ON-LINE AMERICAN GROCER TAILORS ITS SERVICE

ANNE B. HOLLYDAY

SAN DIEGO -- American Grocer, an on-line shopping and delivery service here that launched its Web site last week, customizes its business approach for food delivery to consumers' homes.

The first phase of the on-line company's launch offers service to a limited number of San Diego consumers through the Web site www.sandiegogrocer.com. The company plans to expand the service to more residents by early June.

American Grocer said its business model is an Internet-based hybrid built upon the strengths and methods of traditional grocers, UPS and retail stores. "We've spent two years creating what we call an 'e-fillment model,"' said Chuck Jones, the new company's founder and chief executive officer. This model combines the best of a traditional fulfillment strategy with Internet technology and tailors both to the grocery business with a retail store-style service touch, Jones said.

As part of its effort to get and keep customers, Jones said, American Grocer's business model for picking, packing, shipping and managing the logistics of delivering food to consumers' homes is dedicated to offering fresh produce. Unlike Web grocers that take three or four days to deliver nonperishables through Federal Express, following its start-up phase American Grocer's delivery truck fleet will offer fresh bread and same-day delivery, he said.

"Our meats are cut the morning of delivery, and vacuum-packed so they stay fresh much longer. Our seafood slept in the ocean night before," Jones noted.

Delivery trucks also have four temperature zones to make sure that everything is stored at an appropriate temperature. To back up its effort to deliver goods that meet or exceed the advertised quality, American Grocer offers a 100% money-back guarantee on everything it sells, Jones said. "We're in business to see to it that customers get the quality of food they'd find in their favorite white-tablecloth restaurant delivered to their homes at prices equal to or below the major grocery chains," he said.

The new shopping service says its San Diego site will show profitability within six months if more than 5,000 subscribers spend an average of $83 per order, or the site garners total weekly sales of about $415,000.