– Barbara Kahn, Grocery Revolution, 1997<\/em><\/p>\n The traditional practice was for a homemaker to personally place an order with an independent shopkeeper for staples such as flour, butter, salt, sugar, coffee, tea, bacon or lard.\u00a0 As a convenience and sign of personalized service he would then select her items and have the large bundles of provisions delivered to her home later in the day by a delivery boy.\u00a0 Most women were accomplished cooks, responsible for the planning and preparation of daily meals from these mostly basic raw materials.\u00a0 Working men (and yet unregulated working children) ate the majority of their meals, including at midday, at home or\u00a0 when necessary brought a lunch pail filled with home prepared items with them to the workplace.<\/p>\n The traditional restaurant fell into one of two distinct types a century ago, both required dining on-the-premises.\u00a0 There were full-service, \u201cwhite tablecloth\u201d establishments catering to the wealthy or the middle class for special occasions.\u00a0 Alternatively there were limited service coffee shop-style counter service places aiming to supply everyday meals to a working or transient group who had no access to a home-cooked meal.\u00a0 Social and eating clubs were genteel substitutions used by the affluent professional requiring away from home meals both at lunch and dinner, while a roadhouse, small family owned \u201cmom & pop\u201d or diner provided the occasional prepared meal for those of less means or with less time to dine.<\/p>\n With good reason, grocers rarely envisioned themselves as in head-to-head competition with meals prepared away from home.\u00a0 If grocers and shopkeepers saw any competitive threat, it was from the direct-to-consumer home delivery provided by the growth of commercial dairy producers such as H.P. Hood in Charlestown, MA or the expanding reach of large bakeries such as Dugans as they moved from New York into Connecticut and Western Massachusetts.\u00a0 Following in the literal footsteps of itinerant horse-cart tinkers and merchants, these newly organized, wide ranging and efficient \u201ctruck route\u201d sales models delivered fresh staples daily to the front doorsteps of homes throughout the Northeast. At the peak of home delivery along with bread, bottled milk and dairy items there were companies providing everything from Fuller Brushes to tubs of Charles Potato Chips, from White Rock soda pop to cases of Narragansett beer.<\/p>\n \u201cSame-day delivery not just for city clickers: grocery shopping goes 24\/7: Online grocery shopping and delivery has become a crowded space, with a host of services competing for consumer attention. This trend allows everyone who sells food and beverages to be in the same-day delivery business without having to add additional operational infrastructure. Look for Uber and Google Shopping Express to put every supermarket in the same day delivery business and change consumer behavior to shop daily for prepared foods and recipe driven meal kits that contain all the ingredients and be delivered to homes and offices.\u201d<\/em> To compete with both the independent shopkeeper and the delivery man in New England, especially in Eastern Massachusetts, new choices were being offered to the rapidly industrializing marketplace.\u00a0 In 1918 the Rabb family created the Economy Grocery Stores Company (which has evolved into today\u2019s Stop & Shop corporation) a chain of stores which introduced the first self-service market to New England families.\u00a0 It was based on the A & P Economy Stores, first opened in Jersey City, NJ in 1912.\u00a0 Designed to offer a \u201cCash & Carry\u201d no delivery and low price system, shoppers for the first time were given the opportunity to wander the aisles and truly \u201cshop.\u201d\u00a0 Presented with a widening selection of newly introduced brand name packaged foodstuffs, groceries and dry goods shoppers could choose for themselves which brand, size or quantity they desired.\u00a0 The companies were able to use cost savings from labor and quantity purchasing to offer lower prices to a growing consumer base.<\/p>\n In the mid-1920\u2019s the Independent Grocers Alliance (I.G.A.) and Red & White Stores spread throughout the region, both were created to counter the spread of the conglomerates and their new buying power.\u00a0 Soon the chaining of markets became the competitive model, many with thousands of stores under these and other branded corporate names.\u00a0 Competition was fierce among these enterprises, each contesting by stocking new national consumer products as well as their own private label offerings.\u00a0 By the end of the 1930\u2019s a new larger store, the \u201csupermarket,\u201d was introduced with an increase in national branded grocery products on the shelves and bringing the previously independent specialty shops (butchers, bakery, green grocer) all under one roof.