How grocery delivery apps are affecting SF corner stores

You may think that’s hyperbole, but consider this: A new San Francisco startup called Popcorn promises to deliver groceries to your door “faster than 911.”

The 24/7 service, which guarantees delivery in “minutes,” may in some unfortunate cases actually be faster than 911, as Mother Jones pointed out in light of the San Francisco Chronicle’s reporting on the shortage of ambulances in the city. And it’s not the only app to do so.

Grocery delivery services such as Amazon Fresh and Instacart are household names at this point. More recently, a bevy of new services offering just the essentials at extraordinarily fast speeds have cropped up. Gopuff, which purchased BevMo! for $350 million in 2020, delivers alcohol, frozen pizzas and condoms to your door in 30 minutes. Food Rocket, a San Francisco-based startup, promises delivery of convenience store essentials within 15 minutes, with no minimum order amount or fees for delivery.

Popcorn, a new delivery service based in San Francisco, promises delivery

Popcorn, a new delivery service based in San Francisco, promises delivery “faster than 911.”

Courtesy of Popcorn

Popcorn (of the eye-catching “911” slogan) declined an interview with SFGATE, but Food Rocket CEO Vitaly Alexandrov shared how his app works. Food Rocket’s couriers, who are full-time employees, retrieve items customers order directly from “dark stores” (a network of mini-warehouses throughout the city that the company leases) and then hop on e-bikes or scooters to make their deliveries within the 15-minute window.

“[Customers] they don’t need to go anywhere, they don’t need to wait for a courier or a rider, they can just order and have delivery within 15 minutes,” Alexandrov explained. “… So they have two options: to go to any convenience store by themselves, or order from Food Rocket and get it faster than if they were to go there by themselves. So this is the key to this business model: We are faster than you.”

When Alexandrov says Food Rocket is “faster than you,” he means faster than other delivery services, like Gopuff, but also faster than YOU — your own two feet walking yourself to your local corner store and back. In an interview with the San Francisco Business Times, he said, “We replace any convenience store.”

The price of convenience

Miriam Zouzounis and her father David pose outside of Ted's Market, which has been serving the SoMa neighborhood since 1967.

Miriam Zouzounis and her father David pose outside of Ted’s Market, which has been serving the SoMa neighborhood since 1967.

Blair Heagerty / SFGate

It’s language that troubles many San Francisco convenience store owners.

“I think we’re going to be sacrificed by those apps,” said Hafeed “Eli” Kardouh, owner of Star Market & Liquor on Geary Street. “… At a certain time, I believe big corporations and big retailers can come and easily grab everything.”


During the pandemic, small businesses like Kardouh’s in the city’s downtown area struggled. Office workers and tourists disappeared while people concerned about COVID increasingly turned to delivery services. Some local businesses began listing their products on third-party delivery services out of necessity, but still fear being put out of business.

“The fact is that even the apps that are hosting us, and that we’re kind of now dependent on, are using us as a pathway to be obsolete,” said Miriam Zouzounis, who helps run San Francisco market Ted’s Market & Deli with her father. She also serves on the board of the Arab American Grocers Association. Ted’s Market offers its sandwiches, salads and liquor selection for delivery on DoorDash as well as through its own website.

Hafeed

Hafeed “Eli” Kardouh is the owner of Star Market & Liquor at 689 Geary St., San Francisco.

Courtesy of Hafeed Kardouh

She pointed out that the city tends to regulate small brick-and-mortars quite strictly, even instituting a curfew of 8 pm for small stores that sold alcohol in the early days of the COVID shutdown while bigger stores and food delivery services were allowed to continue operating. In addition, small vendors don’t have the purchasing power to buy things wholesale at a rate that they can sell them competitively.

“They’re undercutting us,” she continued. “Even if we put those same items on our platform, we’re not able to compete price-wise.”

Independent convenience stores also can’t compete with the advertising power of the apps, which often tailor their offerings to appeal to their largely millennial audience.

“Big retailers are well-funded, small merchants are not,” Kardouh said. “Big retailers have a smart algorithm to do advertising. They could reach out and swipe all those customers, and they can be dominant.”

