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Amazon to Launch Online Grocery Store 260

Aryabhata writes "It might sound like a bad flashback to the dot-com days, but news is that Amazon is planning to test the waters with an old idea; the online grocery store!. To its defense Amazon is only attempting this with nonperishables like peanut butter, potato chips, and canned soup implying that there's no refrigeration required--ordinary warehouse shelves will do fine."
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Amazon to Launch Online Grocery Store

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  • by Distinguished Hero ( 618385 ) on Sunday June 18, 2006 @12:37PM (#15558364) Homepage
    To its defense Amazon is only attempting this with nonperishables like peanut butter, potato chips, and canned soup implying that there's no refrigeration required--ordinary warehouse shelves will do fine."
    Well, in that case, it isn't different from what Amazon was doing before hand, now is it? Amazon to Sell Stuff Online, Film at 11.
  • Peapod (Score:5, Informative)

    by Anonymous Coward on Sunday June 18, 2006 @12:37PM (#15558366)

    I've never heard of this WebVan company, but the online grocery store that I do know - Peapod [peapod.com] - is still around and, going by how often I've seen their vans parked in some residential neighbourhoods around Chicago, quite successful. And they do deliver perishables.

    • And the others... (Score:5, Informative)

      by williamhb ( 758070 ) on Sunday June 18, 2006 @02:22PM (#15558665) Journal
      Not to mention tesco.com and ocado.com in the UK (Very successful national online grocery stores run by ... two of the UK's biggest grocery store chains), and the many online organic food delivery box companies running in the UK. Honestly, guys, if "online groceries" gives you flashbacks to 2000 then you are about six years behind the times...
      • by JulesLt ( 909417 ) on Sunday June 18, 2006 @03:34PM (#15558854)
        I would have mentioned the same (most of the major UK supermarkets do delivery) but the US is a very different market, as brought home to me by someone telling me how their nearest Walmart / major town was . . . 50 miles away. What makes the model work so well in the UK is that most of the population live close to an urban centre.

        Amazon also love the UK for that - apparently we're one of their best markets because most things get delivered next day.
        • The "our population is too spread out for that" argument that people tend to throw around about the US whenever something like this (or the lack of public transport) is brought up is bullshit.

          According to the US Census Bureau, about 222 million people in the US lived in urbanized areas, meaning more than 2/3's of the population, and a market 2.5 times larger than any single European country (Germany is at about 80 million people).

          The US' 50 largest cities alone make up a larger market than most European

          • Population Density (Score:4, Informative)

            by Otto ( 17870 ) on Monday June 19, 2006 @01:25AM (#15560157) Homepage Journal
            "Urbanized areas" is a pretty loose term. Do they mean urbanized like NYC? Or urbanized like Dallas, TX?

            I used to live near Dallas/Fort Worth. You can drive 200 miles there and never leave an "urban" area, if you drive it East/West. Even North/South it's about 80 miles.

            NYC's density is 26720 people per square mile.
            Chicago's is 12604/sq mi
            London's is ~12071/sq mi.

            On the other hand...
            Dallas' is 3534/sq mi.
            Memphis' is 346.9/sq mi.

            So you see, there's a bit of a difference there. Driving distance is indeed a factor for a large portion of the population. You really need a certain density to support this kind of thing on a local level.

            Several stores have tried it in the past and failed. Kroger tried it in a few test markets. I was in Huntsville at the time they tried it there, but it only lasted about 6 months. They couldn't get enough people to use it to make it worth hiring more drivers, and they couldn't get the groceries to all the people in enough time to make more people want to use it.
        • Not exactly (Score:3, Interesting)

          by grahamsz ( 150076 )
          My parents live about 9 miles from the nearest supermarket, in a relatively rural area. They have, I believe, three supermarkets that will deliver.

          I live in an suburban area of Colorado, and only 5 miles from the nearest supermarkets and yet I can't get a single supermarket to deliver. Apparently i'm too far out!?

