Previously the city’s number 1 online grocery retailer, Fresh Direct is now seeing competition from its competitor, Peapod. Peapod’s director of marketing says that they offer the prices of suburban supermarkets in NYC.
Peapod is the largest Internet grocer in the United States due to its partnership with Stop & Shop and Giant supermarkets but didn’t enter Manhattan until 2011. They are offering free delivery to new customers and prices lower than Fresh Direct on everyday goods. Tom Meyvis, a New York University Stern professor of marketing, said that there is room for two competitors and recommended that Peapod focus on the less gourmet segment of groceries.
Although Manhattan offers a difficult environment for delivery trucks, Bloomberg Business Week suggests that it’s densely packed and Web-savvy residents make for a promising market for online grocers.