<\/p>\n At the close of WWII and as the suburbs grew across the country, hundreds of supermarkets were built to serve the expanding needs of families and their changing lifestyles.\u00a0 Convenience for the home cook evolved into finding a broad product choice at a store near home usually with free parking. It was convenient to have complete control over the entire purchase process, including the total time it took to complete the shopping experience. As the pace of daily life quickened and homemakers found themselves increasingly busy during the day, timing of store-provided delivery became inconvenient.\u00a0 In the mid-1960\u2019s supermarket companies continuously sought to drive costs down and become the low-price leader. In comparison the value proposition offered by a single product delivery man on a route truck selling commodities such as bread or milk became a high priced relic of a time gone by. The convenience of home delivery couldn\u2019t overcome the search for lower prices or the need to save time.<\/p>\n As they had for decades grocers still rarely envisioned themselves as in head-to-head competition with new restaurant offerings.\u00a0 Even so restaurateurs and grocers have always been vying for the dominant share of the total food dollar.\u00a0 The grocers captured more than $7 out of every $10 consumers spent on food purchases well past the Second World War and into the 1960\u2019s (see chart below).<\/p>\n In New England as the evolution from full-serve to self-service was happening to the grocery channel, a similar process was also beginning to emerge in the food away from home channel. When dining out there were established restaurants in hotels, traditional taverns in country inns throughout the region, and historic restaurants such as the Union Oyster House or Jacob Wirth in cities like Boston.\u00a0 There was also ice cream. What is important for the nature of food service competition with the grocery industry is that each of these restaurant chains, as\u00a0 the very definition of food away from home, were built in large part on a \u201ctake away\u201d model.\u00a0 Howard Johnson\u2019s in particular was created to cater to the traveling public, with the majority of his restaurants opened along highways and on busy traffic circles.\u00a0 The early roadside menu featured proprietary flavors of ice cream, with additional items such as \u201cfrankforts\u201d and fried clam rolls.\u00a0 All were intended to be eaten on the move, in fact handheld, and not specifically consumed inside the restaurant using utensils.\u00a0 Eventually diner-style counter seats for quick short-order meals became standard and then dining room tables and booths were added, but all HoJo restaurants maintained the take-out option at the front entrance.\u00a0 Most also included a small retail area of food novelties (salt water taffy, chocolate lollypops, and gift items).\u00a0 For the family, the truck driver or the traveling businessman these roadside \u201corange roof\u201d eateries were the definition of on-the-go convenience.<\/p>\n In the same way that the move to the suburbs after WWII drove the growth of the supermarket, it also set in motion the growth of the fast food chain restaurant explosion.\u00a0 Beginning in the early 1950\u2019s companies such as McDonald\u2019s, Burger King, Kentucky Fried Chicken and Chick-fil-A created a new fast food model as the definition and use of food away from home changed. In the fifty years between 1950 and 2000 the American public doubled their dollar purchases for restaurant food compared to food prepared for meals at home (see chart). Over this period there were notable exceptions to the dine-in or take-out service model.\u00a0 As early as 1952 a fried chicken franchise company, Chicken Delight, was established which was built on the service concept of home delivery.\u00a0 By the end of the 1960\u2019s it had grown to more than 1,000 units across the country.\u00a0\u00a0 Using the advertising phrase \u201cDon\u2019t cook tonite, call Chicken Delight\u201d it featured a unique dedicated system of free delivery. The company all but collapsed after losing a precedent setting anti-trust law suit over the requirement that franchisees pay premiums for purchasing franchiser approved restaurant supplies.\u00a0 The home delivery model seemed to disappear with the brand and its main competitor, Kentucky Fried Chicken, grew on a service model of family take-out.<\/p>\n The modern era of restaurant delivery of food to the front door was started when Tom Monahan, the founder of Domino\u2019s Pizza, instituted the \u201c30 Minutes Or Free\u201d campaign in 1973, initially with free delivery. No chain of any kind has done more to change the acceptance of a stranger bringing food to people\u2019s front doors in the middle of the night than Domino\u2019s.\u00a0 It did this while introducing such novel ideas as the corrugated pizza box, heated insulated delivery bags, and the lighted \u201c3-D\u201d car top sign.