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At Doorsteps and Curbsides, Age of Delivery Has ArrivedLock Icon

7 min read
Age of Delivery Has Arrived May 4 2020
Kevin Hamman with operations and catering at The Root Cafe in Little Rock packs up locally sourced grocery items for a delivery. ( Karen E. Segrave)

A new age of delivery and pickup has arrived at our doorsteps in the coronavirus pandemic, and it’s likely to last, Arkansas business leaders and retail experts say.

In record numbers, customers are turning to home delivery and curbside pickup from businesses as small as the Root Cafe in Little Rock to titans like Amazon and Walmart.

More than 60% of Americans have placed e-commerce orders for groceries since the virus crisis began, almost all filled by delivery, up from just 11% of consumers who purchased groceries online during last summer, according to Venkatesh “Venky” Shankar, director of research at the Texas A&M Center for Retailing Studies.

Shankar and local business leaders agreed, too, that the shift toward more remote ways of getting products to people isn’t likely to reverse after the pandemic passes or a vaccine is found.

“More people have tried delivery or pickup who used to want to touch their produce and were wary of online shopping,’’ said Charlie Spakes, president of the Arkansas Grocers & Retail Merchants Association.

“We all know consumers’ behaviors are dictated by experience, and now people forced to go online for groceries have found it reliable and easy to do.”

Before the pandemic, he said, bigger grocers in his association — Kroger, for instance — were “in the online game” via Instacart, the nationwide third-party deliverer headquartered in San Francisco. Online shopping “was a really small part of how business at most grocery stores was done,” Spakes added.

“What you’ve seen with COVID is that it put a lot of independent grocers into the pickup game.”

Stores like Edwards Food Giant and Heights Corner Market are delivering phoned-in orders to cars waiting outside. Big drugstores like Walgreens and CVS are advertising free one- or two-day shipping, and drugstores are perfecting touchless protocols, limiting or eliminating human contact in pickups.

Aversion to Stores

All this has been necessary for business, because “a vast majority of people don’t want to go shop right now,” Spakes continued.

That aversion has spurred sales at Amazon of Seattle and Walmart of Bentonville, companies that are scrambling to hire thousands of workers during the worst unemployment crisis since the Great Depression.

“We’ve seen a huge uptick in Amazon’s business, a huge uptick in Walmart’s business,” said Doug Voss, professor of logistics and supply chain management at the University of Central Arkansas.

“We’re seeing companies with a last-mile presence increase their business, so that’s one bright spot,” Voss continued, referring to the last link in the delivery chain, directly to homes. (For guest commentary from Voss, see Coronavirus Could Change the Global Supply Chain.)

J.B. Hunt Transport Services Inc. of Lowell has moved aggressively in that market, investing more than $250 million to acquire final-mile companies in the past three years. The company also broke out its Final Mile Services as a reporting element in its financial documents, revealing a division that generated $566 million in revenue in fiscal 2019.

J.B. Hunt’s purchases included a $136 million deal for Special Logistics Dedicated LLC in 2017, and two acquisitions in 2019, $100 million deal for Cory 1st Choice Home Delivery and $17.5 million commitment for RDI Last Mile Co.

“You’re seeing your grandmother and grandfather who maybe had never placed an Amazon order saying, yes, I’d like to go to a store but I know it’s against my best interest to do so,” Voss said.

That wariness will linger even after restaurants and retail shops reopen, with social distancing and other protocols expected to be in place. “I think it would be naive to think that people are just going to go back to pre-COVID behaviors,” said Spakes, whose association members run the gamut from small chains like Hays Supermarkets in northeast Arkansas — which is now offering same-day delivery and pickup — to the world’s largest retailer, Walmart.

“This pandemic is going to alter people’s behavior, pushing them more online, but also to expect more from retail and grocery businesses in sanitation, cleanliness and protocols to make them feel less crowded,” Spakes said.

Age of Delivery Has Arrived May 4 2020
John Weeks portioning out locally sourced strawberries to be sold as part of the cafe’s new grocery offerings. ( Karen E. Segrave)

Age of Delivery Has Arrived May 4 2020
Alex DerGazarian packs up a curb-side order for a customer at The Root Cafe in Little Rock. ( Karen E. Segrave)

Age of Delivery Has Arrived May 4 2020
Andrew Hastings, left, accepting a curbside order from the Root Cafe’s Kevin Hamman in downtown Little Rock ( Karen E. Segrave)

Restaurant or Grocery?

Shankar, the Texas A&M researcher, sees a case of “once bitten, twice shy.”