          I think it has a lot more to do with the US tendency to drive. Many people in the UK find 18 miles r/t too far to drive to pick up a few items - yet in the US that's nothing.
    • Re:Peapod (Score:3, Informative)

      by kilodelta ( 843627 )
      That's because Peapod pulls from regular Stop & Shop stores and distro centers. They also have agreements with other grocers in areas where Stop & Shop isn't prevalent.
  • by Zaphod2016 ( 971897 ) on Sunday June 18, 2006 @12:38PM (#15558367) Homepage

    If online grocery shopping gives you flashbacks to failed experiments like Webvan, you are not alone.

    In fact, here they come now...

    • HomeGrocer.com used to be so cool. It was like living in the space age having the truck pull up and all those yummy groceries delivered straight to the kitchen table.

      Seeing them fade away with all the other wacked out .com ideas was such a shame.
  • by Nybarius ( 799156 ) on Sunday June 18, 2006 @12:38PM (#15558369)
    It's called Fresh Direct [freshdirect.com].
  • by demongeek ( 977698 ) on Sunday June 18, 2006 @12:39PM (#15558375)
    Ways to dispose of hundreds of thousands of dollars of junk food left over from the cafeteria....
  • by Anonymous Coward on Sunday June 18, 2006 @12:39PM (#15558376)
    They could make money selling hard to find items, but not stuff that you can buy anywhere. There are a few things I can not buy locally that I would order if they had it, but I won't buy potato chips from them...

    Of course, if this works then I should invest in UPS & FedEx...
    • by Mullen ( 14656 ) on Sunday June 18, 2006 @12:58PM (#15558450)
      Agreed. I have always thought that someone could do pretty well selling hard to find items food items. There are probably a bunch of people who love food or food items that you just can't get where they currently live. I know there are a bunch of companies that do such on Amazon.com.

      For example, I listen to Howard Stern and one his side kicks, Artie Lange, likes "Devil Dogs". I have never seen these things and it turns out you really can't get them on the West Coast. However, a quick search and I found a couple of places that will ship them out to me.
      • This is pretty much what Amazon is doing. They're currently only carrying rather high margin "premium" foods. For example, there's only one Campbell's soup in the soup section (and it's currently not available), the rest is full of Wolfgang Puck's brand of soup. Basically, rather than waste their precious warehouse space on low margin foods, they'll let the local stores do that while they sell you expensive food. So if you were expecting an Amazonian discount on ramen noodles, well, I might suggest a Costco
      • There are a number of web stores out there who sell hard to find or gourmet items online. In fact I believe either Amazon itself or some of its partners are already selling gourmet foods.

        The trick is to sell things where you aren't competing with local grocery stores or where volume can give you a huge price advantage.
      • Devil Dogs are gross. Save you cash and try a SUZY-Q from Hostess.

        Trust me- my left arm tingles all the time.
      • cf http://www.cybercandy.co.uk/ [cybercandy.co.uk] (in the UK). A fantastic site - the only reliable UK supplier of liquid smoke that I have yet found, amongst other things...
    • Of course, if this works then I should invest in UPS & FedEx...

      My first reaction was, surely they'll be teaming with local grocery store chains to do this? But no:

      Amazon will ship these things out the same way they ship everything else, through established shipping services like FedEx or UPS, so there's really no change in the infrastructure other than stocking a few thousand new products

      Maybe I'm crazy, but I can't see UPS shipping a box the size of a grocery cart for a price I would pay. The b

    • They could make money selling hard to find items, but not stuff that you can buy anywhere. There are a few things I can not buy locally that I would order if they had it, but I won't buy potato chips from them...

      And I want them to sell me food I can buy locally by striking deals with local stores. I could shop online for what stores in my town sell and have it delivered in the next 24 hours. If they combine deliveries, it would cost less than FedEx. The grocery store gets a competitive advantage, Amazo

      • I want to be able to go online, check off everything that I need for the week at my local grocery store, head over there 20 minutes later with it bagged and ready (and still have the ability to pick up my own fruit while I'm there so it isn't bruised etc.).
  • So? (Score:5, Interesting)

    by ToddML ( 590924 ) on Sunday June 18, 2006 @12:40PM (#15558379)
    I already routinely order groceries from Fresh Direct http://www.freshdirect.com/ [freshdirect.com] . Its huge in the NYC area, the selection is broad (far broader than what Amazon is offering), the service is excellent, and the overall experience is excellent.
    • Re:So? (Score:4, Interesting)

      by Pink Tinkletini ( 978889 ) on Sunday June 18, 2006 @01:16PM (#15558503) Homepage
      Oh, sure, until the day the FreshDirect guy sticks his foot in the doorway [gothamist.com] and won't leave until you tip him. :-P Wasn't their policy originally not to accept any tips, ever, expressly to prevent situations like these? Or am I thinking of someone else (Kozmo, MaxDelivery)?

