But it's uncertain whether all of Peapod's partners will buy in. Some traditional grocers are doing just that. The company declined to comment on the initiative, but industry insiders say it's the start of a trend. HomeRuns operates from a distribution center in Auburndale, Mass., and delivers groceries to 23 towns. Hannaford stocks the center with nonperishable items from its Scarborough, Maine, warehouse.
Perishables come from local suppliers.
The company can offer food prices that compete with those of traditional supermarkets because Hannaford buys food at volume discounts for 142 stores. Owning its own information systems and delivery fleet appears to have paid off, too. Whether traditional grocers venture out on their own or choose a Web partner, they are increasingly using the Internet for home delivery. But that doesn't mean grocery stores will go away. However, the lines are blurring between real-world and virtual grocery stores.