growth in each market is increasingly faster.

Many items on the Instacart website are sold to the consumer at the exact same price that is available in the store, but Mullen said some retailers do adjust their pricing both up and down. They might charge more for some items and make others available at a lower cost as a special promotion for online shoppers.

When Mullen and his partners launched Instacart, they thought fresh produce, like other items in the store, would be on the average consumer’s shopping list, but Mullen said its popularity has been a bit surprising.

“Produce is on 95 percent of our orders and makes up about 35-40 percent of the total orders,” he said.

The company does train its shoppers on picking top-quality produce, including such intricacies as how soon an avocado will be ripe. Mullen said customers do have the option to buy produce in various stages of ripeness so the personal shoppers need to be able to accommodate those requests.

“It is our biggest selling category, so we need to get it right,” he said.

He said the training module includes written material, an online video and in-person training.

The top sellers in the produce department for Instacart mirror the top sellers for any brick-and-mortar store. Bananas are No. 1, with other top-10 categories being berries, packaged salads, avocados, citrus, onions and grapes. Overall, fresh fruit is a better seller than fresh vegetables.

The company’s personal shoppers are typically students or stay-at-home moms looking for extra income. Shoppers are paid based on their number of deliveries in a given time frame, so a quicker shopper can make more money. While many are part-time, Mullen said there are some who do it all day long as their main source of income.

When the company first launched, Mullen said the initial users were from higher-income levels, but the low cost of delivery and access to the same price in the stores has created customers from every price range. What they have most in common is lack of time.

In each metropolitan area that it enters, Instacart maps its service area carefully so that the customers can be reached efficiently and quickly.

For example while the East Bay in the San Francisco area is covered by Instacart, my community on the east side of the Oakland/Berkeley Hills area does not yet have coverage, though Mullen said it should open up soon.

The current markets that are covered by Instacart are Atlanta, Austin, Boston, Chicago, Denver, Los Angeles, New York, Philadelphia, San Francisco Bay area, San Jose, Seattle and Washington, DC.

 

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The Lempert Report: Instacart pushes online delivery (video)

Instacart, a San Francisco company that uses smartphone-equipped “personal shoppers” to provide home delivery from supermarkets in as little as an hour, is making significant headway.

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The Lempert Report: Instacart pushes online delivery (video)

Instacart, a San Francisco company that uses smartphone-equipped “personal shoppers” to provide home delivery from supermarkets in as little as an hour, is making significant headway.

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Registering for content on Supermarket News will give you INSTANT access to invaluable articles and media content that industry professionals rely on. You will have access to our special reports, feature articles, and industry analysis. It’s FREE, easy and quick.  What are you waiting for! In addition you will also receive a complimentary copy of SN’s salary survey sent to you by email.
 

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The Lempert Report: Instacart pushes online delivery (video)

Instacart, a San Francisco company that uses smartphone-equipped “personal shoppers” to provide home delivery from supermarkets in as little as an hour, is making significant headway.

Why Register for FREE?

Registering for content on Supermarket News will give you INSTANT access to invaluable articles and media content that industry professionals rely on. You will have access to our special reports, feature articles, and industry analysis. It’s FREE, easy and quick.  What are you waiting for! In addition you will also receive a complimentary copy of SN’s salary survey sent to you by email.
 

Click here to read the FAQ page if you have any questions (opens in a new window)
 

Attention Paid Print Subscribers:  While you have already been granted free access to SN we ask that you register now. We promise it will only take a few minutes! Or visit your profile and add your print magazine account number and zip code.

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Government: Document Delivery Time Shouldn’t Halt PCA Trial

Ahead of today’s pre-trial hearing in the Peanut Corporation of American (PCA) criminal case, government attorneys took 20 pages to explain how they’ve done a good job of providing documents for the defense.

However, the defense team today wants U.S. District Court Judge W. Louis Sands to focus on the timing of the latest discovery product — a hard drive containing 95,966 images or pages produced just two weeks before the jury trial scheduled to begin on Monday.

Athens, GA, attorney Edward D. Tolley, who represents defendant Michael Parnell, says that government attorneys have “not addressed the substance” of a joint defense motion calling upon Sands to dismiss the entire case over the late submission of the documents on the hard drive.

“The Government’s late discovery puts defense counsel in the untenable position of having less than two weeks to review at least 95,000 pages of new discovery while also preparing for trial of this case, and there, the ‘process’ of the trial is affected, i.e., the late production violates Due Process of Law pursuant to the 5th Amendment to the Constitution of the United States, and obviously affects ‘the assistance of counsel’ pursuant to the 6th Amendment to the Constitution of the United States,” Tolley writes.