      But I agree, on the whole, the FreshDirect experience is hard to beat. Did you ever see those signs at Fairway hanging from the ceiling, bashing FreshDirect and its owner for various injustices apropos nothing? Priceless.
      • I just had to add this little gem from New York magazine, courtesy Wikipedia [wikipedia.org]:

        The FreshDirect posters blaring that the company was BROUGHT TO YOU BY A CO-FOUNDER OF FAIRWAY UPTOWN and featuring a photo of Fedele made [Fairway owner Howie] Glickberg furious. He posted signs inside the 74th Street store reading FAIRWAY IS IN NO WAY AFFILIATED WITH FRESHDIRECT. FreshDirect jabbed back by sending staffers dressed as giant fruits and vegetables to pass out flyers in front of Fairway. Then the FreshDirect Websit

    • Re:So? (Score:2, Redundant)

      by jb.hl.com ( 782137 )
      And in the UK there's always Ocado [ocado.com].
      • Most UK food retailers have an internet shopping arm, and most of them are profitable. I guess it's the greater population density that makes it economically viable in the UK, but not the US (outside the major cities, anyhow).
    • Re:So? (Score:4, Insightful)

      by Geekenstein ( 199041 ) on Sunday June 18, 2006 @01:39PM (#15558563)
      Remarkable. You're comparing a company that delivers to a very, very small area of the country to a multinational company that ships just about anywhere.

      What precisely was the point to your post?
      • Well, if this place delivers to the greater new york area, then he is talking a company that reaches about 1/13 of the US population, so I will give it to him. And I really doubt that Amazon is going to offer their plan on a multinational basis. They don't offer DVD players on a multinational basis, try to hit Amazon in canada. They don't sell crap there.
      • Re:So? (Score:3, Informative)

        by ces ( 119879 ) *
        http://www.safeway.com/ [safeway.com] and http://www.albertsons.com/ [albertsons.com] offer home delievery in most of the areas they have stores. That would be Amazon's real competition along with other local grocery stores.
        • I believe Dillons [dillons.com] does as well. Wal-mart Pharmacies in some areas do deliveries to the eldery as well. My siste did that during college.
  • mostly items in bulk (Score:5, Informative)

    by jwachter ( 319790 ) <wachter@NOspAm.gmail.com> on Sunday June 18, 2006 @12:41PM (#15558381) Homepage
    FYI, if you browse through the store, you'll notice that almost all the items they sell are economy sized or are packaged in multi-packs. If you just want one bottle of detergent, you're out of luck. If you want to save on 6 bottles at a time, this is the place for you.


    • Finally I can buy a 24 pack of dish detergent AND get free shipping!
  • Why a flashback? (Score:5, Informative)

    by radish ( 98371 ) on Sunday June 18, 2006 @12:42PM (#15558388) Homepage
    I've been buying my groceries online for years, and I intend to continue doing so. The food is better quality, there's more choice than my local supermarket and it's way more convenient. In my area right now there are 2 competing online services (that I'm aware of, might be more) so there's even a choice. I'd assumed this kind of service was available everywhere - I guess not.
    • I've always been curious but never given it a try. I work swing shift so I'm out of work too late to hit the grocery most days.
      • Really? In recent years just about every grocery store I've been to is 24 hours.
      • In the US, FreshDirect.com are great so if you're in an area they serve try them. Otherwise, ShopRite supermarkets (tri-state area) deliver and most accept orders online. In the UK I used to use Ocado (linked to Waitrose) which was excellent, I've also used Tesco online which was fine as well. I've really had very few really bad experiences with any of the services I've used over the years.
  • by Orange Crush ( 934731 ) on Sunday June 18, 2006 @12:43PM (#15558391)
    Amazon already has a gourmet food store [amazon.com]. This seems like a logical extension to me.
  • by Opportunist ( 166417 ) on Sunday June 18, 2006 @12:45PM (#15558402)
    I mean, ok. When I order a book and find out there's a movie about this book, maybe I order it as well (or the other way 'round). When I order a computer game based on a movie, it makes sense to try to bundle it with the movie (or a "collector's edition" of the DVDs).

