Costco to expand grocery delivery service in partnership with Shipt

Consumers will order and purchase more frequently if they can have the items delivered

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A Costco Wholesale warehouse location in Woodbridge, Virginia, January 5, 2016. AFP PHOTO / SAUL LOEB / AFP / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)

Costco is introducing a retail delivery solution launching in the Tampa, FL area for grocery items via a collaboration with Shipt, a member-based on-line store, MarketWatch reports.

Shipt is a Alabama-based service that provides unrestricted grocery deliveries for $99 annually in 35 cities. Plans call for Shipt to expand it’s operations into 15 more markets by the end of the 2017. This expansion will extend it’s reach to more than 30 million households.

Costco’s decision to enter the grocery delivery market reflects retailer’s desire to adequately address shoppers online habits, which includes grocery shopping. Large online and brick and mortar retailers especially have been increased their ecommerce offerings in the face of fierce competition.

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U.S. online grocery sales, totaled over $34 billion in 2014. Retails analysts estimate that sales could top $177 billion by 2022. Survies indicate that “about 12% of U.S. grocery shoppers bought groceries online” in 2016. Millennials between the ages of 25 to 34 purchased twice the overall average.