Safeway broadens online grocery to southern California
The online retail grocery business is gaining strength on the West Coast, where Safeway Inc. is expanding into the San Diego area. It already offers online shopping in San Francisco, Portland, Ore., and Vancouver, Wash. Safeway is head-to-head with Albertson’s Inc.’s Albertsons.com, which serves the same markets.
"We¹ve gotten a very good response from people who were used to WebVan and HomeGrocer," says a spokesman for GroceryWorks, which operates the Internet-based home shopping and delivery service for Safeway and its U.K. affiliate, Tesco PLC. Safeway owns 50% of GroceryWorks; Tesco owns 35%. Private venture capitalists own the remaining 15%.
In San Diego, Safeway offers its online services through Vons.com, the Internet-based sales arm of its Vons supermarket division. Vons.com delivers to 65 Zip Codes and 24 cities in the San Diego metro area, where groceries ordered online are picked and shipped from a limited number of Vons supermarkets. Delivery is scheduled within a 2-hour window. Customer pick-up is not available.
Although Pleasanton, CA-based Safeway has not made available performance metrics of its online grocery sales, it has received positive feedback through its telephone customer service center, the spokesman says. For example, customers say they particularly like the online notes function, which enables them to write special product preferences when ordering. Notes such as "I prefer really ripe tomatoes" can be sent along with all other ordering information to the fulfillment store’s computer, which forwards it over a wireless connection to a small computer mounted on the in-store shopping cart used by the professional shopper handling the order. A typical professional shopper shops for five or six customers at a time.
Most online sales appear to be coming from existing Safeway and Vons customers, though the company figures it is picking up customers from people who typically shop at small groceries without an online service. Safeway is considering expansion of its online service to supermarket chains it owns in other parts of the U.S., such as Dominick’s in Chicago and Tom Thumb in Texas, but has no definite plans, the spokesman says.
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