HOMERUNS ADVANCES WHILE OTHERS RETREAT

JON SPRINGER

BURLINGTON, Mass. -- HomeRuns.com, the company that dodged the e-commerce capital crunch earlier this year, last week debuted service in Washington, the first market it has served outside of its home base in Boston.

The former Hannaford Bros. subsidiary received a $100 million investment in January. In the months since, while would-be competitors have retrenched or sold out at bargain prices to raise cash, HomeRuns was putting its well-timed investment to work, according to Alison Berglund, vice president of marketing and business development for HomeRuns.

"The timing was fortuitous, I'll say that," Berglund told SN of the $100 million investment led by New York-based Cypress Group. (Hannaford, Scarborough, Maine, remains a minority investor and the company's major grocery supplier.) "But we've been encouraged by what we've been able to do over the last six months. We've been focused on building our infrastructure in technology and people and we feel we're ready to expand the business."

The company said it would serve as many as 600,000 Washington-area households from a 135,000-square-foot distribution center in Landover, Md.

HomeRuns will assess a $2.50 per order delivery charge, and its minimum order is $50, Berglund said. The delivery charge was also recently added in Boston. Berglund said the delivery charge was added after "re-evaluating" the business.

"It was a critical step," she said. "We realized there was a value to the service, but we didn't want the cost to be onerous. We researched it with our customers and they seemed to think it was worth a small fee."

HomeRuns does not make its sales figures public and Berglund would not comment on specific customer counts or say whether the company was losing money on deliveries, as a number of dot-com grocers offering free delivery have. As for its financial performance, Berglund said HomeRuns is still "driving toward profitability."

In Washington, HomeRuns will serve a highly wired community that is still relatively new to on-line grocery services. Its launch comes at the same time that Peapod takes over the former Streamline.com service, which operates out of a warehouse in Gaithersburg, Md.

Streamline.com, operating in Washington for less than a year, sold its service to Chicago-based Peapod this fall. Peapod will co-brand its Web offering with the area's leading supermarket chain, Giant.

Berglund said HomeRuns knows how to compete, having gained the largest market share among several competitors, including a Peapod-Stop & Shop partnership, in Boston. It also recently signed a deal with the New York-based advertising agency Deutsch, which was preparing a campaign including television, radio and direct mail.

The company's message is "We deliver quality of life."

"The quality of our products and service is what makes the difference for us," she said.

HomeRuns said earlier this year that its investment could power expansion to 20 new cities within three years, starting with the East Coast. Though the company hasn't made an official announcement, it appears Baltimore could be next. The company is already advertising positions for employees there.