Many supermarkets here in New York City will deliver your order within a few blocks for a small fee, so 90-year-old ladies don't have to carry 20 pounds of groceries to their fifth-floor walk-ups. FreshDirect goes further: if you're lucky enough to live in their delivery area, it saves you even the trouble of going to the store. When you order through their Web site (www.freshdirect.com), they gather everything in a refrigerated warehouse in Queens, load it on a truck, and drive it to where you are.
This has the obvious disadvantage that you can't see the merchandise before you buy it. However, why do you look at it anyway? To make sure the cans aren't dented or dirty—which FreshDirect's aren't—and to make sure the meat isn't green and the bread isn't moldy—which, again, FreshDirect generally avoids.
Since delivery is so common here, however, FreshDirect advertises two things at least as heavily as convenience. One is, as the name implies, freshness. They claim their shorter supply chain allows them to deliver meat, dairy, and produce that are fresher than what customers can find at the supermarket. In addition, keeping their facility off limits to customers allows them to store different foods at a variety of different temperatures—produce alone has seven distinct climates. That said, I've gotten ice cream that was starting to melt, although everything else has been all right thus far. The other thing they tout is price. FreshDirect consistently charges less for foods than its brick-and-mortar competitors.
Here's how it works: The shopper peruses their Web site and picks items, as one does with a Web-based retailer. The minimum order is currently $40. Then you select a delivery time. Two-hour slots may be available as early as the next day; deliveries are afternoons and evenings, and all day on weekends. I've found they tend to arrive around the halfway point of that window. Items are packed in boxes with other things kept in the same temperature range; room temperature, refrigerated, and frozen goods are boxed separately, generally about four or five items to a box. After three orders, I can build a fort in my apartment. There is a delivery charge, right now $4.95, or the customer can choose to pick up his or her boxes at the warehouse. You're charged for your order when it's assembled for delivery, so that you pay the correct amount for items priced by weight.
It's easier to find things than in a standard supermarket—no guessing which aisle something is in—and fresh foods such as meat and produce are easier to find in the needed quantities. If you want two pounds of ground lamb, you'll get more or less two pounds of ground lamb. Meat is even offered unadorned or with a choice of marinades. Another benefit is being able to leave your cart and come back—instead of running out to the store every time you think of something you need, if you don't need it right away, you can add it to your list for your next order.
FreshDirect was launched by Joe Fedele in September 2002, and was turning a profit just 16 months later. Fedele, who'd had previous grocery experience with the upscale Manhattan supermarket Fairway at their Harlem store*, told Business Week he derived FreshDirect's business model from Dell's.
I note that as I write this, I have only just exhausted my introductory offer of $50 off. My enthusiasm may or may not dim hereafter, although even without the discount it's cheaper than other options.
Some information is from www.businessweek.com and www.gothamist.com.
*There is, unsurprisingly, a decided difference of opinion on exactly how much involvement Fedele actually had with Fairway Uptown. Signs in Fairway's main store assert that he owned another supermarket which went bankrupt, and Fairway then took over the space. | 
