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In ecommerce battle, Albertsons looks to small neighborhood warehouses; amps up ‘drive up’ service in Boise area

Boise-based Albertsons continues to make a number of moves to compete in a consumer shift to online grocery sales.

The Wall Street Journal reports the retailer started testing small fulfillment centers close to stores to quickly fill online orders. The centers, which cost about $3 million to build, sit next to existing stores. The automated warehouses take up about 10,000 square feet.

Christine Wilcox, VP of Communications & Education tells BoiseDev the company continues to look at where to place future centers and doesn’t have anything to announce in its home market of Boise, yet.

The center in San Francisco includes a quote from Apple founder Steve Jobs on the wall. “Get closer than ever to your customers. So close, in fact, that you tell them what they need well before they realize it themselves. “

[Is that a robot rolling down the aisle at Albertsons and Walmart? Yep. Here’s what it’s for]

According to permit filings, new “Drive Up and Go” signage will start to appear at local stores. Locations include ParkCenter/Apple, 17th/State, 36th/State, on Eagle Rd., on Broadway and at Orchard and Overland. The service allows customers to order online and collect items at a nearby store. Walmart, Fred Meyer and other retailers offer similar services.

The fight for online grocery

Workers at the San Francisco fulfiment center

Albertsons now offers three distinct non-traditional grocery services in the area. In addition to the drive up product, customers can get delivery in as little as 2 hours through a partnership with Instacart, or same-day delivery direct from Albertsons.

Currently, workers fulfill online orders from existing stores. Some retailers, like Kroger Co. (which owns Fred Meyer) started building larger warehouses on the edge of metro areas to segregate online fulfillment from everyday shopping.

According to the WSJ, online grocery sales increased by 15% nationwide in 2019. Online sales account for just more than 6% of all grocery spending according to Brick Meets Click. Experts estimate a continued rise in that number in coming years.

Traditional retailers like Albertsons, Kroger Co. and Walmart continue to amp up efforts to hold and increase share of online sales. Amazon also continues to put capital into online grocery efforts, and also pushed into brick-and-mortar offerings with the 2017 purchase of Whole Foods. It also established several small “cashier-less” stores. Next year, the company will open a grocery store that isn’t under the Whole Foods banner.

In Boise, Amazon will build a large distribution center in Nampa, as well as a fulfillment center in Boise. The centers will give Amazon an increased ability to quickly distribute goods in the area.

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Don Day - BoiseDev Editor & Founder
Don is the founder and publisher of BoiseDev. He is a National Edward R. Murrow Award winner and a Stanford University John S. Knight Fellow. Contact him at don@boisedev.com.

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