Albertson's Gains Webvan Slack, Expands

SEATTLE-Webvan may have added insult to an injured commercial real estate market, but its doing wonders for Albertson’s online division in the Seattle area and elsewhere. In Seattle, orders are reportedly up by more than 300% this week as Webvan shoppers choose an alternate provider and others give it a try for the first time. Orders also jumped in Chicago.

Alas, it probably doesn’t mean Albertson’s will need any of Webvan’s recently vacated distribution warehouses. As of April, the Boise, ID-based grocer uses its brick-and-mortar stores to fulfill pick-up and delivery orders. Thanks to the boom, Albertson’s is expanding its Puget Sound delivery south to Tacoma and north to Marysville ahead of schedule, and is considering picking up the pace even further.

“By bringing our bricks and mortar investment to bear on the online portion of our business, we have created the online model with virtually no financial outlays, other than system development time and back-end cost,” says Patrick Steele, Albertson’s executive vice president of information and technology. “n traditional grocery terms, handling this increase in volume would be roughly equivalent to building a super-store in three weeks–a process which normally takes about a year.”

Albertson’s says it has begun delivering to several new ZIP codes in Marysville and Tacoma. The company has designated one store in each of those cities as a “fulfillment center” and will begin delivering groceries from those stores to customers July 23. Until then, existing fulfillment stores in other cities will handle the deliveries.

Albertson’s began delivering groceries in June 2000, using Seattle as the test market. This past April, Albertson’s closed its Eastside distribution warehouse and began filling orders out of several existing retail stores. The company currently operates more than 2,500 retail stores in 36 states.