    Now where does peanut butter come into play? I mean, I somehow CAN see certain porn movies and peanut butter, but it's not really the thing that comes to my mind when I start browsing Amazon. Where's the synergies? When did it happen to you the last time that you wanted to buy a book and realized "Hey, I also need noodles!"?

    Books, movies, games, makes sense. Groceries just don't fit into the fold.
  • If only... (Score:3, Funny)

    by brian0918 ( 638904 ) <brian0918@NoSpam.gmail.com> on Sunday June 18, 2006 @12:47PM (#15558408)
    Now, if only they could find a way to get the food through the computer, and stuff it right into my face, I wouldn't have to do all that damn walking...
  • it might work out ok. But unless they can cut some serious deals with FedEx/UPS/USPS, shipping and handling for bulk detergent is going to be expensive. Still, its better than having to deal with the smelly and crowded walmarts around here.
  • plenty in the UK (Score:5, Informative)

    by mr.e ( 182543 ) on Sunday June 18, 2006 @12:53PM (#15558428)
    In the UK tesco (www.tesco.com) have been doing online groceries for years - as have Ocado.
    • Re:plenty in the UK (Score:4, Informative)

      by 10bellies ( 978724 ) on Sunday June 18, 2006 @01:26PM (#15558523)
      Iceland, Asda, Sainsburys...the list goes on. This is nothing new in the U.K. and I'm surprised it's not being done in the States.
      • It is being done in the states. Like the UK big grocery chains US chains such as Albertson's (#2 US grocery retailer) and Safeway (different company from the UK Safeway) (#3 US grocery retailer) have been offering online shopping and home delievery for a while now.

        However it does seem that few actually use this service. Probably the 2 biggest customers in this area are businesses ordering for employee snacks and people living downtown who don't own cars.
  • by iabervon ( 1971 ) on Sunday June 18, 2006 @12:54PM (#15558431) Homepage Journal
    Amazon already also has partnerships where they set up transactions with other businesses (e.g., their whole used-book system). In some places (e.g., Boston) grocery chains are still doing online orders and deliveries. (It has a reasonable ROI if you already have the food storage; delivery people and a web site to get the segment of the market that just wants food to show up.) So the next step is for Amazon, after you've specified your location, to offer fresh food if they've got a partner in the area. I don't see it leading to a loss for either business, relative to the status quo, so it's a perfectly plausible move.
  • by WinEveryGame ( 978424 ) * on Sunday June 18, 2006 @01:01PM (#15558463) Homepage
    Hmm.. I wonder what they will deduce from correlating my reading habits with my eating habits.
  • by cperciva ( 102828 ) on Sunday June 18, 2006 @01:01PM (#15558465) Homepage
    I really don't think this makes sense.

    If there's one type of goods which I would like to order online and have delivered to my door, it is bulk goods. A box of 12 1L cartons of orange juice; a dozen 2L bottles of diet coke; a 4 kg box of laundry detergent. These can sit on my shelves for months, but they're bulky, heavy, and generally annoying to handle. I'm doubt I'll ever buy tonight's dinner from an online grocery store, but I would be very happy to buy next month's laundry detergent.

    Unfortunately, the very nature of these goods which makes me want to order them online and have them delivered makes them impractical for a company like Amazon to handle. Products like this tend to be are at the very low end of the $/kg scale; they are exactly the sort of products which need to be shipped in large quantities to local warehouses and then delivered locally -- not packaged into individual deliveries at a central warehouse and then shipped separately halfway across the country.

    The reason an online bookstore works so well is that the book market is characterized by low turnover, high profit margins, and high $/kg ratios. Grocery stores have high turnover, low profit margins, and low $/kg ratios. Trying to apply a solution designed for bookstores to the grocery store area simply won't work.
  • Meanwhile, in the UK (Score:3, Informative)

    by BristolCream ( 102658 ) on Sunday June 18, 2006 @01:18PM (#15558504)
    ...every major super market offers an online grocery service. I have five available in my area. They're fast (next day, some same day), accurate and cheap; £5 for delivery last time I checked. Some even bringin the shopping and put it away for you.
    • I wonder if this isn't common across most of Europe. It is at least in Spain.

