Google Launches Fresh-Grocery Deliveries

Alphabet Inc.GOOGL +2.00%’s Google is expanding its same-day delivery service tofresh groceries, the latest example of the tech titan’s increasing push into consumers’ dailylives.

Google said it would begin delivering produce, meat, eggs and other perishable goods onWednesday in parts of San Francisco and Los Angeles. The service is part of GoogleExpress, which partners with retailers in some U.S. cities to deliver goods to consumerswithin hours of an order.

Like many recent Google initiatives, including Internet-connected thermostats and high-speed Internet service, food delivery poses sometimes trickier problems than searchingthe Web. Fresh-food delivery in particular is a well-stocked field that has yielded fewprofits.

Competitors include Amazon.com Inc., Instacart Inc., Fresh Direct LLC and Safeway Inc.But they and others have struggled to make money, in part because of high delivery costsand historically low profit margins of about 2% on grocery sales. In an earlier era, whenInternet service was slower and spottier, Webvan Group Inc. burned through $800 millionbefore filing for bankruptcy in 2001 and ceasing operations.

While Amazon and Fresh Direct maintain expensive refrigerated warehouses near cities,Google says it will make deliveries directly from its existing retail partners. That will avoidthe risks of owning its own inventory, like food spoilage.

In San Francisco, Google will deliver from Costco Wholesale Corp.COST +1.21%, WholeFoods Market Inc.WFM +2.78% and Smart & Final Stores Inc.SFS +2.75% In LosAngeles, it will start deliveries from Costco, Smart & Final and upscale grocer VincenteFoods.

Google said it is making some changes to its current delivery operation to accommodatefresh groceries, such as reducing customers’ delivery window to two hours from four.

It also is raising the minimum size for an order including fresh groceries to $35, from $15.For Google Express members — annual membership costs $95 — fresh-food deliverieswill cost $3 an order, compared with no charge for most deliveries of non-perishablegoods. Non-Express members will pay $5 an order.

Google Express has had some recent hiccups. Two top executives have left sinceNovember 2014 and the company shuttered two San Francisco-area warehouses lastyear, including one where workers had taken a step toward unionizing.

Google said Express has expanded in recent months, including to most of the Midwestand all of California. The company also said that eliminating warehouses has expeditedthe service and helped make fresh-food delivery possible.