Last week, Amazon announced it would expand its Whole Foods delivery service to Oklahoma City. Shortly after, the local Buy For Less grocery store company unveiled a partnership with Udelv to delivery groceries with autonomous vans.
Journal Record reporter Molly Fleming spoke with KGOU’s Jacob McCleland about changes in the grocery business.
Jacob McCleland: You're listening to the Business Intelligence Report a weekly conversation among business news in Oklahoma. I'm Jacob McCleland, and I'm talking today with Molly Fleming. She's a reporter with The Journal Record newspaper. Molly thank you for joining us.
Molly Fleming: Hey thanks for having me.
McCleland: So last week was kind of a big week for grocery deliveries in Oklahoma City. First we learned Amazon would begin grocery deliveries in the metro through Oklahoma City's Whole Foods. Then we found out another chain would start delivering groceries with driverless vehicles. Let's start with WholeFoods and Amazon. How will this work? And can anybody in the metro have their groceries delivered from from Whole Foods?
Fleming: People who are Amazon Prime members can order and they order more than $35 in groceries can have those items delivered for free in two hours. There are Amazon employees in the store filling the orders and an Amazon Flex drive delivers the items. Amazon Flex the company's last mile delivery service. And there is, uh, other people can order as well. There is a fee for that. But deliveries can be made in a pretty wide range. Residents can from Edmonds to South Oklahoma City to Jones and even west to Bethanie can get deliveries.
McCleland: So Whole Foods is joining Walmart in offering grocery deliveries here in this market. How does Walmart's delivery service differ from Whole Foods?
Fleming: So Walmart's big pitch is that it offers delivery without someone having to be part of a subscription service like Amazon Prime. Walmart delivery comes with a $9.95 cost each time though. At Wal-Mart the minimum order is $30 for delivery. The services available from 40 stores in Oklahoma City and Tulsa.
McCleland: As I mentioned a little while ago the Buy For Less grocery company which operates Uptown Grocery and a few other stores announced it would begin grocery delivery with self-driving cars. Who is Buy For Less working with and how long have they been talking about this?
Fleming: This partnership has been in the works for about six months so it moved pretty quickly. The vehicle company Udelv is based in San Francisco. The vehicles will have a safety driver in Oklahoma until the laws are changed here. So Udelv co-founder Daniel Laury said the vehicles are driven by a safety driver in California as well. There, the state has passed a law where the company could get a permit to operate the vehicles without a driver but is not done that yet.
McCleland: Now this is still a ways off in the future, right. What still needs to be done before driverless cars are on the roads here in Oklahoma?
Fleming: The laws have to be changed. I thought it was interesting and quite helpful that the Buy For Less owners, the Binkowskis, had Mike Patterson at the press conference. He's the executive director of the state's Department of Transportation. He said there are varying levels of autonomy in vehicles, ranging from one to five. So if you think about your own cruise control, that's about a two or three. But a driverless car is a five and that's illegal. Even a vehicle where someone is sitting behind the wheel and not ever driving is illegal. So there's work to be done. But he's a big fan of autonomous cars so it finally seems like he has a reason to push these laws forward rather than just speaking ni hypotheticals and, you know, "the technology is coming" type argument.
McCleland: Anyway back to back to grocery deliveries, what are the trends showing us now? Is this the biggest growth area for grocery stores currently?
Fleming: Yeah seems like that. I was talking to my colleagues about this because grocery has changed so rapidly. When I started this jop five years ago, I would go to retail discussions and the big point was, you know, as everybody was talking about the change in online sales versus bring-and-mortar, it seemed like online sales would never past brick-and-mortar sales. And one of the reasons was because most retail is grocery and gasoline. But these times are a changin' and online grocery store sales are not expected to slow down anytime soon, according to a May report from Brick Meets Click. The strategic advisory firm focuses on how technology and new players are changing grocery shopping and food retail. And so these analysts predict that online sales will grow faster than in-store sales. Between now and 2022, online sales will have a combined annual growth rate of 13 percent while in-store sales will only grow about 1.3 Percent. So I'm really looking forward to seeing what comes next especially with our local owners. Tulsa-based Riesers has been known to really invest in its store, so it will be interesting to see what they do as far as getting grocery delivery. Right now they use the company Shipt.
McCleland: Molly Fleming as a reporter for The Journal Record newspaper. Molly thank you for joining us.
Fleming: Hey thanks for having me.
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