HANNAFORD IS PITCHING 'HOMERUNS'

DENISE ZIMMERMAN

AUBURNDALE, Mass. -- Hannaford's Homeruns here, a new subsidiary of Hannaford Bros., Scarborough, Maine, has set up a dedicated fulfillment center exclusively for home shopping, with all aspects of the operation -- from order-taking to delivery -- run by Hannaford staff.

The program, called "Hannaford's Homeruns," offers home shopping and delivery services for free in the Boston market, where the chain has no stores.

Unlike other retail home shopping programs, all components of the service are kept in-house at Hannaford, a self-distributing retailer with 142 stores.

"It's completely in their control and that's a good piece" of the home shopping business model, said a local observer. Most other retailers contract with third-party order-taking and/or delivery companies and most charge some type of service fee.

The program, run out of leased space in a former furniture warehouse here, is headed by Tom Furber, general manager of Hannaford's Homeruns and vice president at Hannaford. He was unavailable for comment.

The company said product freshness and competitive pricing are the hallmarks of Hannaford's Homeruns, which processes orders over $60 for free but charges a $10 fee for orders of $30 to $60. Consumers can choose from among 5,000 items, including perishables, which are priced at local supermarket levels, a spokeswoman told SN. A competing retailer confirmed prices were in line with his and other chain stores.

Product picking from a dedicated facility -- rather than a retail store as Hannaford did initially, and as many retailers continue to do -- is more efficient and cost-effective, the company said.

"Homeruns provides produce that reaches customers faster and with less handling than when purchased in a retail grocery store," Furber said in a statement.

Hannaford officials would not discuss sales or orders processed since the late July launch in Brookline, Boston and Cambridge. The company did indicate order volume was meeting expectations and generating repeat customers.

"We are finding that people are fulfilling their total weekly shopping needs through this service," said Susan Pierter, spokeswoman, when asked how many orders met the $60 no-fee threshold.

Expansion plans for 1997 call for entering additional Boston market areas, she said.

The Boston area continues to see high levels of activity in home shopping and delivery programs. Stop & Shop, Quincy, Mass., customers are being serviced through Peapod, Evanston, Ill., and Shaw's Supermarkets, East Bridgewater, Mass., offers home shopping and delivery through Shopping Alternatives, Bethesda, Md.

In addition, Streamline, Westwood, Mass., and Groceries to Go, Medford, Mass., fulfill orders through their own dedicated facilities. (See related story, Page 20.)

Hannaford's Homeruns customers place orders by telephone or fax and the company indicated ordering by computer may be offered later. Ordering via interactive TV proved unsuccessful, said a source familiar with the program, but Hannaford said that technology may be revisited in the future.

The service is currently offered only in markets where Hannaford has no store presence.

"That's the beauty of their business model: they don't have any cannibalization of sales," said one source who has followed the program closely.

He noted that other strong features of the program include a limited but well-chosen selection of fast-moving items, the company's total ownership of the entire process and a prime warehouse site.

"It's a killer location because it's close to all the major routes that serve the densely populated area of the Boston suburbs," he added.

"Hannaford probably has this as close to right as anybody at this point. What we like about their model is it's affordable and that's what we think it's going to take to appeal to the mass market."

The source did point to two obstacles Hannaford must overcome to make the program work: order-taking technology and name recognition.

"The No. 1 issue is nobody here knows who the hell Hannaford is. When people see 'Homeruns' they don't know what that is, and then backing it up is 'Hannaford,' and people aren't familiar with the name because the stores they do have, which are really outside the trade area, are called 'Shop 'n Save.' "

Order-taking capability needs to expand beyond telephone and fax, he added, if the program is to be cost-effective and easy for consumers.