Rosauers launches grocery delivery
Company says it wants to be on front end of trend
Linn ParishJune 30th, 2016
Spokane-based grocery retailer Rosauers Supermarkets Inc. has launched its own grocery-delivery service in an effort to be on the front end of an industry trend.
Rosauers President and CEO Jeff Philipps says more retailers, ranging from traditional supermarkets to new services like Amazon Fresh, are starting to offer grocery delivery in other markets.
“Everybody wants to be in the convenience business, and that means delivery,” Philipps says. “We wanted to be first in the market, rather than trailing somebody else who might be first in the market.”
Some subscription-based food services deliver in the Spokane market currently, but Philipps says he’s not aware of any other grocery stores that deliver here. Safeway Corp., the Pleasanton, Calif.-based grocery retailer, says on its website that it offers a delivery service, but it’s not available in the Spokane market yet.
Rosauers is operating the service, called Rosauers Delivers, from three of its stores—at 2610 E. 29th, on Spokane’s South Hill; at 9414 N. Division, on the North Side; and at 10618 E. Sprague, in Spokane Valley.
Each store delivers within a three-mile radius, with somewhat jagged delivery boundaries. As examples, the Division Street store delivers as far north as north Hatch Road, off U.S. 395; the South Hill store goes as far south as 65th Avenue; and the Valley supermarket goes as far east as Sullivan Road.
Current delivery territories leave some large gaps in the Spokane area, and if the service is successful, Philipps says, the company will consider ways to close those gaps by providing delivery from additional supermarkets. Also, it will evaluate demand for delivery services in other markets.
The company makes deliveries on most weekdays—from 11 a.m. to 8 p.m., with customers able to select the two-hour window during which their groceries can be delivered—and can handle up to 27 deliveries a day from each location, Philipps says.
The company is segregating delivery income, which includes groceries and a $9.95 delivery fee, from in-store sales in an effort to gauge performance, and early indicators show that the service has a small profit margin when operating near capacity, he says.
Rosauers takes orders online through a dedicated website, RosauersDelivers.com. Consumers can choose any of the items that are available in the supermarket from which the groceries will be delivered, including tobacco and alcohol. The prices for items to be delivered are the same as they are in store, though Philipps points out that pricing on produce and some other items can be different. For example, a customer pays a per-pound price for bananas in store, but when ordering online, that customer is paying by the banana.
Philipps says the service appeals to a broad demographic range, from mothers of young children to professionals who work long hours to people who are homebound.
He adds, “Not everybody thinks grocery shopping is a fun thing to do. I do, but not everybody agrees with that.”
While Rosauers Delivers is new, Philipps says the company previously did offer delivery service through a relationship with a separate Spokane company, Delivery Boy. Philipps says, however, Delivery Boy didn’t have a large clientele and went out of business last year. The supermarket already had identified the industry trend and began working on its own delivery system.
Of the partnership with Delivery Boy, Philipps says, “We were way ahead of our time. We just didn’t know it.”
Rosauers has 22 supermarkets in Washington, Idaho, Oregon, and Montana and a total of about 2,000 employees. In the Spokane market, the company has nine stores, including the Huckleberry’s Fresh Market on the South Hill, and they employ a total of about 800 people. Philipps says the company hired four people to work with Rosauers Delivers, and those employees work in the stores when not handling deliveries.
In general, Philipps says the company doesn’t have any immediate plans to add new stores, though it’s evaluating some markets outside of the Spokane area for potential new locations.
“It’s pretty saturated here, so we’re looking at other markets,” he says.
However, he says that the company added fueling stations at its Nine Mile Falls store, and that’s been a successful service. The company is evaluating three sites in the Spokane area for fueling stations, though he declines for now to disclose those sites.
Rosauers is privately held and doesn’t disclose annual revenue figures, but Philipps says the company has had consistent, positive growth each year since 2008, when it suffered a small dip in sales.