      In addition to internet ordering the major grocery chains in Spain (two of the largest are actually French and German owned) offer other creative options. I for example found I didn't particularly like shopping for groceries online. There were too many things I wanted to see and select in person: fresh fruit and vegetables, meats, cheeses, etc. But I also found I didn't like lugging my groceries home on public transit so I would sh
  • This is a terrible idea, not because of the groceries, but because of the limitations on it.

    Who really wants to shop for 1/2 their groceries online, and the perishables in the store?

    • Also, who really wants used peanut butter? I don't want my food in the condition of "Used - Good."

      Harry Potter reference link [amazon.com] (Sorry, it was the first thing that popped into my head for which to search)
    • People who want to stock up on large amounts of the non-perishable stuff once a month or so and buy only the perishables whenever they drop by the store. I could see this doing much better in Europe where lots of people don't drive/don't want to drive/use public transport and drop by the store on foot on the way too/from work without a car for instance. I do almost all my shopping on foot, and ordering non-perishables in bulk might be tempting. I already have the option, though, as all the major chains in t
    • If you live in the city and don't have a car, getting the big bulky stuff home is a pain in the ass. When I lived at PSU, I often biked down to the safeway to pick up fresh meat and veggies and did the "buy bulk stuff all at once" every month or so in my car. Having a car there was a bit of a pain in the ass because the meter maids constantly issued fraudulent tickets, etc. Could see this as being a kick ass thing for college students - especially is amazon prime covers it. Besides - most college students e
  • Amazon is only attempting this with nonperishables like peanut butter, potato chips, and canned soup

    What other kind of food is there? I know not of this 'perishable' food.

    -Grey [wellingtongrey.net]
  • Peapod [peapod.com] is still going strong in Chicago, perishables and all, and they seem to be in other markets as well. mt
    • Peapod is alive and well here in DC/Northern Virginia as well, they partner with the Giant [giantfood.com] stores in the area. Used them a few times since I moved here....Aside from forgetting an item once, they've been pretty decent.

      That said, even though they deliver perishables, I wouldn't use them for produce or any non-ground meat.
  • Just to add another to the list of people saying "Flashback? Huh?" I live in the Dallas/Fort Worth area of Texas, U.S.A. and order all my groceries from Albertsons.com, perishables included. They deliver in refrigerated trucks.

    Still, even without refrigerated local delivery, there've been places shipping non-perishable food items for a while now. Just google for "groceries."
  • Click and Motor (Score:3, Insightful)

    by Doc Ruby ( 173196 ) on Sunday June 18, 2006 @01:46PM (#15558576) Homepage Journal
    Fresh Direct is popular, and apparently successful, in densely populated neighborhoods like mine in NYC. Even though there are grocery stores sync'ed to the local neighborhood within a few walking blocks, all over the city.

    Some competition from Amazon might force down the prices, and produce some new innovations for better service. And it will double the number of doubleparked giant delivery trucks clogging previously residential-only streets that rarely took deliveries.

    These delivery services should deliver only after 8PM, when people are at home, and traffic congestion is lighter, and the double/parking has settled down. Getting that setup for residential zones would help make it more obviously better in commercial and mixed zones. Eventually we can have deliveries only between 8PM-6AM, and use the full capacity of our roads, even increasing it by lowering wasteful congestion.

    A great combination of efficiency and convenience, at every level.
  • In the SF Bay Area, Safeway and Albersons [sfgate.com] already offer full online shopping to the door, ala webvan and have been for a little while now. Like a lot of web ideas that died during the Crash, but are doing fine now and just needed some time to get the model right and more penetration, this seems like a pretty obvious/good idea. The earlier guy was talking about NYC having similiar services.