“This is the first pandemic, but it isn’t the first frightening outbreak,” he said. “There was SARS, but it had little impact, then H1N1 flu, followed by Ebola, and all the outbreaks weren’t as bad as this one. People are thinking I have to do this for good now, that this might be the new normal.”

The dining industry is another sector peering into a murky future, with restaurateurs like Jack Sundell of the Root Cafe on Main Street scrambling for their very existence. He’s been able to keep 16 of his 35 employees and about half his revenue by selling meals curbside and filling grocery orders from his food-service supply chain.

Overall, 98 of 191 restaurants on a list compiled by the Little Rock Convention & Visitors Bureau are offering delivery, either by employees or through services like Bite Squad or Grubhub. Almost all the others are packing meals for takeout or curbside pickup.

Last week, Sundell was in his sixth week of curbside-only meals, selling breakfast, lunch and a limited dinner. His sales were off by more than half, but last week was his best yet since coronavirus precautions closed his dining room.

“At the end of five weeks of this, we were down 44% in sales compared to the same weeks a year ago,” he said. “So we’re settling into a new normal that I think will last even after dining rooms reopen,” he said.

The restaurant is a mini-grocery now, too, bagging up phone orders and taking them to the parking lot. “It’s a new thing for us, but we wanted to offer convenience for our customers and some steady income for our farmers,” Sundell said.

The Root is selling locally sourced eggs, fruits and vegetables in a downtown zone where organic options are few, said Sundell, who gets 225 dozen eggs a week from a farmer in Dover (Pope County), and pounds of produce from other local sources.

“We’re selling some value-added products like Loblolly ice cream by the pint, maple syrup from a small syrup farm in Wisconsin,” Sundell said. “We’ve even got latex gloves and toilet paper because those items are available in the food service supply chain. In fact, we’ve got lots of toilet paper available from our distributor.” The grocery service is “something we’d like to do a small version going forward. It’s nice for our customers seeking out local food.”

Age of Delivery Has Arrived May 4 2020
Nicholas Dziurkowski, pharmacist and partner at The Pharmacy at Wellington in Little Rock, ringing up a refill for delivery. Delivery sales have about doubled since the pandemic, he estimated. ( Karen E. Segrave)

Age of Delivery Has Arrived May 4 2020
Jenny Stephens, left, and other pharmacists work to fill prescriptions at The Pharmacy at Wellington in Little Rock. ( Karen E. Segrave)

Age of Delivery Has Arrived May 4 2020
Steven Guatemala heads to the delivery car with prescriptions from the Pharmacy at Wellington in west Little Rock. ( Karen E. Segrave)

‘People Love It’

Kevin Shalin, a Little Rock food writer and author of the Mighty Rib blog, listed the Root, the Purple Cow and the Butcher Shop in Little Rock as restaurants serving as groceries or small meat markets these days. Other businesses in that line include Terri-Lynn’s in Little Rock; the North Little Rock location of David’s Burgers, which has a meat market; and U.S. Pizza, which is selling essential items at three locations in Little Rock and North Little Rock. Rabbit Ridge Farms in Bee Branch (Van Buren County) is delivering meat at a flat rate of $15 per order in Arkansas, Shalin said.

“Restaurants are really taking a look at what best suits them, and how they can stay financially afloat during this time,” he told Arkansas Business. “Food delivery is nothing new to many restaurants,” he said, pointing to pizza parlors and Chinese food delivery. “But I think what’s clear is that delivery either to your home or to your car has come to the forefront, and restaurateurs are adjusting to that. People love it, and that’s certainly not going to go away.”

Off-site dining has been a growing trend for several years, he said, but he hasn’t tracked food deliveries by Lyft and Uber drivers looking for work as fares decline. “I think they’re seeing that mainly in some bigger cities and markets,” Shalin said.

Nicholas Dziurkowski, pharmacist and partner at the Pharmacy at Wellington in west Little Rock, said his delivery orders are up to “around 30%” of his sales, about double the usual proportion. “It’s continuing to grow, and we’re open for business only through the drive-in; nobody is coming in the store.” Some policies have changed in deliveries, a service the pharmacy was already offering. “Nobody has to sign, and we’re leaving things at the door, no contact.”

The store has about 30 employees, including two all-day delivery drivers. “We’re just trying to keep all of our employees and patients healthy,” Dziurkowski said. “As for predictions, I have no idea.”

Age of Delivery Has Arrived May 4 2020
Justin Hurty, general manager at The Root Cafe in Little Rock delivers a curbside order to a customer. ( Karen E. Segrave)

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