October 11, 2002, 12:00 AM

The ongoing boom at GroceryGateway.com

GroceryGateway.com, a home shopping and delivery service for the Toronto metropolitan area, has been more than doubling its number of orders each year since it began operating in 1999.

 

GroceryGateway.com, a home shopping and delivery service for the Toronto metropolitan area, has been more than doubling its number of orders each year since it began operating in 1999, Brian Miller, CTO of GroceryGateway Inc., tells InternetRetailer.com.

The company currently processes 1,000 to 1,500 orders a day, at an average value of $140, Miller says. He notes that GroceryGateway.com serves 105,000 households, or about 5% of the households in the Toronto metropolitan area.

Miller says the privately held, independent company attributes its growth mostly to word-of-mouth, plus the advertising it places on some billboards and on the sides of its fleet of about 100 trucks. It charges customers a delivery fee of $8 per order, but offers discounts of $1 or $2 for orders scheduled outside peak periods of mornings and early evenings.

When GroceryGateway started in 1999, it filled orders from existing stores in the Toronto area. But once it established market demand within the first year, it began filling orders from its own 50,000-square-foot warehouse. A year later it moved to a 300,000-square-foot warehouse.

The company initially expected to serve mostly high-income households, but learned that its customer base covered a wide range of income levels. "The common thread is customers who are time-starved," Miller says. He adds that GroceryGateway figures that it fulfills about 80% of its customers’ grocery needs, and that most customers still go to a store about once a month.

It has also learned to be ready for hikes in business during winter weather. "The first time a snowflake falls, business goes up," he says.

 

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