Albertson's Inc. today announced plans to expand its online service in California, pledging its commitment to online sales despite the travails of Webvan, Peapod and other dot.com grocers.
The Fullerton, Calif.-based grocery chain plans to extend the service, available at www.Albertsons.com, to consumers in Los Angeles, Riverside and Orange counties.
The "bricks-and-clicks" option now covers most of Southern California, including service to 234 zip codes in Los Angeles County, 127 in Orange County, and 32 in Riverside County, the retailer said. The service is also available in San Diego County and the Seattle/Puget Sound metropolitan area.
A handful of Internet grocery retailers have collapsed since the dot.com boom of 1999 and 2000. The failure of Webvan — a $1.2 billion company that declared bankruptcy last summer, laying off workers and liquidating its assets — perhaps drew the most media attention. (Last month, a bankruptcy judge confirmed Webvan’s liquidation plan, paving the way for the distribution of about $25 million to creditors, according to ecommercetimes.)
Nonetheless, traditional grocers, which can take advantage of existing brand recognition and brick-and-mortar infrastructures, appear confident in the potential for online sales. Safeway entered the game last month, launching Safeway.com in neighborhoods in Portland and Vancouver. And Publix recently began test marketing its PublixDirect service in Florida.
Safeway also owns 50% of Groceryworks, an Internet-based home shopping service. The U.K.-based grocery firm Tesco owns 35% of that venture. And Royal Ahold, the Dutch supermarket giant, recently bought Peapod and is working to revive the struggling Internet site by associating it with Stop-N-Shop.
According to the consulting and research firm Jupiter Media Metrix, online grocery sales could grow from $1 billion in 2001 to $11.3 billion in 2006.
Stores as distribution centers
Albertson’s fills the online orders directly from existing brick-and-mortar stores, rather than from separate distribution centers. The company selected 10 centrally located stores in the greater Los Angeles/Orange County area for the online service, which offers grocery, pharmacy and dry-good items.
Shoppers can order their groceries online and have them delivered to their homes or offices within a 90-minute window. They can also pick up their groceries at a nearby Albertson's store. The retailer charges $9.95 for door-to-door delivery and $5.95 for pick up.
A total of 200 neighborhood stores in the region will offer the pick-up service, according to Albertson’s.
"The San Diego service has been a great success and we are seeing promising growth in the Southern California marketplace," David Simonson, president of Albertson's Southern California division, said in a statement. California customers are "enthusiastic" about the convenience, he said.
Albertson's, which operates 2,400 stores in 33 states, originally launched its online grocery service in Seattle in November 1999. The company expanded the service to 146 zip codes in San Diego County in October 2001.
-- Staff and wire reports