Stater Bros. to Partner With Whyrunout.com for Grocery Deliveries
Nibbling tentatively at the online grocery business, Stater Bros. Markets on Wednesday announced a partnership with an Aliso Viejo home-delivery service that will allow south Orange County residents to order items from its supermarkets over the Internet.
Stater Bros. plans to begin the service next month with partner Whyrunout.com, a company that has been delivering dry cleaning, processed film and other goods as well as groceries to homes.
Stater Bros. will pay Whyrunout.com an undisclosed fee to make the deliveries. Online consumers will pay the same prices as shoppers at Stater Bros. stores, plus a $4.99 delivery fee. If the program is successful, the companies said the service will be expanded throughout Southern California, where Stater Bros. operates 155 stores.
The deal is part of a shifting realignment of the industry as bricks-and-mortar grocers contend with Internet competitors and the prospects of growing online supermarket sales. Forrester Research predicts that U.S. online food and beverage sales will surge from about $500 million last year to $17 billion in 2004, representing 3% of the nation’s overall grocery sales.
Stater Bros. is replacing Vons Inc. as Whyrunout.com’s principal grocery supplier; Vons is part of Safeway Inc., which this month announced its own home-delivery partnership with GroceryWorks.com of Dallas.
Stater Bros. and Whyrunout.com promised same-day deliveries for orders placed by noon, beating the next-day deliveries of leading online grocers like HomeGrocer.com and Webvan Group Inc.
Whyrunout.com, a start-up that currently has just eight delivery vehicles, spent about $1 million in venture capital last year. It initially had planned to build its own warehouses and buy products direct from distributors--the business model employed by HomeGrocer, which now delivers to 622 ZIP Codes in Orange, Los Angeles, Riverside and San Bernardino counties.
But Whyrunout’s chief executive, Dan Frahm, said Wednesday that his current plan is to pick up products from retailers, a strategy akin to that used by Pink Dot, a Camarillo delivery service that operates in much of Los Angeles and Orange counties.
“We’re doing this without reinventing supply channels or requiring anyone to put up new warehouses,” he said. “It’s the revenge of the retailers--their chance to compete against the pure e-tailers.”
Frahm said his service currently makes 30 to 50 deliveries a day and hopes to quadruple that amount within two months.
Stater Bros., which has 30 stores in Orange County, hopes to expand the deliveries throughout the region, spokeswoman Susan Atkinson said.
“This is a test for us to see how many customers there are who do want this service,” she said.
A similar partnership was announced two weeks ago by Safeway, which teamed up with GroceryWorks.com for a test in Texas. If all goes as planned, the company will be delivering Safeway groceries in 16 markets nationwide, including Southern California, by the end of the year.
