FreshDirect is ending delivery service to the Philadelphia and Washington, D.C., areas to sharpen its focus on its hometown metropolitan New York market.
The New York City-based online grocer announced the move in a blog post earlier this month. “To better serve our customers in the tristate market surrounding New York City, we will be expanding in our home markets in the coming years. Because of this expansion, we will be exiting the markets that are serviced by our Washington, D.C., and Philadelphia facilities,” FreshDirect stated in the blog.
A company spokesperson said online ordering for Philadelphia and D.C. shut down effective Aug. 29, with the final delivery day for orders in process being Sept. 3. Same-day afternoon deliveries in the D.C. market stopped on Aug. 23.
FreshDirect had served the Philadelphia area for nearly 10 years and the D.C. market for over seven years.
“For 20 years, FreshDirect has been integral to the fabric of food culture in New York City. As a homegrown, trusted, New York City brand, we are strengthening our commitment to providing service to the greater New York City tritate area, which is our biggest opportunity for future growth and expansion,” FreshDirect said in an emailed statement on Monday. “This strategy positions FreshDirect for continued long-term success, and further solidifies the company as an industry leader. We are excited to unlock new ZIP codes throughout the tristate service footprint and offer the freshest, highest-quality food to even more customers with the unrivaled ease, convenience and speed FreshDirect is known for.”
FreshDirect had begun serving Philadelphia-area customers in the fall of 2012 and D.C.-area shoppers in April 2015, with latter including two-hour service launched in late 2020.
Philadelphia and D.C., along with New York City, were among the key metro markets in FreshDirect’s seven-state service area, which included New York, New Jersey, Connecticut, Pennsylvania, Delaware, Maryland and Virginia. The online grocer operates primarily through a 400,000-square-foot automated fulfillment center and campus in the New York City borough of the Bronx.
“After much consideration, we have decided to focus on our home market in the New York City metro area,” FreshDirect explained in the blog post in an FAQ on why the company was ceasing D.C. and Philadelphia service.
FreshDirect’s service change comes as the e-grocer further integrates with Ahold Delhaize USA, which acquired the company in January 2021.
Boosting share in key metropolitan markets like New York City is a linchpin of Ahold Delhaize’s strategic plan to generate another $11 billion-plus in global sales by 2025. To that end, FreshDirect has partnered with supermarket chain Stop & Shop to help create an “omnichannel ecosystem” that brings more convenience, personalization and value to customers via brick-and-mortar and digital channels. The ecosystem concept is designed to capitalize on densely populated markets with strong affinities for Ahold Delhaize’s local supermarket banners.
“We made good progress with Stop & Shop and FreshDirect, where we plan to increase collaboration to accelerate growth and market share in New York City,” Ahold Delhaize President and CEO Frans Muller told analysts in a May conference call on first-quarter results. “I look forward to sharing more on this in the second half of the year.”
Ahold Delhaize USA also has steadily expanded e-commerce service in the Philadelphia and D.C. areas, respectively, through its grocery chains The Giant Company and Giant Food. Carlisle, Pa.-based Giant Company offers online grocery delivery through its Giant Direct and Martin’s Direct brands, while Landover, Md.-based Giant Food — one of the leading supermarkets in the D.C. market — provides the service under its Giant Delivers banner. Both chains also have stepped up brick-and-mortar expansion and store upgrades in those markets to help drive an omnichannel shopping experience.
Reflecting its heightened focus on metro New York, FreshDirect on Monday also kicked off a new marketing campaign (see video above) that targets on-the-go New York City consumers.
In the effort, a series of 30-second video spots depict New Yorkers trying to fit grocery shopping into their busy day and how FreshDirect’s online service provides convenience. FreshDirect said the videos — a parent juggling multiple tasks and a woman trying to split chores with her “couch-surfing” roommate — show how its delivery service can “keep it fast and keep it fresh while keeping everyone happy.” The spots close with the tagline, “for the food obsessed, by the food obsessed,” an evolution of the FreshDirect’s former “the obsession is real” tagline.
“Being a homegrown, trusted New York City brand allows us to understand not only the culture of food but the needs and expectations that New Yorkers have around food and groceries,” according to John MacDonald, chief marketing officer at FreshDirect. “We make sure our customers have the absolute freshest food, curated and responsibly sourced from the best places and delivered quickly right to their doorstep.”
FreshDirect added that the campaign also includes out-of-home ads that will appear throughout New York City, including at Citi Bike stations, in subway cars and stations, and at venues such as Times Square and Yankee Stadium. The online grocer, too, said it plans a social media push via TikTok that will showcase time-saving fall recipes “for go-getters and busy families.”
The campaign marks FreshDirect’s first integrated initiative with Cincinnati ad agency Curiosity, named as the grocer’s creative agency of record in March. Earlier this month, FreshDirect said it retained BAM Strategy, a Montreal-based digital agency, to help revamp its customer loyalty program.