Research purposes... If a company can buy

[buzz words]

If a company can buy and deliver grocery's (exactly what you want) including delivery charge cheaper than you could or at the same price as driving to the grocery store would you use them and why or why not?

I am studying the market.  Your answer's help a lot.

[inteller]

quote:Originally posted by buzz words

If a company can buy and deliver grocery's (exactly what you want) including delivery charge cheaper than you could or at the same price as driving to the grocery store would you use them and why or why not?

I am studying the market.  Your answer's help a lot.

are you the moron behind http://www.carpe-diemonline.com/?  I hope you give the delivery drivers to north Tulsa bullet proof vests.

[swake]

Your concept is in trouble. Food Pyramid's parent company offers online ordering with delivery in their other markets and have said they plan on doing the same here in the near future. Reasor's would probably quickly follow suit.

[spoonbill]

quote:Originally posted by buzz words

If a company can buy and deliver grocery's (exactly what you want) including delivery charge cheaper than you could or at the same price as driving to the grocery store would you use them and why or why not?

I am studying the market.  Your answer's help a lot.

Why yes I would!  In fact if someone could show me a business plan where that would actually work (numbers) than I would invest in it too (if the numbers actually worked, Jeff Reasor would be doing it right now!)

However, I can't see how a company that has to warehouse groceries, not charge shelf-lease to suppliers, and physically deliver custom sorted product accuratly could be competitive with Walmart or Reasor's.  

The only company that has done a home delivery system on this scale is Pea Pod  (www.peapod.com).  They however are not less expensive.  They rely on cities with very high population density where a trip to the grocery store is an ordeal.  We don't have that problem.

This has been tried before in Tulsa.  Back in the 80s, Sipes, Safeway, Petty's and a few others, all had delivery service.  It was not internet driven, but it became too costly from a labor standpoint to operate.

Grocery stores operate on an extremely thin margin.  They rely on volume to drive profit.  Wal-Mart Neighborhood Market averages around 2.5% gross profit on shelf stock.  Albertson's (Food Pyramid) is about 5.1% gross profit This means that a $50 load of groceries is worth about $1.25 to 2.55 in profit.

These stores also charge something called shelf rental for products that are not high volume.  For instance Daddy Hinkle's Steak sauce has to pay, to have it's product on the shelf.  If Daddy Hinkle does not see enough volume in the movement of it's product to justify the shelf rental, it will pull it's product to avoid loss.

So, as I see it, this concept can not charge a shelf rental because it cannot justify sales numbers until it's been in business for a while and can present real numbers.

$50 in groceries would cost somewhere near $2.00 in labor to sort, bag, and process paperwork.  Delivery would cost at least $3.00 to $4.00 for delivery (driver, fuel, windshield time, time at residence, spread over 20 deliveries).

So if you are making less than $3.00 profit on a $50 delivery that costs you $6.00, I forecast that you will have to increase your gross profit to at least 9% or 10% to make a the equivalent profit of a modest grocery store chain.  You will also have to do the volume to make enough profit for it to  be worth while.  Example:

If you do 54.7 individual deliveries every single day of the year with average delivery price of $50, you will sell $1,000,000 in product.  Subtract your labor and fuel, and you will make a yearly profit of only $51,000. (this is based on a single driver and single employee model.  Additional employees would force additional volume to work)

Simply not enough to make the balance sheet attractive.  So you would probably have to render a profit margin of more than 20% to make this a viable business.  Unfortunately this will kill your volume because you will not be competitive.

[swake]

Food Pyramid's parent in Springfield delivers. They charge $5 to gather and bag your food for you for pickup and $10 for delivery.

http://www.pricecutteronline.com/online.php

[cannon_fodder]

I might from time to time.  A large factor would be the lag time between order and delivery - but if the thought crossed my mind I probably would.  In my household though, groceries are a kind-of spontaneous item "hey, we need to get groceries."

