December 31, 2003, 12:00 AM

Safeway.com a virtual supermarket for other merchant’s gift cards

Online supermarkets are all about convenience, and Safeway Inc.’s Safeway.com and Vons.com web grocery stores now offer other retailers’ gift cards. From retailers such as Starbucks and Old Navy, the cards are selling "better than expected," Safeway.com reports.

Supermarkets have been adding more product categories as a way to capture incremental sales while increasing convenience for customers, and some retailers even offer other retailers’ gift cards. Now Safeway Inc., which began selling multiple retailers’ cards in its stores a year ago, is offering them on Safeway.com and Vons.com.

“They’re selling better than expected,” says a spokesman for Safeway.com. “A lot of people like the capability to buy groceries and gift cards online.”

Jim Okamura, senior partner and a specialist in multi-channel retailing at consultants J.C. Williams Group, says Safeway.com appears to be setting a precedent. “This is the first I’ve heard of a retailer offering other retailers’ gift cards online,” he says.

Safeway.com and Vons.com started selling the gift cards over the Thanksgiving weekend. Safeway operates multiple brands throughout the U.S.

Safeway is making the cards available online only to customers who live within the 465 ZIP code markets served by Safeway.com in California, Oregon and Washington, and to customers of Vons.com who live within the 35 ZIP code markets that Vons.com serves in Las Vegas.

Safeway charges a $2.50 service fee for each shipping address in each gift card order. Although the cards can be purchased only by customers living within Safeway.com’s and Vons.com’s market areas, Safeway will ship them anywhere in the U.S.

Retailers participating in Safeway’s online gift card program include Blockbuster Video, Sears, KB Toys, Old Navy, Starbucks and Foot Locker. Safeway.com also lists The Home Depot, Toys R Us and The Sharper Image as future participants.

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