In contrast, prosecutors assert that the government “has complied, is complying, and will comply with all its discovery obligations in these cases.” They charge that the defense team is taking a “dystopian view” of the state of discovery when just the opposite is the fact of the matter.

“This grim fiction, however, could not be further from the truth, “ writes K. Alan Dasher, assistant U.S. Attorney for the Middle District of Georgia. He contends that the government’s document submission to the defense has been “timely and comprehensive.”

While insisting the prosecution’s record on discovery is clean, the government’s trial team led by Dasher says it is ready to proceed with the trial on Monday, July 14.

“Indeed, the pressure for dismissal stems largely from Defendants’ refusal to consider whether they, independently of any action by the Government, need further time to prepare for trial,” Dasher’s response motion states.

Dasher said the government has fulfilled its obligations prior to trial, and the defense motion to dismiss the case should be denied. He says the court has plenty of other remedies if any discovery violations did occur.

Stewart Parnell, former chief executive officer of the now-defunct PCA; his brother Michael Parnell, a peanut broker, and Mary Wilkerson, quality control officer for the company’s Blakely, GA, plant are being tried in the case that began in 2013 with a 76-count federal felony indictment.

However, the government does not find another defense team remedy acceptable — excluding 26 witnesses from testifying, along with related evidence. In that instance, Dasher said the government would suffer “undue prejudice and irreparable harm.”

Among the witnesses the defense wants excluded from the trial is Dr. Ian Williams, one of the nation’s top food safety experts, who heads up multi-state outbreak investigations at the U.S. Centers for Disease Control and Prevention in Atlanta.

Sands has decided Stewart Parnell’s mental soundness is sufficient for the trial. The judge denied a government motion asking for the right to subject the top defendant to a mental evaluation. That motion had been hanging around ever since Parnell asked that his Virginia neuropsychologist be admitted as an expert witness to tell the jury about his alleged Attention Deficit Hyperactivity Disorder (ADHD). Sands ruled June 24 that testimony from the ADHD expert witness was inadmissible.

Attorneys for defendants Stewart Parnell and Mary Wilkerson also weighed in Thursday with reply briefs to the government.

“The Defendants do not seek to punish the government for its discovery abuses; rather, the Defendants seek an order of this Court to meaningfully remedy the due process violations that have already occurred and will continue to occur if relief is not provided,” they wrote.

“The government views the Defendants’ invocation of their constitutional rights as an affront to the government, because the government has seemingly forgotten that its mission is to ‘win its point whenever justice is done its citizens,’” they continued. “The Defendants in this case, no matter how much maligned by the government, Congress, and the press, are also the citizens to whom justice must be provided.”

The judge will hear arguments on the motion to dismiss the case at 10 a.m. Friday at the federal courthouse in Albany, GA.

Food Safety News

Roche Bros. expands delivery to Boston

Roche Bros. Supermarkets is expanding its home delivery service in several Boston neighborhoods, beginning Monday.


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The Wellesley, Mass.-based chain, which previously had offered delivery in suburban areas, said it would now deliver in the Beacon Hill, Financial District, North End, West End, Fenway, Back Bay, South End, South Boston, Prudential, and Waterfront neighborhoods. The new Boston service will also include expanded delivery hours from 6 a.m. to 8 p.m.

Delivery costs $ 9.95 per order, with no minimum or maximum order requirements. Roche Bros. offers phone ordering for an additional $ 5.

“We are thrilled to be expanding our delivery area to residents in the Boston neighborhoods, especially in advance of our new flagship store to open in Downtown Crossing,” said Rick Roche, co-owner and CEO of Roche Bros. “This is a great way for our neighbors to get to know us. We’ve been a part of the community since our Roslindale store opened in 1952, but this is the first time we’ve offered our Home Delivery program to our future neighbors downtown.”

All Roche Bros. personal shoppers sign a “pickers pledge” attached to each order, indicating their promise to pick the customer’s order just like they would for their own family, the chain said. Deliveries are made in climate-controlled trucks with separate compartments for refrigerated and frozen items.  

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Grocery delivery serves niche markets — for now

Online grocery delivery services in the Midwest are growing in popularity, although they are still primarily serving smaller, niche markets. Bill Bishop, chairman of omnichannel consulting firm Brick Meets Click, said that online grocery services that provide delivery are growing annually by 15% to 20%. “It’s hard to see a community without delivery [but] it’s still a premium service,” said Bishop, noting that the typical customer for grocery delivery services have a …

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Giant Eagle to Offer Free Prescription Delivery

PITTSBURGH — Giant Eagle is the latest supermarket to enhance its pharmacy service with free prescription delivery.


