Too Busy to Shop for Food? Use a Computer to Do It

When given the choice between going grocery shopping and doing just about anything else, Sara and Andy Hunter will almost always choose anything else.

Two jobs and two children equal zero free time for the couple, squeezed between the office and the kids' indoor soccer practices and homework.

"We need a definite lifestyle change in terms of shopping," says Mrs. Hunter.

Enter Peapod Inc. of Evanston, Ill. The company lets you order groceries by fax, by phone, or by its Internet on-line service - then delivers the bags to your door. And while they hope to add another ordering option - interactive TV - next year, on-line shopping is where the action is.

Peapod is the leading company in this budding industry, an industry that targets families like the Hunters - wearied by the weekly trek to the grocery store.

"Our founders saw that in the '90s, people were going to have less time," says Derrick Milligan, a Peapod spokesman. "We serve time-starved, dual-income professionals."

So why haven't shoppers all gone on-line? Price. The cost to subscribe is $4.95 a month and each delivery costs $4.95 plus 5 percent of the bill. (A $2 to $8 tip for the driver is also common.)

The fees pay for Peapod employees, who set up shop behind the supermarket floor with a fax and a computer. The service is offered in grocery chains in five big-city markets: Stop & Shop in Boston, Jewel-Osco in Chicago, Safeway in San Francisco and San Jose, Calif., and Kroger in Columbus, Ohio. They don't charge Peapod anything but get more business.

At each store, Peapod shoppers - employees trained to scour the aisles for the best produce - collect the groceries shortly before a designated delivery time - a 90-minute window in which the customers will be home to receive the delivery.

On this day, a Peapod driver arrives at the Hunters' about halfway through the delivery period. Mrs. Hunter takes stock: All but six of the 55 items she ordered arrive, and someone from Peapod had called to warn her of the omissions. Otherwise, everything is in good shape: no bruises on the fruit, and the meat still cold.

But her on-line odyssey almost didn't happen. She twice threw away a Peapod direct mailing that included the software needed to run the service. Potential customers can get the software by calling 800-573-2763 or downloading it from Peapod's Internet site (www.peapod.com). Hunter says the software is easy to load and added that her family's switch to on-line shopping is a permanent one, not just an occasional quick fix.

The Hunters are among 25,000 families now using Peapod. Milligan says the company hopes to capture 1 percent of the $400 billion grocery industry in the next decade.

But along with expanding the business comes a more practical challenge: turning a profit.

"No one offering this service, to my knowledge, has made money doing it," says Kevin Sheehan, president of Shopping Alternatives, another on-line grocery service. "[To stay alive] you keep bringing in investors who believe in the concept and believe at some point it will make money."

For 2-1/2 years, Mr. Sheehan's Baltimore-based company had worked with grocery chains in Boston, Atlanta, and Minneapolis. Recently, however, Shopping Alternatives discontinued its service. Nonetheless, if the business didn't have potential, Sheehan says, "we'd be gracefully stepping aside. But we're not. There is a way ... to make money."

The company is set to unveil a new system for receiving, collecting, and delivering orders that Sheehan hopes will put them in the black. He would not discuss the changes (to be announced in about a month) in detail, but he says Shopping Alternatives will dispense with the industry-wide practice of linking with retail grocery stores, as Peapod does. "We will be taking more responsibility for all steps of the process," he says.

But he still predicts that the most receptive market will still be the time-pressed family - drawn to the service for its convenience and ease.

That's why Hunter switched.

The hardest part, she says, may be finding the 90-minute blocks when someone will definitely be home to receive the groceries. Even so, she adds, being able to stay home for that time is far better than having to go out shopping.

"In that stretch of time we could eat and start on people's homework," she says. "Going out shopping is brutal.... Now all we need is an on-line chef to tell us how to cook it."