Online Groceries

 http://blogs.wsj.com/venturecapital/2013/04/12/investors-stay-hungry-for-online-groceries-in-relay-foods-deal/?KEYWORDS=core+competency

Do you think retail grocers will be challenged to maintain sustainable competitive advantage with the emergence of online grocery options?
Not in the immediate future.  I do think there will be a merging of the online concept with the traditional bricks and mortar stores.  Like the article stated, many consumers are going to feel more comfortable buying products from a store and source they know is of the expected quality they are use to. 

Some grocery chains seem to have established core competencies in online grocery (Walmart, Safeway).  Assuming online grocery shopping rapidly increases its market share, how will those without core competencies in this area compete?
They have two possibilities, one seek a merger/acquisition with a company that does have a core competence of online retailing or two work on offering something in stores that online customers can't get.  Many of the boutique grocery stores in my area have developed little wine tasting events, sampling of products, even social events to draw in customers, the more they can offer these types of perks the more they increase their core competence on the brick and mortar side of the business, maybe they don't need to do both.

Is the online grocery offering really a core competency; i.e. does it meet the four criteria including: valuable capabilities, rare capabilities, costly-to-Imitate capabilities, and nonsubstituable capabilities?  Another way of asking this question may be: Does it really take much to compete in the online grocery business and might brick and mortar retailers be able to react quickly to any competitive threat in this area?
I don't think the online offering can be considered an competitive advantage, unless they are able to prove efficiencies in the delivery process, for example a special type of bag for frozen items, or efficient sorting and organizing on the delivery truck, or other types of logistical advantages.  I don't think the potential threat is that great, as most of these types of advantages can easily be replicated or redeveloped.