Another Online Grocery Service Bites the Dust
The consortium led by the Cerberus Group that took part of the Albertsons chain private is closing down the company’s online grocery and home delivery service.
Speculation is the supermarket chain took this step because it was simply not making money (or at least not enough) to justify continuing with the service.
George Whalin, president and CEO of Retail Management Consultants and a RetailWire BrainTrust panelist, told the San Jose Mercury News, “I’d heard it’s been struggling
for some time. I think online is not necessarily a viable way to sell groceries.”
Albertsons LLC called the move “a strategic business decision” and refused to comment on the profitability of the discontinued service.
According to Quyen Ha, a company spokesperson, Albertsons made the move “to make sure we have the best in-store shopping experience. We think this will allow us to concentrate
our resources and capital on store enhancements.”
Albertsons LLC’s decision to close its online grocery and home delivery service opens things up for others in markets where the company has stores.
Safeway, for example, said it would continue to operate its online and delivery service.
Jennifer Webber, a spokesperson for Safeway, said, “We’re very pleased with safeway.com, and the response from customers has been great. Safeway.com is something we are committed
to and a service we are happy to be able to provide for our customers.”
Supervalu, which purchased the greatest number of Albertsons stores, appears committed to continue online ordering and delivery in markets where the service is offered.
Shannon Bennett, a spokeswoman for SuperValu, told The Idaho Statesman, “Online grocery shopping is another channel through which we are able to deliver convenience to
our customers, and it will continue to be an important part of our business going forward.”
Discussion Question: Does the value of online grocery and home delivery or store pickup services go beyond the actual dollars and cents profits these
operations deliver to a supermarket’s bottom line? What are commonalties shared by the (apparently) successful online services that make them so?
- Albertsons to abandon online home delivery – San Jose Mercury News (free reg.
- Boise firm drops online groceries – The Idaho Statesman