March 25, 2011, 2:25 PM

Peapod does Manhattan

The web-only grocer now delivers to parts of New York’s Manhattan Island.

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Peapod, the country’s largest online grocer and a unit of Dutch supermarket company Royal Ahold, has expanded its service in the New York metropolitan area with delivery of online orders to several large sections of Manhattan.

The service, Peapod by Stop & Shop, leverages the warehouse operations of Ahold’s Stop & Shop supermarket chain to fulfill online orders. It competes directly with FreshDirect LLC, a New York-based online grocery retailer. Peapod is No. 47 in the Internet Retailer Top 500 Guide; FreshDirect is No. 70.

Peapod’s entry into Manhattan covers residents and businesses in the areas of Midtown, the Upper West Side and the Upper East Side, sections that include some of Manhattan’s wealthiest neighborhoods. The company says it plans to expand the Peapod by Stop & Shop service to additional Manhattan neighborhoods by the end of this year.

Andrew Parkinson, co-founder and president of Peapod, says he expects the new Manhattan service to grow by alleviating the hassle of shopping for groceries in a congested urban environment. "It's no secret that grocery shopping in Manhattan is a challenge,” he says. “With the high food prices, large crowds, long lines and limited retailer options, it's a strain on shoppers' wallets and patience. With our low prices, thousands of weekly specials and convenient delivery options, we look forward to giving New Yorkers a smart way to save money and time.”

Peapod is marketing the new Manhattan service through direct mail and online marketing, including exposure via Facebook and Twitter, a spokeswoman says.

Peapod already serves other areas of New York City and its surrounding metro area, including communities in the Bronx, Brooklyn, Queens, Staten Island and outlying suburbs in New York and New Jersey. In all, Peapod operates in markets from New Hampshire to Virginia in the eastern U.S. and in the Midwestern states of Illinois, Wisconsin and Indiana.

In a recent interview, Parkinson said Peapod plans to continue building on its relationship with Ahold’s supermarkets, including digging deeper into how consumers shop both online and in stores and developing mobile shopping devices that customers will be able to use in stores as well as online.

“Our association with Ahold’s Giant Food and Stop & Shop sets us apart in a lot of ways,” Parkinson says. Giant Food is a chain of supermarkets that primarily serves Washington, DC, and Maryland.

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