<\/p>\n Today the company is the dominant restaurant delivery provider, especially for customers using on-line as a convenience. More than 40% of Domino\u2019s U.S. sales were generated by online orders in 2014, and\u00a0 Domino\u2019s alone delivers more than 1.3 million pizzas every day in the U.S.\u00a0 Over the past forty years, this delivery-focused innovation has ignited the entire corporate pizza industry to shift from a dine-in service system to one based on delivery. In just over seven years (since 2007) Domino\u2019s Pizza has positioned itself to become a leader in the use of on-line ordering technology while capturing a greater share of the prepared food delivery business.<\/p>\n Due to the success of chain pizza delivery and the explosion of internet access through smartphone technology, many third party companies have become very important players in delivering restaurant meals in most major U.S. cities.\u00a0 The convenience of being able to order on-line, using service companies such as GrubHub.com, foodler.com, eHungry.com, menufy.com, or delivery.com has significantly changed the delivery model for all restaurants, but especially for the local independent operator.\u00a0 With little fanfare the restaurant industry, the very definition of food away from home, has become a major factor in the meals people consume in their homes.\u00a0 Third party delivery has been called the \u201cgreat equalizer\u201d for an independent restaurant\u2019s ability to reach its customers.<\/p>\n The competitive battleground for home delivery has been joined by many national and regional supermarket chains over the past few years.\u00a0 Stop & Shop, with headquarters in Quincy, MA is a U.S. division of the Dutch conglomerate Royal Ahold and is currently the 8th largest supermarket chain in the U.S.\u00a0 The company took an early position in the home delivery market channel with the 2001 purchase of the first mover in e-commerce and on-line grocery delivery, Peapod.\u00a0 The company has established itself as a leader in the area of technology in on-line ordering, and is the first in the U.S. to create \u201cvirtual\u201d grocery stores in commuter rail stations throughout the Northeast and Chicago.<\/p>\n Since the Peapod purchase by Stop & Shop, more than a third of the top 75 U.S. grocery retailers have chosen to become involved in the \u201ce-grocery\u201d space, spending hundreds of millions of dollars in the push for competing in the category.\u00a0 More than half of these entrants have created a hybrid e-grocery business model known as \u201cClick and Collect\u201d (a system where customers shop on-line and then drive to a pick-up point for groceries assembled by in-store staff) instead of a full-service home grocery delivery option. Peapod is also expanding into this pick-up option currently with over 3 dozen stores in Massachusetts and another 3 dozen in Connecticut and Rhode Island converted to the system.\u00a0 Only one Stop & Shop\/Peapod location shows same-day pick-up service availability, but the website does advertise a curbside service, \u201cPick-up is available at the convenient locations below. No need to get out of your car!\u201d\u00a0 In a trade-off of convenience over price, for less than an hour at minimum wage consumers can avoid the time spent inside the store on a traditional shopping trip.\u00a0 A flat home delivery fee of $6.95 applies for orders over $100.00, $9.95 for less than $100.00, or $2.95 for store pick-up on minimum orders of $60.00.<\/p>\n In contrast, Kroger, the no. 2 largest U.S. grocery company in 2014 purchased an established on-line health food and vitamin provider, Vitacost.com.\u00a0 Kroger paid $280 million in the hopes of being able to enter the direct-to-consumer market using an Internet platform of more than 1 million subscribers.\u00a0 The Vitacost website offers ground delivery of non-perishable and mostly organic health foods in \u201c1 to 4 days!\u201d Currently delivery is offered free for purchases made over $45.00.<\/p>\n The small, family company, Wellesley, MA based Roche Bros. Supermarkets offers home delivery from 9 of their 18 store locations and on-line pick-up or \u201cClick and Collect\u201d in five others, this latter a service which they are expecting to expand.\u00a0 Roche Bros. offers a wide variety of prepared meals and individual dinners, which are delivered cold and require re-thermalization, at prices ranging as low as $2.99 for a single cheese quesadilla. It charges a flat fee of $9.95 for all delivery orders with a strict no tipping policy.\u00a0 There is a flat $6.99 fee for pick-up orders at the stores.<\/p>\n According to The Food Institute and the research firm Brick Meets Click for the full year of 2014 online e-grocery sales are estimated to be about $27 billion, or roughly 4% of the total U.S. grocery market revenue.