Streamline.com Inc. was the first Internet grocer selling a home delivery service to set up in the Washington area, but others have their sights set here, too.
The question industry analysts have is whether the fledgling Internet grocers--two of which sold stock to the public this fall--will have the staying power to achieve national expansion and eventually land in Washington.
For now, Streamline.com is the only one offering home delivery of groceries via the Internet in the Washington area. The company, based outside Boston, has 4,300 subscribers, including nearly 1,000 in Maryland, Virginia and the District, a company spokesman said.
The WebVan Group announced two weeks ago that it has leased the former Woodward & Lothrop warehouse in Springfield with plans to have the 300,000-square-foot warehouse operational either next year or the following year. WebVan, backed by Borders Books & Music co-founder Louis Borders, currently operates only in the San Francisco area.
HomeGrocer.com, based in Seattle, has said it, too, hopes to reach Washington next year as part of its plan to expand into 20 cities. Another player is Peapod.com, which started in 1990 and has struggled to reach eight urban markets so far. The company has not said when it might arrive in Washington.
In the low-margin grocery business, all these services are losing lots of money. Two--WebVan and Peapod--went public this year. Spokesmen for Giant Food Inc., Washington's largest food chain, and California-based Safeway have said they are studying e-commerce closely but are skeptical of how the online grocers are going to reach profitability.
Another recent Internet food entrant to Washington is Kozmo.com, which delivers snack foods along with movies and CDs that people order online. Kozmo.com stocks supplies in a warehouse on 14th Street NW. It sells and rents its goods. Delivery is free.
Aiming to be an Internet convenience store, the company said it will add pet food, beer, magazines and various comfort foods next year.
Food.com, another Internet service operating locally, allows people to order takeout food from their neighborhood restaurants and have it delivered to their homes. It has signed up more than 13,000 restaurants around the country, including many in the D.C. area.
Like several Internet grocers, Food.com recently added an e-commerce area that allows people to order food from its Web site and have it shipped to them. The suppliers in Food.com's merchant area include such Internet mail-order food providers as OmahaSteaks.com, MrsBeasleys.com, which sells cookies, and EthnicGrocer.com.
Peapod also recently announced it had expanded the number of nonperishable grocery items people can shop for from anywhere in the United States. It charges a flat shipping rate of $7.95 and promises delivery in four to eight business days.