Building a profitable service is difficult because grocery stores have painfully low margins. Remember dot-com flameouts HomeGrocer and Webvan? Peapod, a pioneer in the space, still delivers in such cities as Chicago, New York and Philadelphia, but recently it's resorted to opening actual pickup locations to make the model work. FreshDirect has come as close as anyone to building a brand around home grocery delivery, but it remains small, operating primarily in the New York area. Yet, Amazon seems poised to move into the business in at least two California cities.