<\/p>\n While the traditional \u201cbricks and mortar\u201d grocery industry is making these steady but small steps towards e-grocery acceptance, there is a major change coming that reflects the disruption felt by all other retail segments by the emerging e-commerce market.\u00a0 To paraphrase a line from Sondheim\u2019s Into the Woods: \u2018there are giants in the cloud (sic).\u2019<\/p>\n Amazon.com has been testing grocery delivery in Seattle since 2007 when it created AmazonFresh.\u00a0 This rapidly expanding fresh home delivery option includes both perishable and prepared meals.\u00a0 In parts of New York City delivery is guaranteed within one hour, with an annual subscription cost of $299.00.\u00a0 Just at the end of 2014 Amazon added a new smartphone App to its e-grocery mix, Amazon Prime Now, which offers free two-hour delivery service to Amazon Prime members.\u00a0 It is expected to be in 15 major cities by the end of 2015.<\/p>\n Not to be outdone by arch-rival Amazon, Google.com is also entering the competition for home delivery of retail items, called Google Shopping Express. In the grocery segment, Google Express has built a partnership with Whole Foods Markets.\u00a0 Initial delivery service is free on minimum orders of $15.00.<\/p>\n In addition, the world\u2019s largest retailer, Walmart, is also the country\u2019s largest grocery chain. Walmart.com has been heavily invested in the home delivery and \u201cClick and Collect\u201d e-commerce environment for a number of years and is promising to expand.\u00a0 While it offers thousands of dry goods and packaged grocery items, it has not yet committed to delivery of perishable grocery products but does have them available for in-store pickup.\u00a0 Shipping is free on orders over $50.00, but only comes with delivery guaranteed for 6 to 8 days. In-store pickup is free, as well.<\/p>\n The real competitive battleground in 2015 for both grocers and restaurants, though, will be a rapidly growing e-commerce start-up called Instacart.com. The company has already established a major presence in the Boston market, along with its original home of San Francisco, Chicago and a dozen other cities.\u00a0 The founder and CEO, Apoorva Mehta, was an executive at Amazon before creating the company in 2012. The service uses skilled individuals who personally shop at area stores including Whole Foods, Trader Joe\u2019s, Shaw\u2019s and Costco, delivering to homes and businesses in Boston, Brookline, Cambridge, Somerville, Medford and Chestnut Hill.<\/p>\n What makes Instacart different is that is works on the disruptive decentralized model which has made Uber a threat to traditional taxis, or Airbnb a threat to lodging.\u00a0 Created on the principles of the shared economy, a network of trained independent personal shoppers is contacted through a proprietary smartphone app.\u00a0 These individual contractors are assigned a single customer order which they confirm with the app.\u00a0 They then head to the desired stores and work to pick items that are better than the customer might even choose themselves.\u00a0 When necessary or desirable shoppers will call the customer to make suggestions for in-store substitutions.\u00a0 Delivery is generally within an hour, with costs ranging from $3.99 to $9.99 depending on minimum purchase and speed of service, but also carries a premium charge for Instacart of up to 20% on each item.<\/p>\n A test is being conducted in some Boston Whole Foods Markets to have Instacart personal shoppers assigned to individual locations to accelerate speed of service. Unlike Peapod or AmazonFresh, Instacart has no need for warehouses, drivers or delivery trucks. The infrastructure is the technology of a smartphone.<\/p>\n The emerging battle, appears to be a return to a fight first defined a century ago.\u00a0 Simply, who will control the ephemeral space between the consumer\u2019s need for convenience and how, or where, they will prepare and eat dinner tonight.<\/p>\n This gets us to a convergence point for restaurants and supermarkets.\u00a0 It starts with the primary question, \u201cwhat is the difference between a meal prepared at home and a meal prepared away from home if both are delivered to the front door and eaten at the same kitchen table?\u201d<\/p>\n Maybe the convergence discussion continues with a question that has been asked for more than one hundred years, \u201chow do I define convenience and personal service when it comes time to eat?\u201d<\/p>\n If a personal shopper from Instacart.com selects a fully cooked rotisserie chicken at Costco and combines it with a fresh bag of Spring green salad mix and a bottle of Pinot Grigio, then delivers it to the front door of an on-line customer within an hour, is that substantively different than a GrubHub delivery driver arriving with a Nigiri Sushi platter and Tonkatsu from a local Japanese restaurant nearby?