Grocery Delivery Services Finding Strong Demand Customers Pay Service Charge To Have Food Brought To Door

Orange groves were plentiful, grocery stores distant and home delivery common in the North Hollywood of Pamela Miller’s childhood.

“The Helms bakery delivered bread, a dairy company delivered milk, and deliverymen brought us seltzer water, meat, fish and vegetables,” said Miller, recalling the 1940s and ‘50s.

Once again Miller is picking up the phone to order groceries. For a service charge of $1.99, Pink Dot, a rapidly growing expanding grocery delivery company, guarantees it will be knocking on the door of her Santa Monica home in 30 minutes or less.

“This brings back warm feelings of friendly convenience,” said Miller, who is among the Los Angeles company’s 45,000 home delivery customers, most of them on the Westside.

Pink Dot fills orders from five warehouses, three of which opened in the last two months. The company plans to open six more distribution centers by March 1997, including one in Orange County.

The company has been around nine years, filling delivery orders from its West Hollywood store on Sunset Boulevard. But with financing from a group of Beverly Hills investors, it’s betting that home delivery will carve out a bigger niche with the convenience-conscious.

“This is a society where time is becoming more and more valuable,” said Bill Toro, founder and president of Pink Dot. “Home delivery will be a big part of the changing face of retail.”

“These services will be springing up more and more because consumers have less disposable time and they’re demanding convenience,” said Barry Libert, managing director of Transformation Group, a Boston-based consultant on industry change and a division of accounting giant Arthur Andersen in Chicago.

Libert said consumers spend a third as much time shopping as they did 10 years ago. There are more dual-income households now, and more busy shoppers are making purchases by telephone, computer or through a catalog.

Restaurants have long used independent contractors to make deliveries. One of the largest such contractors - Virginia-based Takeout Taxi - has franchises in Los Angeles and other cities. L.A.’s Takeout Taxi serves 78 restaurants and charges $5 for deliveries.

One of the biggest grocery delivery companies, Evanston, Ill.-based Peapod, delivers for supermarket chains. Orders are placed via the Internet. Customers pay Peapod $6.95 plus 5 percent of the grocery bill per delivery. On most orders, Peapod delivers as quickly as three hours after the order is made.

The company began serving San Jose in early August, 1995, and is considering Southern California as an expansion site.

Shoppers Express, which serves 19 cities nationwide, is already delivering groceries in Southern California. The Maryland-based company takes orders by telephone, fax and computer for the 31 Pavilions stores in Orange and Los Angeles counties and charges $11.95 per delivery. Available Monday through Friday, its deliveries are made 90 minutes to two hours after orders are placed.

By 2000, home delivery sales of restaurant meals and groceries will account for 5 percent to 8 percent of the $800 billion in annual food service sales, up from less than 1 percent now, said Michael Gorshe, executive director of Smart Store, a food services consulting division of Arthur Andersen.