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Albertson's expands e-commerce arm

The grocer brings online shopping to the Los Angeles area in yet another move by a traditional chain to fill the void left by its dot-com predecessors.

Grocery chain Albertson's launched Internet operations in the Los Angeles area on Wednesday, an example of another traditional supermarket expanding its e-commerce reach.

Albertson's said the company now delivers groceries ordered online to about 400 neighborhoods in Los Angeles, Riverside and Orange counties. The Albertson's Internet unit already operates in the San Diego and Seattle areas.

Grocery titans like Boise, Idaho-based Albertson's and rival Safeway are attempting to fill the void left by companies such as Webvan, HomeGrocer, ShopLink.com and Kozmo, all of which have shut their doors during the past two years. Safeway launched Internet operations in Oregon and Washington state last month and is testing the online service in the San Francisco Bay Area.

A year ago, analysts predicted that brick-and-mortar grocers' scores of customers and multitude of stores--Albertson's has 2,400 in 33 states--would help them sweep into the business of selling groceries online. But when the dot-com supermarkets began to flop after burning through huge sums of cash, the traditional chains grew cautious and slowed the growth of their Internet units.

Only now do the large grocery chains appear to be ready to test the Internet waters. Besides Safeway and Albertson's, Publix Supermarkets last year introduced its Internet unit, PublixDirect.com, to areas of South Florida, and Dutch grocer Ahold has begun making home deliveries from its Stop & Shop stores.

Albertson's, which sees more than $37 billion in annual revenue, offers Web customers the choice of picking up orders from their local store or having the company deliver their groceries. Albertson's said it will charge a $9.95 service fee for delivery and $5.95 for in-store pick up. The company also operates stores under the brands Acme, Max Foods and Super Saver.