Can Go Grocer Deliver on Its National Ambitions?

Following its entry into Milwaukee in 2022, Chicago-based Go Grocer will be bringing its urban grocer and C-store model to Florida, with plans to expand nationwide.

Founded in 2008 by brothers Paul and Greg Stellatos, Go Grocer operates 14 locations throughout Chicago and two in Milwaukee. The first Florida location, to open in Fort Lauderdale’s Flagler Village, is set to open later this year.

Often described as a mix of Whole Foods and 7-Eleven, the stores ranging from 3,000 to 7,000 square feet offer around 4,000 products, including grocery essentials, grab-and-go items, alcohol products, and an assortment of household goods that range from pantry staples to light bulbs. The food mix focuses on fresh, organic, and healthy offerings — including gluten-free, keto, and vegan products — but also locally sourced items.

“Go Grocer was founded on the desire to provide fresh, wholesome and specialty products to its customers,” Greg Stellatos told Voyage Chicago. “We also serve as an avenue for local producers and vendors to sell their products. We are passionate about working closely with our neighbors to cater each store to the specific needs of the area while maintaining our core vision.”

Go Grocer is also known for its prepared foods. He added, “We are one of the only small format grocery stores where you can get a salad made in house, a local draft beer, artisanal cheese, and fresh meat all in one stop. We are also open to at least midnight at most of our locations.”

However, Go Grocer has earned the most media attention for its potential around urban delivery. Business Insider reported in 2022 that Go Grocer rejected buyout offers from two rapid-delivery startups and Instacart in 2021 before launching its own app to directly target the ultra-fast delivery opportunity.

The delivery platforms were looking to use Go Grocer’s stores as mini fulfillment centers, which enables Go Grocer to deliver goods in Chicago in just seven to 12 minutes on a cost-efficient basis.

One plus of having stores, Paul Stellatos told Business Insider at the time, is that Go Grocer has been able to avoid the “$20 off first order” and other aggressive promotions used by rapid-delivery apps to acquire customers since it has an established base of in-store shoppers to convert into delivery users.

However, the major benefit is keeping costs down. Stellatos told Business Insider, “Our advantages in this game is that the expenses that dark warehouses incur, we don’t incur those expenses because we already have a hybrid profitable model.”

Other steps Go Grocer takes to support profitability include:

• Requiring a $15 minimum to support free delivery to ensure every order is profitable.
• Using existing staff for deliveries and gig workers if necessary, avoiding the negative economics of having couriers sitting around the store waiting for orders during slow times.
• Avoiding guarantees that deliveries will arrive in a certain time frame, such as the common “15 minutes or less.” Greg Stellatos told Grocery Dive, “The cost to maintain that promise of 15 minutes does not outweigh the benefit of being able to deliver in 17 to 22 minutes, and do that profitably.”

Paul Stellatos further believes that while many rapid-delivery startups, supported by venture capital, have prioritized growth, Go Grocer has benefitted by foremost prioritizing profitability since it continues to be self-funded. The business was profitable before launching delivery. He told Supermarket News, “We threw our hat in this chaos of rapid delivery, [but] sustainability for the long term is easier [for] us because we’re profitable in every stage of what we do. We can pay the bills from our stores.”

The ultra-fast delivery space, marked by the arrival of Gopuff, Getir, Gorillas, Buyk, Fridge No More, and JOKR in the early stages of the pandemic, has undergone a significant shakeout amid questions over the model’s viability.