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Beginning Monday, the chain will hand deliver prescriptions for free within a 10-mile radius of 22 stores in Central Ohio. 

Orders called in by 11 a.m. will be delivered same-day, according to reports. Payments can be made over the phone or upon delivery with a credit card or cash.

“We are excited to have recently piloted our first far-reaching market wide free prescription service in Columbus, Ohio,” said Giant Eagle spokesman Dan Donovan. “To date we have offered the service in select locations in other markets. Our current focus is to ensure the program’s success in these stores, and at this time there are no plans for additional broad market expansion.”

Read more: Giant Eagle Offers Free Antibiotics

Wegmans Food Markets, Rochester, N.Y., recently began offering free 5- to 7-day shipping nationwide on prescription orders placed in-store or via Wegmans Pharmacy Online, which enables users to sign in, refill a prescription, check their order status, and set up automatic refills on their desktop. Express delivery (1-2 days) costs $ 18.95.

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The Lempert Report: Online Delivery Is a Battle for Speed (Video)

Marketing analysis, issues and trends from Supermarket Guru Phil Lempert View Weekly Videos About New Products Phil Lempert produces weekly videos and comments on product marketing analysis, issues and trends and reviews the impact on the food and retail environments. View Videos Read recent Viewpoint columns from Phil Lempert  

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Instacart Delivery Service Expands to Chicago

SAN FRANCISCO — Instacart, the same-day delivery service that uses a fleet of freelance shoppers to pick up and deliver items from local supermarkets to consumers, has expanded from its home base here to Chicago, the company said Tuesday.

The service has launched in 13 Chicago neighborhoods offering groceries from Trader Joe’s. In the coming weeks, Instacart said it expants to also offer groceries from Safeway’s Dominick’s banner, Costco Wholesale and Whole Foods Market — the same companies Instacart sources from in California.


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Chicago is the home market of Ahold-owned Peapod, one of the pioneers of online grocery. It is the first of 10 major cities Instacart plans to expand into by the end of 2014, the company said. It recently received $ 8.5 million in funding from Sequoia Capital and others to assist in its geographic expansion.

“We look for urban areas with tech-savvy consumers who may not have cars and value convenience,” said Apoorva Mehta, chief executive and founder of Instacart. “Chicago fit the bill. We’re really excited to expand our footprint beyond San Francisco. There’s a lot more to come.”

The first 13 Chicago neighborhoods where Instacart is available are: Lake View, Lincoln Park, Logan Square, West Town, Near West Side, Lower West Side, Near North Side, Loop, Near South Side; plus portions of Douglas, Bridgeport, Amour Square and McKinley Park.

Read More: Same-Day Delivery Start-Ups Prepare for AmazonFresh

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Instacart Delivery Service Raises $8.5 Million

SAN FRANCISCO — Instacart, a seven-month-old service here that offers same-day delivery of groceries from multiple local stores, announced that it has partnered with Sequoia Capital and raised $ 8.5 million in Series A funding.

The round was led by Sequoia with additional participation from Khosla Ventures, Canaan Partners, SVAngel and Paul Buchheit, creator of Gmail. Michael Moritz, chairman of Sequoia and former Board member of Webvan, has joined the Instacart Board of Directors.

Instacart plans to use the proceeds of this round to fund expansion beyond the San Francisco area, with a goal of being in at least 10 major cities across the U.S. by the end of 2014. The service is currently available in San Francisco, Oakland, Berkeley, Mountain View, Palo Alto, Menlo Park and Sunnyvale, Calif.

Instacart’s model relies on a crowdsourced labor force that shops for and delivers grocery orders using their own vehicles, with one-hour or two-hour delivery options. Instacart said it keeps track of the price, location and availability of thousands of individual grocery items in the local stores in which it shops, to help its personal shoppers be as efficient as possible and enable rapid delivery.

“We’re really excited to be working with the Sequoia team, who bring extremely valuable and relevant experience to the table,” said Apoorva Mehta, chief executive officer and founder of Instacart, in a statement. “Now that we have our San Francisco operation up and running and we have a great formula for success, it’s time to turn our attention to national expansion.”

Instacart said it plans to target other dense urban areas for its service, including New York, Chicago and Boston, where convenience is valued, many residents don’t have cars, and the crowdsourcing model is already familiar and accepted.

Earlier this month, Instacart launched Instacart Plus, a new option that offers customers the lowest possible prices on national-brand grocery items.

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