To dominate, or to coexist?

Food Rocket employees hop on e-bikes or scooters to make their deliveries within the 15-minute window.

Food Rocket employees hop on e-bikes or scooters to make their deliveries within the 15-minute window.

Courtesy of Food Rocket

Despite saying previously that Food Rocket can “replace convenience stores,” Alexandrov now says he believes there’s room for both in San Francisco.

“I think that we can coexist with everyone on the market,” he said. “… We just cover some specific needs for you as a customer, so if you don’t want to go anywhere, you can order on Food Rocket, but if you want some brand you cannot find on Food Rocket, you can go to a convenience store.”

I have added that Food Rocket eventually plans to add delivery options from local convenience stores to the app.

San Francisco-based Food Rocket promises grocery delivery in 15 minutes.

San Francisco-based Food Rocket promises grocery delivery in 15 minutes.

Courtesy of Food Rocket

Still, it feels impossible not to pit the delivery apps against the brick-and-mortars. gopuff tweeted in 2018 its mission to “save all of your lives from ever having to walk into a nasty convenience store again.” Its founders have also voiced their intentions to be “a replacement to a convenience store,” co-founder Rafael Ilishayev told Convenience Store News in 2017 (Gopuff declined to be interviewed for this story).

“If your intention is not to displace us, then you need to help people transition their license,” Zouzounis said. “This is like a [taxi] medallion situation. If you want to change the off-sale alcohol and tobacco retailer, you need to not cut the feet out from underneath them, and you need to empower them because those are the community-serving businesses. And when they go, that’s when neighborhoods go. …When there’s vacant storefronts, crime increases.”

Neighborhood flavor

Ted's Market, at 1530 Howard St. in San Francisco, sells deli sandwiches as well as convenience store essentials.

Ted’s Market, at 1530 Howard St. in San Francisco, sells deli sandwiches as well as convenience store essentials.

Blair Heagerty / SFGate

San Francisco-based companies Food Rocket and Popcorn are not available in Oakland yet, where I live. So I decided to take Gopuff for a spin. At lunchtime, I placed my extremely urgent order of Topo Chico hard seltzers and sour gummy worms on Gopuff, and exactly 23 minutes later, a car pulled up outside my apartment. My delivery driver scanned my ID on his phone from him, and I gave him a signature. In the time it takes to watch an episode of “The Office,” snacks and drinks were in my hands.

I’ll admit it — it was astonishingly fast. But it wasn’t faster than walking to my local corner store and back. Within a few minutes of placing my GoPuff order, I’d already walked to the little Middle Eastern market on the corner, picked out a Turkish soda, some hummus from the deli counter and a bag of pita so fresh it steamed up the plastic bag . I exchanged pleasantries with the very friendly owner and brought my spoils back home. The entire round trip took 10 minutes.

Ted's Market, located at 1530 Howard St. in San Francisco, sells deli sandwiches as well as convenience store essentials.

Ted’s Market, located at 1530 Howard St. in San Francisco, sells deli sandwiches as well as convenience store essentials.

Blair Heagerty / SFGate

My local market may not sell trendy hard seltzers, hangover cure tablets or Third Culture mochi muffins, but I can get an incredibly delicious falafel wrap there for less than $10 — and it’s big enough to last me two meals. Every corner store has its own unique personality that keeps people coming back for more, whether it specializes in cute shop cats or cutty bangs. It’s just not something an austere app can replicate, no matter how many trendy frozen pizzas it offers. This experience made me think of something Kardouh from Star Market & Liquor on Geary had mentioned earlier.

“I’ve always thought the convenience stores are the lifeblood for America,” he said. “… We provide therapeutic relief to a lot of people. It’s a break out of their daily life.”

Maybe I’m bored for saying this, but as someone who works from home, a trip to the corner store for a treat is often the highlight of my day. I can’t imagine life without them.

“There’s something to be said for being able to just check in with people in the neighborhood and see the same friendly faces,” Zouzounis told me. “It’s kind of scary to think about what a neighborhood would look like without that.”



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