<\/p>\n Or if a Domino\u2019s driver delivers a custom made Artisan Chicken & Bacon Carbonara Pizza with a Chocolate Lava Crunch Cake and a 2 liter bottle of Diet Coke is that different than a Peapod driver showing up with a California Pizza Kitchen BBQ Chicken Crispy Thin Crust Pizza, a Bertolli Triple Chocolate Strata Cake and a 2 liter bottle of Diet Coke?<\/p>\n Technology, especially when it comes to the easy access everyone has to on-line, e-grocery, e-commerce applications through smartphones and laptops, forces us to rethink what convenience and personal service actually mean when it comes time to eat. Is it more inconvenient to order on-line and have to drive to \u201cClick and Collect\u201d our groceries at the Stop & Shop, or is it more inconvenient to use the new \u201cOrder Ahead\u201d on-line feature at a Panera Bread and simply walk around the corner to grab the bag with my name on it at lunch?<\/p>\n After dinner as the dishes are being cleared, does it matter to the consumer who brought the food to the door or if it was classified as FAH or FAFH?<\/p>\n Remember the \u201cgood old days\u201d when we all knew the difference?<\/p>\n By: Christopher Muller, Ph.D. A century of commercial competitive conflict between the grocery (food at home or \u201cFAH\u201d) and restaurant (food away from home or \u201cFAFH\u201d) distribution channels is now being fought on an unexpected but previously contested battlefield: who will own the \u201cconvenience\u201d of delivery in the consumer\u2019s mind. Just one hundred years ago […]<\/p>\n","protected":false},"author":8874,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[215,212,217,211,216,220,46],"tags":[394,59,60,56,64,65,63,62,57,61],"_links":{"self":[{"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/posts\/780"}],"collection":[{"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/users\/8874"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/comments?post=780"}],"version-history":[{"count":8,"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/posts\/780\/revisions"}],"predecessor-version":[{"id":4758,"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/posts\/780\/revisions\/4758"}],"wp:attachment":[{"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/media?parent=780"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/categories?post=780"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bu.edu\/bhr\/wp-json\/wp\/v2\/tags?post=780"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The First Home Delivery System<\/strong><\/h4>\n
Direct-to-Consumer Home Delivery<\/strong><\/h4>\n
\n – Phil Lempert, The Supermarket Guru , Nov. 2014<\/em><\/p>\nA Switch to Cash & Carry and the End of Home Delivery<\/strong><\/h4>\n
Declining Dominance of the Food Dollar Expenditure By Grocers<\/strong><\/h4>\n
\nIn 1914 the Durand family opened an ice cream stand in Post Office Square, which became the original unit of the Brigham\u2019s chain of stores by the mid-1920\u2019s.\u00a0 Nearby the Bickford family also got their start in the early 1920\u2019s.\u00a0 Both became iconic New England family restaurant businesses. At this time the true innovator was the iconoclastic Howard D. Johnson of Quincy, Ma.\u00a0 In 1925 he created an eponymous chain of restaurants, which had been built on his efforts to create a more flavorful ice cream out of the necessity to save his family\u2019s business from bankruptcy.\u00a0 Surviving both the Great Depression and World War Two, by the middle of the 1960\u2019s Howard Johnson\u2019s was to become the world\u2019s largest foodservice company.<\/p>\nThe Early Days of Chain Restaurants: A Choice of Eat-In or Take-Out<\/strong><\/h4>\n
\nThe remarkable thing about all of the fast food companies is that the overwhelming consumption of the products they sell has always occurred away from the restaurants themselves: either as take-away or ordered at the drive-thru and most likely eaten in a car.\u00a0 Convenience for the fast food consumer is about speed of service and ease of ordering, with low prices close behind.<\/p>\nThe Emergence of Pizza Delivery as Catalyst for On-Line Ordering<\/strong><\/h4>\n
Home Grocery Delivery Returns Thanks to the Internet<\/strong><\/h4>\n
The Third Party Challenge For Grocery Delivery<\/strong><\/h4>\n
The Personal Shopper Returns<\/strong><\/h4>\n
Back to the Future<\/strong><\/h4>\n
\n![\"chris-muller-423x636\"](\"\/bhr\/files\/2015\/05\/chris-muller-423x636.jpg\")
<\/a>Christopher C. Muller is Professor of the Practice of Hospitality Administration and former <\/em>Dean of the School of Hospitality Administration at Boston University. Each year, he moderates the European Food Service Summit, a major conference for restaurant and supply executives. He holds a bachelor\u2019s degree in political science from Hobart College and two graduate degrees from Cornell University, including a Ph.D. in hospitality administration. Email cmuller@bu.edu<\/a><\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"