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May 4, 2002

Click Here

Ordering Groceries in Aisle 'www'

By TERRY PRISTIN

Tatiana Hoover lives two blocks from the D'Agostino supermarket at 91st Street and Columbus Avenue, and yet for the last few months she has been ordering her groceries from that store via the Internet.

"It's decadent in a way," said Ms. Hoover, an editor of children's videos and the mother of three boys, 11 to 15. "I could just go down the block. But with three kids, and being very involved with baseball and school stuff, I couldn't find time to shop."

Not so long ago, online grocery shopping seemed to be another casualty of the dot-com fizzle. Investors lost huge sums of money when companies like ShopLink, Streamline and HomeRun were unable to attract the business they needed to support the warehouses they were building at a frantic pace. Online grocery shopping proved a hard sell even with people who were comfortable buying books and compact discs over the Internet.

One company, Webvan, which had once been expected to bring 1,900 jobs to the New York area by opening warehouses in the South Bronx and Bergen County, N.J., collapsed more than a year ago.

Despite these failures, Internet grocery shopping is quietly making something of a comeback. This time, however, the online grocer is likely to have the name of the local supermarket.


Don Hogan Charles/The New York Times
Richard Tarrant, of MyWebGrocer.com, scanning the price of a can of soup for the D'Agostino Web site. More local markets are offering customers Internet grocery orders, for delivery and for pickup.


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In New York, D'Agostino began offering online service a year ago, introducing it gradually throughout its chain. Internet shopping is available at all 23 D'Agostino stores in Manhattan, Brooklyn, Riverdale, the Bronx and in Westchester County. About 600 customers use it regularly, said David D'Agostino, the director of online services. In the city, online customers have their groceries delivered; in Westchester, they pick them up from the store.

Another New York grocer, Gristede's, is offering limited Internet service through the easygrocer .com Web site to customers within reach of its store at First Avenue and 72nd Street. But John A. Catsimatidis, the chief executive of Red Apple Group, the supermarket's parent company, remains a skeptic.

"It's a pain in the neck," he said. What is particularly tough, he said, is trying to guess a customer's tastes. "Is it ripe, is it too ripe? What size tomatoes do they want? I'm not saying that some day online grocery shopping won't become a reality, but not within the next decade."

Elsewhere around the country, chains like Safeway and Albertson's are also experimenting with online services. Peapod, an online grocery service that is now affiliated with Stop 'N Shop, is available at 26 stores in Connecticut and Westchester and on Long Island.

What makes the new model of Internet grocery shopping different from its predecessor is that orders are filled from a neighborhood store rather than a centralized warehouse.

A customer logging on to the D'Agostino site — www.dagnyc .com — is asked to pinpoint her neighborhood on a map and then select from the 16,000 products available at her local store. Her order will be filled by store staff members working from a printout, and delivery will be made at an arranged time. D'Agostino recently began offering same-day service for orders placed before 5 p.m.

Prices are updated each morning, said Richard Tarrant, the chief executive of MyWebGrocer .com, the company that designs and services D'Agostino's Web site. (Some of Mr. Tarrant's other clients use technology for hand-held devices. The technology organizes the order by aisle, scans the merchandise and signals the employee if the wrong item has been placed in the cart.)

D'Agostino has some experience with the problems that led to the downfall of earlier Internet grocers. In the mid-1990's, the company tried out a telephone service that used a central warehouse and quickly learned that the high cost of maintaining it could not be paid by delivery charges, Mr. D'Agostino said. "We couldn't charge enough for the service," he said.

The cost of the service remains a concern for many online shoppers. D'Agostino recently lowered its online delivery charges from a flat $13 to $10 for orders under $75 and $8 for orders of more than $75. People who shop in the store pay $3 to have their groceries delivered, no matter how many bags.

In Manhattan, where grocery stores are plentiful in all but a few neighborhoods (Harlem and Lower Manhattan are among the exceptions), it might seem odd that some shoppers would choose pointing and clicking over visiting a store. But some people have welcomed online shopping as an updated version of a practice that used to be common in New York: phoning in an order. These days, telephone ordering is usually limited to high-priced specialty stores.

Claire Pellegrini Cloud, a singer with two teenage sons who lives on the Upper East Side, said she used to phone orders to a Gristede's on Madison Avenue — one of only two Gristede's that still take phone orders — when she switched to D'Agostino's Internet service. "It's important to me as a busy mom, and also as a professional," said Ms. Cloud, who orders late at night. "It's a luxury New Yorkers have to have, given how fast-paced our lives are."

Online shopping is still a minuscule part of the supermarket business. Mr. Tarrant, who has 59 other clients around the country in addition to D'Agostino, said that about 1 to 3 percent of sales came from the Internet.

But chains are finding new customers, Mr. Tarrant said. Lou Frederick and Jinnie Spiegler, who live in the Prospect Heights section of Brooklyn, were not D'Agostino customers until they began shopping online at the nearest store, about a mile away in Park Slope.

Without the Internet service, "we wouldn't go there," said Mr. Frederick, a high school teacher who does not own a car. He said the prices at D'Agostino tended to be much higher than they were at the local market, but the produce was fresher.

For supermarket operators, the biggest headaches occur when the supermarket runs out of an item. Customers can indicate whether they will accept substitutions.

"I don't allow substitutions," Ms. Cloud said. "I don't want to get the orange juice with the pulp when my family won't drink it."

But Mr. Frederick said he lets store employees make substitutions because he feels they won't send him salted pretzels if there are no salt-free ones. "I think they get it," he said.


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