Two recommendations:

1) If possible list or elude to competitors pricing in some manner.  It is hard to get a feel for the product online - size of the container and such.  "Standard size 16oz Ketchup" or whatever might be psychologically helpful.

2) related items.  Suggest related items, if someone buys hotdogs suggest buns. Etc.  Also have some "special" items that might be common.  I'm kinda worried I'd forget things if I bought online.

I would at least try your service.  BUT, can we keep the market research/comments on your venture to a minimal of threads?  It seems to be spreading all over the boards.

[buzz words]

Great feedback.

     So the instance where groceries are bagged and held at $5.00 or delivered @ $10.00 do you think that that is a good deal?

[Ibanez]

Would this service deliver Spam?

[sgrizzle]

quote:Originally posted by buzz words

Great feedback.

     So the instance where groceries are bagged and held at $5.00 or delivered @ $10.00 do you think that that is a good deal?

That would be a doable price considering it's not unheard of to spend an hour $100 on groceries and that would only be 10% or $10/hour

[Conan71]

quote:Originally posted by wavoka

Would this service deliver Spam?

Thanks for the opportunity to pull out one of my old favorites:

[Conan71]

You didn't ask for criticism, just yes or no.

Yes, I definitely would for the same price as long as it's reliable and they get all the items I request every time.  Nothing would torque me more than to have to go pick up something as I was making a meal which was ordered and not delivered.

I might even pay $10.  I often have too many things to get done in one day so the more help I can get, it might be worth paying someone $10 plus a tip to do the groceries for me.

If you are serious about getting into such a venture and want to maximize profit, I was thumbing through TCC's spring community ed guide and they actually have a course which will show you how to shop and save up to 50% on your grocery bill.  Something to think about if you are serious.

[NellieBly]

Personally, I prefer to choose my own groceries. I have run across too many expired products on grocery store shelves to trust a surly high school kid to do my shopping. Even at Reasor's you find skim milk that expires in four days then right next to it, skim milk that expires in 12 days. Big difference. There is also a huge difference in price on different brands.
I can see this sort of service being used by the elderly or uberlazy folks, but shopping for products is very subjective.

[spoonbill]

quote:Originally posted by buzz words

Great feedback.

     So the instance where groceries are bagged and held at $5.00 or delivered @ $10.00 do you think that that is a good deal?

With that model, since your profit would not be linked to margin on product, you would be better off just operating a van parked outside of a Wal-Mart and run the business on delivery alone.  

You could conceivably run a single van with 50 deliveries a day (aprox 100sq./ft. of groceries, 2 sq feet per order).  Labor for one driver would be $64 dollars (he could accept tips too and you could drop your labor cost significantly).  $120 daily fuel allowance.  Around $30 a day in vehicle depreciation. At $10 delivery charge, you could pull around $286 every day with a single employee.  That would be doable.

[si_uk_lon_ok]

I've paid for groceries to be delivered before and I really liked the idea. Although I don't anymore.

At the time I lived a mile or so from the nearest supermarket, which wasn't on the way to anywhere and I didn't have a car. It made a lot of sense to order groceries, although I only did it once a month for heavy goods and non perishables.

I paid about $10 for the privilege, the goods were delivered in a two hour slot and were picked from a database on the supermarkets own website. This meant I had the full range of all the goods in the store, including loose fruit and vegetables and all at the same price as in the store, I'm not sure I would have paid extra on the food for it to be delivered. The delivery was always promptly and in a refrigerated van with a freezer section and what was nice was they showed you any replacements they had made if the goods you had ordered weren't in stock you could except or decline it their alternatives.

I don't do it anymore though as I walk past the supermarket on my way to work. I also brought down the cost of the delivery by splitting the order with some friends who lived locally and I never used the most expensive delivery slots as I was a student and often at home in the day. There were also consumer reports though that said as the whole thing was run by the supermarkets you wouldn't get the best fresh goods and the other products would be the ones nearing the sell past date, but I never really found this.

[dggriffi]

i think hooker delivery would do better.