DRIVE-THROUGH PICKUP TEST FOR INTERNET ORDERS IS SET

DENISE ZIMMERMAN

MEDFORD, Mass. -- The newest spin on Internet grocery shopping services -- which has shoppers picking up their orders at a drive-through facility here -- was to begin limited testing this weekend and will be more widely available to the Boston market next week.

Unlike other computerized shopping programs that include home delivery and fees ranging from $6 to $10 per order, the new approach is viewed as the first based upon customer pickup and no service charges, industry observers told SN.

The startup company, Groceries to Go, will begin accepting orders through its World Wide Web page (http://www.gtg.com) June 15, said David Cuthbert, president. Computer users equipped with Web browsers will be able to register on-line for free, place an order and indicate a time window for pickup.

The wholesale division of Star Market, Cambridge, Mass., is supplying product to Groceries to Go, which assembles orders in a 4,000-square-foot facility here, he said. Star Market is working with another startup shopping service, Streamline, Westwood, Mass., which delivers orders when customers are not at home by accessing secured storage units located in garages or cellars.

Industry sources are divided on whether a customer pickup-based shopping service will develop a following. Most agreed, however, that the format that ultimately succeeds in capturing a significant share of grocery dollars has yet to be developed.

"There are great ideas out there, but there are blanks that

just haven't been filled in when you look at the total business, the actual economic model," said an executive at a major retail-wholesale company who requested anonymity.

However, Dave Skeels, principal in the national retail practice, CSC Consulting, Waltham, Mass., said a customer pickup-based shopping service may find a niche where home delivery has fallen short. Customers don't like being tethered home for lengths of time to accept delivery, he said, and frequently they have been disappointed by ice cream that melted en route.

"More than likely I would see the consumer using this service as an alternative to stocking up at a warehouse club once a month" for commodity items, he added. For other items, such as prepared meals, there may be opportunities for a service like Groceries to Go to partner with retailers, he said.

Cuthbert said he's spoken with retailers as well as local restaurants to discuss possible alliances such as delivering restaurant-prepared meals and building a drive-up window for an existing supermarket.

"As food retailers move to driving more of this pickup or home delivery, they are in a sense inviting new forms of competition," added Skeels. "They are inviting 'disintermediation,' the opportunity for a supplier or manufacturer to just bypass the retailer" and sell directly to the consumer.