Safeway set to offer online home delivery in Seattle

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By Internet standards, Safeway’s announcement yesterday was retro.

The Pleasanton, Calif.-based food and drug retailer yesterday said it would offer an online grocery-delivery service to 34 cities in the Seattle metropolitan area starting July 28.

By Monica Soto
Seattle Times technology reporter

The grocer will compete with Boise-based Albertson’s, which has offered a similar service here since November 1999. Even Albertsons.com, though, was considered a late-comer to the market.

Kirkland-based HomeGrocer.com, whose peach-emblazoned logo trucks began rumbling on the streets of Seattle in May 1998, came to personify the Internet boom — and bust — for local residents.

After investing millions on an aggressive expansion plan, HomeGrocer merged with competitor Foster City, Calif.-based Webvan in June 2000. Before the combined company shut its doors in July 2001, Webvan burned through $800 million.

Safeway.com President Mitch Rhodes said his company is different from HomeGrocer and Webvan in several ways.

The online grocer doesn’t require a large investment because it plans to select items from six existing stores. It also carries the buying power and brand-awareness of its parent company, Safeway, which posted $32.4 billion in sales last year.

"We don’t have to spend $10 million just to get our name out there," he said. "We start with a brand on Day One."

Safeway.com plans to start delivering local orders from five Safeway stores in King, Pierce and Snohomish counties. It’s set to add a sixth store Aug. 11 in north Seattle.

The company plans to charge a delivery fee, which its predecessors did not at first. Many observers said such a fee was necessary to make money on smaller orders. Safeway is charging $6.95 for delivery, but has no minimum order size. The average delivery size for other cities, including Portland, Las Vegas and San Francisco, is $125.

Rhodes said his company chose Seattle because of its demographics and the weather.

"The more inclement the weather, the more likely people are going to say, ‘I’d rather have the groceries delivered,’ " he said.

Monica Soto: 206-515-5632 or [email protected]

Copyright © 2003 The Seattle Times Company

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