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SmartCentres introduces online grocery service

Penguin Fresh service offers farm-fresh products for next day pick-up

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The burgeoning online grocery business has an unlikely new participant, with mall developer SmartCentres launching a click and collect service called Penguin Fresh.

The service launched in mid-October, with Egil Moller Nielsen, senior vice-president of e-commerce at SmartCentres in Vaughan, Ont., saying that customer adoption is “going pretty fast.”

Nielsen won’t reveal how many people have registered for Penguin Fresh, but says it is currently fulfiling multiple orders a day

“People really like the concept, so the amount of people signing up and registering on our website is growing exponentially; the number of website visitors has surprised me a lot,” he says.

Penguin Fresh is a further evolution of Penguin Pick-Up, a free service introduced last year that enables customers to send any online order to a SmartCentre location for pick-up at their convenience, even if the item was not purchased from one of its mall tenants.

The new service is entering an increasingly crowded space populated by major grocery chains including Loblaws and Walmart, as well as entrenched delivery services like Grocery Gateway. In addition, a rash of delivery startups like Urbery–and, at some point, Instacart–has begun flooding the market.

READ: InstaBuggy delivery service launches in Toronto

Nielsen says that quality is one of Penguin Fresh’s key differentiators. It is currently working with Toronto-area wholesalers Hilite Fine Foods and EverGreens Fine Fruit and Vegetables, both of which supply restaurants, hotels and golf clubs in Toronto.

“[They] go to the Ontario Food Terminal every morning at 3 a.m. and select the best products for their customers, and the products you buy on Penguin Fresh is the same selection,” said Nielsen. “They are prime products.”

The company also works with Sanagan’s Meat Locker and boutique restaurant West City SnackBar.

Orders placed before 3 p.m. are ready for pick-up the next day at 3 p.m., with suppliers doing the picking and packing during the morning. “It’s obviously very fresh because it’s only 12 hours old,” says Nielsen. “That is why we call it the fresh difference.

READ: The Instacart effect

“Our products are sourced as close to the farmer as we can,” he adds. “We say we’re like a farmers’ market online. When you buy from us you get good high-quality products.”

The Penguin Fresh service is currently available at two SmartCentre malls in Toronto suburbs of Vaughan and Thornhill. Nielsen says the goal is to add one to two new locations each week, with Penguin Fresh available nationwide within the next year or two.

“We’re rolling out quite aggressively,” he says.

An estimated 95% of Canadians live within 15 kilometres of one of the more than 250 SmartCentre locations.

READ: Retailers respond to shoppers’ demands for speedy delivery

Penguin Fresh’s prices are similar to those of medium to high-end grocery chains says Nielsen, “but our quality is better.” Penguin Fresh charges a fee of $7.50 for orders of less than 20 items, and $5 for orders of more than 20 items.

While SmartCentres include grocery retailers (such as Walmart) among their tenants, Nielsen says that Penguin Fresh is catering to customers who have chosen to shop online and is also gives them another reason to come to the mall.

Currently, about 43% of Penguin Pick-Up customers go on to shop at a store within the SmartCentre mall.

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