Peapod Continues Western U.S. Phase-out

Share this article:
Peapod Inc. will exit the San Francisco market on March 11. The closing of its fulfillment and marketing operations in the area will result in 100 layoffs.

Peapod, Skokie, IL, also closed operations last September in Columbus, OH, Austin, TX, Dallas and Houston.

These closings along with the San Francisco shutdown represent Peapod's strategy to exit western US markets - a plan that has been emerging since Dutch supermarket giant Royal Ahold became the majority owner of the Internet standalone last April. Peapod has meanwhile increased its focus on East Coast markets where Royal Ahold already has strong offline presences with its regional grocers such as New England chain Stop and Shop.

Peapod struck a partnership with Stop and Shop last summer that resulted in the fulfilling of orders in Boston, Long Island, NY, and Fairfield County, CT, with "fast" pick and pack centers. The centers are either located in small warehouses on the premises of Stop and Shop stores or in the mezzanines of the stores.

The online grocer also has designs on entering the Westchester County, NY, Philadelphia and New Jersey markets. Dates for the market entries have yet to be announced.

Otherwise, Peapod is currently taking orders in the northwest Washington, DC, Montgomery County, MD, and Fairfax County, VA, markets with its fulfillment center in Gaithersburg, MD. The company handles orders via a large warehouse in its other remaining market, Chicago.

Peapod also reported its financial earnings Wednesday, stating that it plans to raise $30 million in financing this year to remain solvent.

The online grocer reported losses of $23.8 million during the final three months of 2000, more than doubling the previous year's loss of $9.1 million. During all of 2000, the company lost $56.8 million, compared with losses of $28.5 million in 1999.

Company officials said overall sales rose by nearly 12 percent last year as strategies such as online coupons, longer delivery windows and tiered delivery fees based on the amount of goods ordered proved successful.

Share this article:

Next Article in Agency

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Agency

News Byte: Javelin Marketing Appoints Damron CMO

News Byte: Javelin Marketing Appoints Damron CMO

Longtime agency pro brings extensive healthcare industry experience to the agency.

John Wanamaker Is Dead, Long Live the CMO

John Wanamaker Is Dead, Long Live the CMO

A century-old motto isn't—and shouldn't be—relevant today. CMOs need to get with the times and put their customer knowledge to good use.

Unleashing the True Power of the Customer

Unleashing the True Power of the Customer

Retailers who harness customer loyalty program data can create a customer-centric competitive advantage.