They love it. A lifestyle once expanded is not easily contracted. As the mother of two young kids, I have been relying on Webvan for over two years. Singhal is far from alone. Every major U.S. grocery chain now is testing online shopping in at least one market or planning to launch a service by the end of the year.
Online grocery can work in every market.
But the model will be different in each market, depending on the peculiarities of that market. To figure out what works best, the grocery giants are testing several models. In Boston and Washington, D.C., Royal Ahold runs a freestanding packing warehouse. Peapod negotiates for produce with local markets but is able to leverage Royal Ahold's purchasing power to demand low prices. By tailoring models to the market, the company says it will achieve operating profitability in all of its markets by yearend.