US: Google to start testing grocery deliveries this year | Progresiv

Google Inc. will start testing a delivery service for fresh food and groceries in two U.S. cities later this year, stepping up competition with online retailer Amazon.com Inc. and startup Instacart Inc.

The trial will begin in San Francisco and another city, said Brian Elliott, general manager of Google Express, which already delivers merchandise, including dry foods, to customers. Whole Foods Market Inc. and Costco Wholesale Corp. will be among Google’s partners for the new service, he said.

Google is investing in delivery services for homes and businesses as it seeks to lure more traffic to its websites. The move puts the company in more direct competition with Amazon, which has rolled out its AmazonFresh service in several U.S. cities. In April, areport showed the e-commerce giant was the lowest-cost among rivals in New York. Online groceries are a 10.9 billion dollars industry in the U.S., and the market is expected to grow 9.6 percent annually through 2019, according to a December report by IbisWorld. Amazon on Tuesday said it would enter the restaurant delivery business.

Google is also expanding next-day deliveries in the Midwest for more than 25 million potential customers in places such as Indiana, Wisconsin and Ohio. The Web company already offers services in Manhattan and Chicago with Walgreen Co., Kohl’s Corp. and other retailers.

The fresh-food trial, including fruits and vegetables, is part of a move away from making deliveries from warehouses, which can add complexity and requires refrigeration, Elliott said. Giving customers more options should help to boost profit and sales, he said. (www.bloomberg.com)