Make A List: Groceries To Be Sold On The Web

BELLEVUE - A new Bellevue company is bringing back the tradition of delivering groceries to your door - but with a computer-age twist.

HomeGrocer.com, whose owners have a national chain in mind, is building a virtual supermarket for busy shoppers who prefer to pick their groceries from a Web page than race down store aisles on the way home from work.

The three Vancouver, B.C., entrepreneurs who founded the company have raised millions of dollars in capital on the premise that many Americans are ready to order groceries over the Internet.

"Next to cleaning, grocery shopping is the most-hated activity around the house," said CEO James Fierro, who began studying the market for on-line grocery sales three years ago.

Based in 70,000 square feet of warehouse space just east of downtown Bellevue, the company is scheduled to launch a fleet of trucks to make home deliveries in the Seattle area early next year.

The partners chose Bellevue for their first location because of residents' extensive use of the Internet, the area's high standard of living, and the availability of warehouse space close to upscale Eastside families, Fierro said.

"The people in our research who have expressed the most interest in our service are people who are busy, who have something better to do with their time," he said. "Those people tend to be higher double-income families, usually with kids."

Fierro, 40, owns a Toronto marketing firm that works with major food distributors. His partners are food-brokerage owner Mike Donald, 40, and Terry Drayton, 37, former owner of a bottled-water company.

HomeGrocer.com is not the first to try to sell groceries on-line. The most formidable competitor is Peapod, a Skokie, Ill.-based company that went public earlier this year. From its Web site at peapod.com, Peapod increased its base of member-customers from 21,200 to 56,300 people in eight cities during the past year. But the company lost $8.8 million on revenues of $41.6 million during the first nine months of 1997.

Peapod shops for customers at established supermarket chains and charges a premium above retail grocery prices. In San Francisco and San Jose, members pay a monthly membership of $4.95 and a shopping fee of $9.95 or 9 percent of the bill charged by local partner Safeway.

HomeGrocer.com, by contrast, expects to do a higher-volume business by buying groceries wholesale and distributing them from its own warehouses. There will be no delivery fees, and Fierro said he expects prices to be comparable to those of traditional supermarkets.

When the company was conducting market research, participants in focus groups welcomed the opportunity to avoid the hassles of going to the grocery store, Fierro said.

"People said, `You mean I can sit with a glass of wine after the kids have gone to bed, in the comfort of my bathrobe or pajamas, and place an order?' "

Keith Ervin's phone message number is 206-515-5632. His e-mail address is: kerv-new@seatimes.com