The three-year old Google Express is expanding into delivering groceries on top of other non-perishable goods. Initially, they are only delivering to some Los Angeles and San Francisco neighborhoods and from a limited number of partner retailers.
For existing Google Express members, food deliveries will start at $2.99 on top of the annual $95 membership fee. For non-members, deliveries start at $4.99. Additionally, Google is raising the minimum size of an order to $35 from $15. In San Francisco, users will be able to order from Smart & Final, Costco, and Whole Foods, with the latter being replaced by Vincente Foods in Los Angeles.
While the grocery delivery market is full of competing services from Amazon and Instacart, it is a low margin business. In recent months, Google has closed down its delivery hubs and outsourced deliveries. The company is keeping down costs by not having refrigerated warehouses like their competitors and instead picking up deliveries direct from its partner’s stores. This also helps avoid the risk of having to manage inventory and dealing with food spoiling.
In recent months, Google has been expanding its Express service to the Midwest and all of California. Additionally, they have cut down their delivery window down to two hours from four for all shipments, including the upcoming grocery service.
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