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Free shuttles can close the grocery gap

hat maintains its own fleet of vans to give customers a free ride home with their groceries; and three Ralphs supermarkets, also in the Los Angeles area, that contract with a shuttle company to offer the same service.

e owns nine vans that transport about 2,298 passengers a week, the report notes. The store is among the top-grossing supermarkets in the Los Angeles area. The cost of the van program, including drivers wages, maintenance and all other operation costs, is less than 1 percent of the stores gross revenues, researchers found.

The shuttle service offered by a Ralphs store on West Adams in Hollywood has a constant waiting line, said Terry ONeil, director of public relations for Ralphs Grocery Co. Vans run daily from 9 a.m. to 8 p.m., and offer a free ride home to any customer with a store receipt for $25 or more. Customers arrive at the store by their own means.

ONeill credits the shuttle with significantly reducing shopping cart loss at the store, and with generating good will among customers. If you walk and youre buying for a family, you cant get your groceries home intact and fresh, he said. We offer the shuttle as a customer service to these shoppers, and many of them have thanked us.

One section of the report is meant to serve as a business-plan template for any supermarket interested in launching a shuttle program. The report demonstrates how a store can calculate the break-even point for a shuttle service, outlines the pros and cons of leasing versus owning shuttle vans, and covers staffing needs, parking requirements, startup costs and a host of other basics. It also contains tips on everything from parking to marketing opportunities.

Some of our members already utilize shuttles in their businesses and have found them to be successful and profitable, said Peter Larkin, president of the California Grocers Association. This study provides further information and guidance for those who are interested in expanding the concept in
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Contact: Claudia Morain
cmmorain@ucdavis.edu
916-734-9023
University of California, Davis - Health System
8-Apr-2003


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