For a lot of markets, having just one makes sense. He added that being able to demonstrate profitability on the unit level is important when HomeGrocer goes back to the capital markets to finance its further expansion. With this month's opening of its Dallas facility, HomeGrocer will get its first taste of competition. Peapod also operates in Dallas, and Webvan has signed a lease in preparation for entering that market. Webvan in turn will up the ante in HomeGrocer's home territory when it begins Seattle operations in October, and competition will be stiff in Peapod's stomping ground with both Webvan and HomeGrocer saying they will open facilities in Chicago this year.
Profitability remains elusive for the main online grocers.
By adjusting its game plan to generate operating profits more quickly, the company is hoping to conserve capital and reassure investors.