Dan Bulwinkle

Grocery & Meal Delivery

23 April 2017
3 minute read

Why Don’t Grocery Delivery Services Have Inventory?

I still go to the grocery store in part for the experience and the discovery process. Often times, however, I’ve wished I could just skip the store and have the groceries appear within a day. The problem with that is then I need to sign up for some delivery service and still spend time paging through an app to find dozens of necessities.

I have tried a few services including Instacart and Amazon Now, and both worked out fine except for the economics. On top of the cost of groceries is an added percentage, fee, and tip. What’s hard for me to understand is why these companies aren’t able to tap into the fixed costs of a traditional supermarket. While supermarket net margins tends to be around 1.7%, gross margins are in the 20% range.

There are over a dozen Safeway supermarket stores in San Francisco

Considering the costs of real estate, utilities, employees, logistics, and insurance, it seems there should be enough for this service:

  • Instead of 15 stores, situate 3 warehouses in the vicinity of Excelsior, Dogpatch, and Inner Sunset (i.e. highways and center of mass)
  • Automate the warehouses so that pallets come off the trucks from supplier and are robotically transported to their row and bin; individual items are robotically retrieved to fill a shopping bag
  • The store employees are now delivery drivers. Bags are robotically loaded into the vans so the driver just has to get in and follow an efficient route and unload the bags to homes, offices, car trunks, &c.

The above seems reasonably doable, so I wonder why no one does it. Even if certain aspects aren’t automated from the start, it can be done over time.

What about perishable items? I think instead of bags reusable crates could be used with built in icepack. Since I consistently demolish large boxes from Amazon I’m not sure why they haven’t gone reusable yet, though with their own fleet it seems likely to be on their roadmap.

What about stolen groceries? I think stolen groceries would be about as likely as stolen Amazon packages. Some neighborhoods may be more susceptible, especially in San Francisco, so having items delivered to work or a car trunk may be a solution.

Lastly, if the vision weren’t already over the top, I think combining groceries with a “chef meal” service makes sense. That is, you get chopped vegetables and other ingredients along with a recipe so you can make a fancy dinner with ease. Maybe this would be a premium service, but hopefully far cheaper than current services with this offering.