Grocery giant Albertsons Inc. is leveraging a small subset of its Jewel-Osco store locations in the Chicagoland area to fulfill online orders as part of a larger omnichannel push starting on Nov. 7.
In its first foray into e-commerce, Jewel-Osco has designated 11 locations as “pick stores,” from which it will fulfill delivery orders. Of those, six will also offer in-store pickup. The company says prices for delivery will range from 95 cents to $9.95 on a minimum $49 order, depending on the time of day and time window selected.
To fulfill these online orders, Jewel-Osco—a hybrid grocery and drugstore chain with 187 locations in Illinois, Iowa and Indiana—has hired nearly 100 new employees and purchased 60 trucks that will be used exclusively for e-commerce. First-time customers will receive free delivery. Prices will be consistent online and offline, the company says.
Albertsons, No. 157 in the Internet Retailer 2017 Top 500, has been increasing its commitment to e-commerce, introducing delivery and pickup options at stores across the country. In an Oct. 23 conference call with analysts, Wayne Denningham, the grocer’s president and chief operating officer, said the company’s delivery network will include eight of the 10 most populous U.S. markets by the end of fiscal 2017, which ends Feb. 24, 2018.
Albertsons also plans to offer home delivery in 34 markets by the end of the fiscal year. By then, it also will have 80 in-store pickup locations, and expects to increase that to least 200 in fiscal 2018, he said. Albertsons is also updating its mobile app.
In September, Albertsons acquired meal-kit delivery company Plated. At the time, a source familiar with the matter who asked not to be identified said the deal was the culmination of swift deal talks that were sparked by Amazon.com Inc.’s purchase of Whole Foods Market Inc. Since the acquisition, Plated has continued to operate as a distinct brand with its own leadership team led by CEO Josh Hix.
The Whole Foods-Amazon merger was considered to be a factor in Albertsons’ earlier decision to postpone plans for an initial public offering for the second time in two years. Albertsons is owned by private equity form Cerberus Capital Management, which first invested in the grocer in 2006. In 2014, Cerberus paid $9.2 billion for Safeway Inc. and merged the grocer with Albertsons.
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