    I suspect that this is something that makes a lot more sense on a metro by metro basis, hooked into existing stores just
  • If they'd only do this for beer, wine, and liquor.
  • by DavidD_CA ( 750156 ) on Sunday June 18, 2006 @01:57PM (#15558605) Homepage
    We should all boycott this new venture. They do not sell Mountain Dew!
  • by Tim C ( 15259 ) on Sunday June 18, 2006 @01:59PM (#15558608)
    The main difference being, of course, that they're already in the grocery business, and so have no problems with perishables. In fact, I ordered my groceries online from Tesco earlier; it's so much quicker and more convenient than actually going there. Of course, you have no control over the quality of the fresh items that are picked (although I generally have no complaints). Also, if they don't have something you ordered they'll substitute something similar, which isn't necessarily to your taste. You're entitled (expected, really) to refuse anything you don't want though if that does happen.

    There's a charge for the service, of course (about 5 pounds), but it saves so much time and hassle it's generally worth it (not to mention that it massively cuts down on the temptation to impulse buy).
    • Safeway does it here. And Peapod also offers a service.

      I see the employee shoppers in Safeway a lot. They have these carts that know what they are to buy, and route the person on the shortest path through the store to pick up each item, and tells them which items to buy and which bin to put them in (since they shop for a couple people at once).
  • Pushed by Google? (Score:3, Insightful)

    by ikejam ( 821818 ) on Sunday June 18, 2006 @02:03PM (#15558621)
    I can't help think that they've been pretty much forced to expand their services while they can.

    Even now, if I were to buy a book, I'll just google it and find the amazon link from there. Thats advertisement expense that Amazon is losing right there - more importantly Amazon has stopped being my first resort for book searches though majority of my purchases might be still from there. Amazon would probably want to gain that "first site you go to" share. And if they stick arnd with just books, whereas google offers everything (including Amazon links - which obviously they cant afford to take out), they might start to lose a bit of relevence. And obviously google's plan to scan the worlds books is a very visible threat.
    • And if they stick arnd with just books, whereas google offers everything (including Amazon links - which obviously they cant afford to take out), they might start to lose a bit of relevence. And obviously google's plan to scan the worlds books is a very visible threat.

      I suggest you go look at Amazon - they sell quite a large variety of stuff. Books, Video, Sporting goods, clothing, gems, electronics, Badonkadonk, cosmetics, watches - you name it. The one thing they seem to shy away from are things that r

  • by PeeAitchPee ( 712652 ) on Sunday June 18, 2006 @02:25PM (#15558670)

    These types of goods are commoditized to the point that no one -- not even Amazon -- will be able to gain significantly better economies of scale than are already present. The margins are just too thin. As others have mentioned, Amazon is already at a disadvantage because of the shipping.

    Most of the traditional grocers gave up on trying to compete with Wal-Mart on price long ago and are looking for new ways to differentiate the customer's shopping experience instead. Been in a Wegmans [wegmans.com], Whole Foods [wholefoods.com], or one of the new A & P "Fresh" format stores (A & P Fresh, Waldbaums Fresh etc.)? It's all about ultra-impressive super-clean 100K+ sq. ft. stores, organic foods, in-store cafes, etc. coupled with a progressive (for retailers anyway) use of technology. With many traditional low-end grocers going under, selling off large numbers of stores or re-orging (Winn-Dixie, Food Lion, etc.), the rest are content to let Wal-Mart have the low-income demographic and aim squarely at capturing upper-middle class and above shoppers' dollars. These shoppers have proven that they're willing to pay a bit more for a high-quality shopping experience. Amazon's approach will add some more content to their own store (the ultra-important "long tail") but will have little effect on the grocery biz.

    Disclaimer: I work for a retail software vendor.

  • you could post reviews for your groceries? Because if yes, we can and will annihilate the TV dinner business.
  • Used & New (Score:3, Funny)

    by pajamacore ( 613970 ) on Sunday June 18, 2006 @02:50PM (#15558745)
    I'm okay with this idea so long as there isn't a Used & New grocery section, like for the other items they sell.
  • by siriuskase ( 679431 ) on Monday June 19, 2006 @12:20AM (#15559992) Homepage Journal
    Every top ten item is a diaper, #11 is Bounty towels which I suppose could be used as diapers, then it is back to diapers again until the fertility test #14 and razors at #15, then it's all diapers and babywipes again to round out the top 20.

    http://www.amazon.com/exec/obidos/tg/new-for-you/t op-sellers/-/grocery/16310211/102-8388649-7401761 [amazon.com]

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